The economy has gone from President Donald Trump’s greatest political asset to perhaps his biggest weakness.
Unemployment is spiking at an unprecedented rate. Consumer spending is vanishing. And GDP is collapsing. History shows that dreadful economic trends like these spell doom for sitting presidents seeking reelection.
The coronavirus recession will cause Trump to suffer a “historic defeat” in November, a national election model released Wednesday by Oxford Economics predicted.The model, which uses unemployment, disposable income and inflation to forecast election results, predicts that Trump will lose in a landslide, capturing just 35% of the popular vote. That’s a sharp reversal from the model’s pre-crisis prediction that Trump would win about 55% of the vote. And it would be the worst performance for an incumbent in a century.
“It would take nothing short of an economic miracle for pocketbooks to favor Trump,” Oxford Economics wrote in the report, adding that the economy will be a “nearly insurmountable obstacle for Trump come November.”
The model has correctly predicted the popular vote in every election since 1948 other than 1968 and 1976 (although two candidates lost the popular vote but won the presidency in that span, including George W. Bush in 2000 and Donald Trump in 2016).
Ohio, Missouri could flip to Democrats
The national election model assumes that the economy is still in bad shape this fall, with unemployment above 13%, real per capita incomes down nearly 6% from a year ago and brief period of falling prices, or deflation.
“The economy would still be in a worse state than at the depth of the Great Depression,” the Oxford Economics report said.
A separate state-based election model run by Oxford Economics that incorporates local economic trends and gasoline prices predicts Trump will badly lose the electoral college by a margin of 328 to 210. That model forecasts that seven battleground states will flip to Democrats: Iowa, Wisconsin, Michigan, Pennsylvania, Ohio, Missouri and North Carolina.
“We would expect these states to experience significant economic contractions and traumatic job losses that would likely swing pocketbook vote,” the report said.
Oxford Economics developed the state-based model last year. It would have correctly predicted Trump’s upset electoral college victory as well as seven of the nine prior elections since 1980.
Is it too early to predict the election?
Still, models based on economic trends are not political crystal balls. And they have no track record of predicting elections during pandemics.
“Traditional models work in normal times. But we’re not in normal times right now,” said Greg Valliere, chief US policy strategist at AGF Investments.
The election is still six months away. And the past six months show how much the world can change in that period of time. No one was predicting a 20% unemployment or a 40% collapse in GDP six months ago. Now, those are the consensus projections.
