Economic Models Predict Winner in 2020 Election and it’s Landslide Victory
Same model predicted Trump win in 2016 when all polls pointed to Hillary Clinton
Economic models are predicting a landslide victory in the 2020 presidential election.
The same models that predicted Donald Trump soaring to victory in 2016, when all polls pointed to a Hillary Clinton win, are now all pointing to the same prediction for the next general election:
President Donald Trump will blow out the challengers in 2020 and win the election in a landslide.
To even the most casual observer, that's hardly a surprising prediction, however, as the Democrats have yet to muster a competent contender.
Former Vice President Joe Biden, socialist Bernie Sanders, or liberal sensation "Beto" O'Rourke might be at the top of the pile of Democratic hopefuls, but what chance do they really have of making it to the White House?
Trump's presidency continues to go from strength to strength during his historic first term, as he drives a soaring economy with record-low unemployment figures and rising wages, defeats ISIS in the Middle East, makes peace with North Korea and works to solve the national emergency at the border, all while brushing off the never ended attacks from Pelosi's Democrats.
According to multiple economic models with strong track records of picking presidential winners and losers, if the election were held today, Trump would likely ride to a second term in a huge landslide.
While Trump appears to be in a much stronger position than his competition, however, he also could wind up in trouble if the economy slows markedly between now and next fall.
According to Politico, other legal bombshells could also explode the current scenario.
Despite all these caveats, 2020 looks set for a Trump blow-out.
“The economy is just so damn strong right now and by all historic precedent the incumbent should run away with it,” said Donald Luskin, chief investment officer of TrendMacrolytics, a research firm whose model correctly predicted Trump’s 2016 win when most opinion polls did not.
“I just don’t see how the blue wall could resist all that.”
Models maintained by economists and market strategists like Luskin tend to ignore election polls and personal characteristics of candidates.
Instead, they begin with historical trends and then build in key economic data including growth rates, wages, unemployment, inflation, and gas prices to predict voting behavior and election outcomes.
Yale economist Ray Fair, who pioneered this kind of modeling, also shows Trump winning by a fair margin in 2020 based on the economy and the advantage of incumbency.
“Even if you have a mediocre but not great economy — and that’s more or less consensus for between now and the election — that has a Trump victory and by a not-trivial margin,” winning 54 percent of the popular vote to 46 for the Democrat, he said.
Fair’s model also predicted a Trump win in 2016 though it missed on Trump’s share of the popular vote.
Still, Luskin, Fair and other analysts who use economic data and voting history to make predictions also note that a sharp decline in growth and an increase in the unemployment rate by next fall could alter Trump’s fortunes.
“It would have to slow a lot to still be not pretty good,” Luskin said, adding that what really matters is the pace of change.
Even if overall numbers remain fairly strong, a sharp move in the wrong direction could alter voting behavior, but the change would need to be a dramatic one.
The American dream is back because President Trump understands what many experts don't: that restoring American greatness is bigger than any one government policy or program.— The White House (@WhiteHouse) March 21, 2019
Luskin’s current model — which looks at GDP growth, gas prices, inflation, disposable income, tax burden, and payrolls — has Trump winning by a blowout margin of 294 electoral votes.
The White House remains confident that the GOP tax cut will support growth of 3 percent both this year and next, keeping job and wage gains strong.
That’s much higher than consensus forecasts from the Federal Reserve and major banks that generally see a global slowdown led by Europe and China, coupled with the fading impact of U.S. tax cuts pushing U.S. growth closer to 2 percent this year with job gains slowing.
But Trump may have one major ally in his quest to make sure the numbers don’t go much lower than this: the Fed, which recently stopped its campaign of interest rate hikes.
And on Wednesday the central bank said it foresees no more rate hikes this year.
The moves followed months of Trump bashing the Fed for raising rates too much and stomping on his economy, though Chairman Jerome Powell has said repeatedly that politics plays no role in the bank’s decision.
Whatever the case, a much more gentle Fed could slide a floor beneath any decline in Trump’s economy and boost his reelection chances significantly.
Mark Zandi, the chief economist at Moody’s Analytics and a regular Trump critic, has been road-testing a dozen different economic models for the 2020 race.
At this point, Trump wins in all 12 — and quite comfortably in most of them.
The Moody’s models look at economic trends at the state level.
“If the election were held today, Trump would win according to the models and pretty handily,” Zandi said.
“In three or four of them, it would be pretty close.
"He’s got low gas prices, low unemployment and a lot of other political variables at his back.
"The only exception is his popularity, which matters a lot.
"If that falls off a cliff it would make a big difference.”
The Moody’s models look at economic trends at the state level and incorporate some political variables including a president's approval rating.
The Moody’s approach performed well in recent presidential elections but missed the 2016 result in part because it did not account for a potential drop in Democratic turnout in key swing states.
Zandi is trying to correct for that now before rolling out a new model sometime this summer.
3.1 GDP FOR THE YEAR, BEST NUMBER IN 14 YEARS!— Donald J. Trump (@realDonaldTrump) March 22, 2019
Trump has already upended many of the rules of presidential politics.
Trump this week pointed to a new CNN poll that showed more than seven in 10 Americans, or 71 percent, view the U.S. economy as “very good” or “somewhat good.”
That was higher than CNN has measured at any point since a CNN/USA Today/Gallup poll in Feb. 2001 found 80 percent thought the economy was that robust.
Prominent Democrats know that Trump remains confident in the face of the report from special counsel Robert Mueller, making a formidable opponent in 2020, especially if the economy remains close to where it is today.