Opinion: US elections – It’ll be the economy, stupid

Luke Sweeney 27 June 2012

It feels like the American election has been going on forever. Compared to British elections, which are over and done with in a fortnight, this has been a marathon – it’s been five months since the Iowa caucus and we’re just barely halfway to the general election.

By the time this is finished I’ll be ready to crawl into a hole and not come out until it’s time to obsess over the 2014 midterms.

Given an election season that’s already outstayed its welcome, what should you be expecting to happen over the summer?

Here’s a prediction: there will be a lot of news about the campaigns over the next few months – who’s up and who’s down, who’s just made a gaffe, how this speech or that announcement will play with a given demographic group. And almost none of it will actually have an effect on the outcome of the election.

One effect of an election season this long is that if it’s your job to cover political news, you have a lot of time to fill. You could talk about the effect Europe’s going to have on the election all day, but the media’s learnt that talking about whatever gaffe Mitt Romney’s made that day is both easy to do and gets viewers.

This isn’t a surprise – the path of least resistance is always attractive – but the daily ups and downs of the campaign shouldn’t be misconstrued as holding any useful information about what will actually happen in November.

If you’re watching the media coverage, you see commentary on each individual event as if it’s a big deal. From this, it’s easy to get the impression that the quality of the campaign determines the winner.

If Obama wins again, that’s because he’s run better adverts, made better speeches and generally made a better case than Romney. But the evidence suggests the daily grind of the campaign doesn’t really have that much of an effect.

A group of political scientists from UCLA created a model with just three variables: GDP growth, the President’s approval rating five months before the election, and whether one of the candidates is a sitting President. With just this information, the model managed to correctly predict 12 out of the last 16 elections.

So given that, what should you be looking at if you want to gain some insight into who’s going to win?

A good general rule is that if the economy’s growing and unemployment is falling, Obama will probably get a second term. If not, say hello to President Romney.

A good speech or a verbal flub won’t make any difference to this – but Ben Bernanke’s decision on whether to pursue monetary stimulus, the possibility of a collapse in the Eurozone, and whether bills that aim to create jobs can make it through the Senate are all much more important for determining confidence and growth between now and November. In short, it’s pretty much out of President Obama’s hands.

While none of these topics make easy cable news fodder, it’s much more important than what’s being said on the campaign trail. If you’re looking to predict a winner, look at growth rather than gaffes.

Luke Sweeney