Is President Obama's Second Term in the Bag?
Fair's model is simple enough. According to the The New York Times, he has two econometric models -- one that predicts the overall state of the economy and one that forecasts the popular vote. Fair predicts that U.S. gross domestic product will grow 3.7% in the first three quarters of 2012 -- compared with the 3.2% forecast from Blue Chip Economic Indicators and 3.4% from the Congressional Budget Office.
Fair's latest calculation from earlier this month predicts that based on his forecast, Obama will get a bigger share of the electoral votes in 2012 than he did in 2008. Specifically, his model predicts that Obama will get 55.9% of the two-party vote share -- over two percentage points more than 2008's 53.7%. Moreover, Fair predicts that the 2012 Democratic share of the two-party House vote will rise from 45.9% in 2010 to 49.9% in 2012.
No Wonder the GOP Hates QE2
Of course, if Fair's GDP growth prediction is way too high, all bets are off. President Obama's reelection would be doomed if the economy stayed at its current 2% growth rate by 2012. Unfortunately, for Obama's political enemies, the Fed's $600 billion quantitative easing (QE2) plan puts in place a key part of the economic stimulus needed to add enough growth above the 3% rate needed to cinch Obama a second term.
Hoping Fair will be wrong? His most recent prediction was prescient. In November 2006, way before the 2008 candidates had been chosen or the campaign issues had been clearly formed, Fair used his model to predict the state of the economy in 2008. It correctly forecast a weak economy then and a Democratic landslide in the election.