With the GDP numbers out today we now have all the inputs needed to figure out who’s going to win the presidential election. At least, we have all the inputs needed to run the Fair Model, Yale economist Ray Fair’s GDP- and inflation-based formula for predicting whether the incumbent party holds onto the White House or not. Plug in real annual GDP growth of 1.1% in the first three quarters of the election year, average inflation (as measured by the GDP deflator, not CPI) of 2.9% over the first 15 quarters of the current presidential term, and four quarters of 3.2%+ GDP growth during the current term and you get …
… a 50.25% to 49.75% Obama popular-vote victory (the Fair Model has no truck with third-party candidates or the electoral college or any of that).
The one big issue I see with this forecast–other than that it’s reductivist reductionist economic nonsense, which for me is its whole appeal–is that this year’s GDP numbers are eventually going to be revised, and most people who know what they’re talking about seem to think they’ll be revised downward.