It’s the Economy, Stupid
If you look at the following headlines from just the last 24 hours:
- Most Economists in Survey Say Recession is Already Here, Wall Street Journal
- Southland Home Prices Tumble Fast, Los Angeles Times
- Betting the Bank, Paul Krugman op-ed in NYT
- Investors Flock to a Classic Refuge, Propelling Its Price Past $1000, New York Times
it’s hard to conclude that things aren’t going somewhat wobbly with our economy or, at the very least, very considerable efforts are being made to convince us that’s the case.
Ray Fair’s econometric model of quadrennial election results, based on just three variables, growth, inflation, and good news, provides empirical support for the 1992 Clinton campaign slogan, It’s the Economy, Stupid. Given the sagging economy or the perception of a sagging economy and barring some calamity it will be that much more difficult for a Republican candidate in November.
Note that I’m not making any observations here about the objective capability of either of the prospective Democrats to do anything about the economy, merely suggesting that we keep our eyes on the economy as an indicator and that, as I noted in my post on the economy this morning, perceptions matter.