Election Update (One Last Time)

With just under a week to go, it seems fitting to offer (one last time) predictions for the upcoming Presidential and Congressional elections. This, of course, isn't the first time I've done so. In fact, I've explored the 2012 election at least five times in the past year, and the links to these earlier posts appear below:

1. The Democrats Might Retain the Senate After All - September 30, 2012
2. Election Update (One More Time) - September 2, 2012
3. Election Update - June 16, 2012
4. Election (Not Weekend) Update - March 6, 2012
5. Will President Obama Be Reelected? - November 5, 2011

To briefly recap the content of those posts, last November I wrote that if the economy didn't improve, the Republicans could take control of both the White House and Congress. As I noted in March, however, the economy had picked up (not much, but probably enough), and thus it was highly likely that President Obama would be reelected. My opinion on this has not changed. Obama will almost certainly be reelected (although there's an outside possibility he could lose the popular vote but win the majority of electoral college votes). It will be close. Obama may only get 51% of the vote. Nevertheless, he still should win unless he does something really stupid between now and next Tuesday.

What is perhaps more interesting is whether the Democrats will retain control of the Senate. For most of this year, I've argued that they wouldn't, but the tide began to change when Maine's Republican Senator, Olympia Snow, chose not to run, and Missouri's Republican nominee for the Senate, Todd Akin, remarked that some forms of rape were legitimate ("What did Rep. Akin mean by ‘legitimate rape’?") and then refused to drop out of the race when it became clear that he had become a liability. Now, it appears that the Democrats have a genuine chance at holding on to the Senate, a scenario that many people didn't believe possible just a year ago.

P.S. While I rely heavily on prediction markets for making my own predictions, the first place I look is the Dow Jones Industrial Average. I've developed a working "theory," which I have yet to establish empirically, that if the Dow crosses a certain psychological threshold, a President will be reelected. In this election year, I believe that threshold is 13,000. That it will probably be above 13,000 when people on election day (but not by much) is one of the reasons that I think President Obama will win (but not by much).