By historical standards the economy is doing well enough for Geroge W. Bush to win re-election this November. Evidence from past elections shows that the pocketbook issue always dominates voting, even in wartime, and that voters are wary of changing horses in the middle of a stream. Hence, they are reluctant to risk economic conditions that are good on the chance that a new administration might do a little better. After all, they might do worse. So voters usually conclude that it’s better to stick with the devil they know than one they don’t.
For this reason, every political/economic forecaster who has looked at this question has concluded that Bush will win easily in November. Macroeconomic Advisers, a St. Louis consulting firm, predicts that Bush will get 61.9 percent of the two-party vote, Yale economist Ray Fair predicts that Bush will get 58.7 percent, and the giant economic forecasting firm Global Insight predicts 56 percent for Bush. Economy.com is predicting that Bush will get 54 percent of the vote and gain 373 electoral votes.
It’s important to note that none of these forecasters has any political orientation. They are simply looking at the data for the benefit of their clients. Moreover, there are no forecasters using similar methods currently predicting a victory for John Kerry. And it is highly unlikely that any will, barring an unprecedented economic collapse between now and Election Day. At present, every economic variable that the forecasting models use is expected to be positive for at least the next 3 months.
Of course, the models could be wrong, as they have been in the past. But in previous cases of error, the predicted margin of victory was very narrow, as was the case in 2000. This year, however, there is a very wide margin of victory estimated. Thus the models would not just have to be wrong; every one of them would have to be spectacularly wrong for Bush to lose.
Although most of Kerry’s support comes from people who always vote Democratic and those who simply hate Bush for various reasons, presumably there are some open-minded people who simply like what Kerry is proposing and think they would be better off if he were president. These people need to think carefully about the political situation Kerry will face if he is elected.
The most important fact to keep in mind is that Kerry will almost certainly have to deal with a House of Representatives that will be under Republican control. I know of no political forecaster on either side who thinks that the Democrats have any real hope of retaking the House.
Moreover, Republicans will probably hold the Senate as well. Although Democrats have a better chance there than in the House, they will have to get all the breaks to regain control. And if they do, their margin will be razor thin, with Republicans in a position to easily block any Kerry initiative with filibusters.
Therefore, Kerry is going to have a very difficult time getting traction on any proposal he may have that requires legislative action. We can also assume that Republicans will repay the Democrats for stalling their judicial nominees by making sure that all of Kerry’s wait a long, long time for confirmation.
Where Kerry may have a slightly stronger hand is in tax policy. That is because all of the Bush tax cuts expire in coming years. Consequently, Kerry could impose a fairly substantial tax increase simply by vetoing efforts to extend them or make them permanent. Although Kerry himself favors some of these tax cuts, a potential veto might give him leverage on other issues.
In short, we are likely to see a legislative stalemate should Kerry win, with neither side in a position to get much of anything done. Thus, those hoping for some new government benefit that Kerry has promised them are unlikely to see it even if he wins. Congress is going to be a sinkhole for just about every Kerry initiative except tax increases, which he can impose with just his veto pen.