Will the Economy Re-elect Trump? Should It?

Conversely, while the stock market gains of the past few years have mainly accrued to the wealthy, they do not undermine the recent improvement in the wage and job picture for working-class Americans.

Lesson 2: The economy exerts a strong influence on electoral outcomes.

My economist friend was also right. The state of the economy profoundly affects voters.

One person who studies this issue is the Yale economist Ray Fair. He finds that a small number of economic variables, such as growth and inflation, and a small number of political variables, such as incumbency, are good predictors of election results.

According to Mr. Fair’s most recent forecast, made at the end of January, Mr. Trump will receive 54.4 percent of the two-party vote in November, which is likely enough for a victory in the Electoral College. Consistent with this forecast, in an average of recent polls, 55.7 percent of voters approved of Mr. Trump’s handling of the economy.

But a Trump victory is not inevitable. For one thing, the economy could still turn down, changing the prediction from Mr. Fair’s equation. That outcome is possible but unlikely.

Or Mr. Fair’s equation may miss this one. After all, it does not predict perfectly. Mr. Trump may be an outlier for election forecasting models, as he is in so many other ways.

Lesson 3: Assigning proper credit for economic conditions is hard.

Perhaps the greatest disagreement between my family member and my lunch companion is over why the economy is booming. Mr. Fair’s equation seems to suggest that most voters ascribe the economy’s ups and downs to the incumbent president. Most economists, however, are skeptical that a president can be judged so simply.

Are we now experiencing a Trump boom, or a continuation of the recovery that began under President Barack Obama? The right answer is a bit of both and a bit of neither.

Article source: https://www.nytimes.com/2020/02/28/business/will-economy-re-elect-trump.html