Predict the 2012 electoral map (With under 3% GDP growth and 9% unemployment)

[Kurt_and_Hunter]

http://www.eschatonblog.com/2010/11/grim.html

In election years voters minds are made up on the broad economy by mid-year. (Any turn-around later than that will be largely invisible until after election day.)

The Philadelphia Fed's survey of forecasters predictions for mid-2012 are about 2.7% GDP growth and 9% unemployment. Maybe 2.8% and 8.9%... around there. (And what these forcasts are probably not factoring in fully is the malevolent idiocy of our new Republican overlords. I think they will find a way to make those figures even worse.)

These is not an aggregate of gloom-and-doom predictions from gold-bugs and perma-bears. This is the vanilla uncontroversial average of what professional forecasters expect. Could they be wrong? You bet. But in saying that, they are as likely to be wrong on the downside as on the upside. All of their mistakes the last few years have been overly rosy predictions.

If that is the economy of 2012 then I don't see any political hope.

Can we turn this around? Sure. Just pump a trillion+ borrowed dollars into the economy in the next year. But since Obama doesn't have that in his pocket, doing so would require congressional approval so we might as well pray for a rain of solid gold meteorites as for government action.

[DCKit]

1. All your golden meteorites are belonging to me. n/t

[Kurt_and_Hunter]

2. And they are good eatin'!

[ORDem]

3. The only way that trillion is going to get pumped in

is the way it has and is being done now, but pumping it into the top 2% of income earners, the bankers, the financial services industry (i.e. Goldman Sachs), and the wealthy who are their best customers. QE1 and QE2 are nothing more than trickle-down economics in a different disguise. The rich have really brainwashed the middle and lower economic classes big-time and that is not going to change until unemployment is well north of 10% and a lot more foreclosures happen.

[bemildred]

4. Nobody knows what things will be like in 2012.

People who pretend to are blowing smoke.

Edit: this has been a public service message.

[Kurt_and_Hunter]

5. So just believe whatever comes into ones' head?

Or believe nothing at all?

Of course nobody knows and forecasters do not say they know, they forecast. And they are often wrong.

But all government policy relies on projections. Everything relies on projections. Without some "best guess" expectation about the future there is no sensible way to do anything... ever.

How could any of us have any responsible opinion about social security, the budget, wars or education without sets of predictions about future states that are, of course, unknowable.

Do you believe the economy will be notably better than that in 2012? What is the basis for that belief?

[bemildred]

6. I favor rational skepticism and paying close attention to what actually happens.

You favor belief over observation? Or what?

FWIW, I think believing "nothing at all" works fine. Guesses are guesses, it is true that one needs to guess at times, that is what intelligence is, making decisions based on "incomplete information". But intelligence is also being clear about the fact that you are guessing, and paying close attention to what actually happens, and being willing to change at a moments notice.

[BzaDem]

7. Reagan won 49 states with the unemployment rate at 7.4%, because people perceived things were going

in the right direction.

Now obviously 7.4% is different than 9%. But that was an example where the direction mattered more than the absolute rate. Ironically, the current unemployment rate understates how bad things are, which means there is a lot of room for improvement (even if the official unemployment rate stays high due to people re-entering the labor force). Yes, it's improvement from a worse baseline, but it's still improvement for millions of people. 2012 will likely be decided on whether the slope of the employment curve matters more than its value.

Also, in some ways, I think the 2010 election is reason for some potential mild optimism. (Hopefully that's qualified enough.) I know that sounds crazy, but in 2010 there were really two different types of elections. The no-name house races, and the statewide Senate races. We actually did pretty well considering how bad the economy is when voters knew both candidates (the Senate races). Maybe this is just because my expectations were so low, but I think there are several data points that are a lot less bad than people make them out to be.

When Republicans fielded bad candidates, we won several races that we had no business winning. And even when they fielded candidates that pretended to be in the mainstream, we didn't do that badly considering we had 40% turnout (more white and older than normal) instead of the diverse Presidential 60% turnout. PPP just had a poll out today showing Obama 5-10 points ahead of all currently named Republican contenders -- in Virginia. That shows how much the turnout gap in 2010 mattered. 2010 run with a 2012 turnout would have been a very different election -- even though we have a horrible economy right now.

You are of course correct though that there is a lot of downside potential as well, and Obama could lose by a large margin. This is probably more likely than winning if the economy gets worse or remains as is. There's also the electoral college problem, where states that Obama is doing much worse than 2008 in happen to matter quite a bit.

I'm just saying that it isn't pre-ordained, even if we assume 9% unemployment. (Though I'm usually the pessimist around here, so I find it weird to be writing a post that might look crazily optimistic to many).