Will President Obama be Reelected?

A year from now Americans (well, a little over 50% of Americans) will decide who will be our next President for the next four years. The big question, of course, is whether President Obama will be reelected or will the Republican nominee take over the reigns. Little has changed in the last month ("How Good Are We At Predicting the Future?"), so I'll repeat what I wrote then:

If the economy doesn't pick up between now and next summer, Republicans will control the House, Senate, and Mitt Romney will be sitting in the Oval Office come January 2013.

The difficulty, of course, is trying to figure out what is going to happen to the economy over the next year. As the stock market's volatility indicates, people aren't quite sure although yesterday's news in terms of new jobs and unemployment suggests that the likelihood of "double-dip" recession is receding.  Still, unemployment remains high and the economy is expanding at a very slow rate, all of which is not good news for President Obama (charts from Google Public Data Explorer).

Nevertheless, my sense is that if the economy (i.e., GDP) grows at 2.0% rate per quarter (or better) and unemployment drops below 9.0%, then his chances of being reelected are better than 50%. If it doesn't grow that fast and unemployment remains above 9.0%, then there's a very good chance that Mitt Romney will be our next President. Either way, it's going to be close.

An obvious objection is that American voters are concerned with more than the state of the economy. That is, they take other factors into account, such as a candidate's position on affirmative action, same-sex marriage, abortion, the war in Afghanistan, and so on. And that is, of course, correct.  And when predicting for whom individual voters will vote, these issues are more salient than the economy.  However, when it comes to predicting how American voters will vote in the aggregate, then it is an entirely different matter. In that case, the state of the economy explains almost everything.

Why? Because the economy is the primary factor for swing voters, and their votes are the ones that are most subject to change between now and November 6, 2012, while the votes of died-in-the-wool Republicans and Democrats are not. In other words, most Americans who are pro-choice and support same-sex marriage are not going to vote for the Republican candidate even if the economy goes into the tank. And most Americans who are pro-life and oppose same-sex marriage are not going to vote for President Obama even if the economy takes off. However, for those Americans for whom such issues are less important or don't toe a particular ideological line (e.g., they are pro-life but support same-sex marriage, or they are pro-choice but oppose same-sex marriage), then the economy typically becomes THE most important issue. And that's why the fate of President Obama and Mitt Romney hinge on how the economy performs over the next twelve months.