If it’s the economy, then Senator Barack Obama will win Tuesday’s presidential election, according to IHS Global Insight, a Waltham economic forecasting firm.
The firm's election equation, which has correctly forecast the popular vote winner in 13 of the past 15 presidential elections, predicts Democrat Obama will take 53.1 percent of the vote to 46.9 percent for Republican John McCain. IHS Global Insight analyzes pocketbook issues to predict the outcome of presidential elections. The equation’s only misses came in the close elections of 1968 and 1976. (The firm considers its forecast of an Al Gore victory in 2000 as correct since Gore won the popular vote, but lost the Electoral College).
Two of three key drivers of the equation are going against McCain, according to the firm. First, per capita disposable income, adjusted for inflation, has declined over the past year. Weak or negative income growth hurts the incumbent party. Inflation-adjusted income has declined in the year before the election only one other time, in 1980, when incumbent Jimmy Carter was beaten handily by Ronald Reagan.
The other key component hurting McCain is the “fatigue factor,” according to IHS Global Insight. If the same party holds the White House for two or more terms, voters are more likely to seek change. Republicans have held the White House for two terms. The equation’s third key driver, whether an incumbent president is seeking re-election, doesn’t come into play this year, since President Bush isn’t running.