by New Deal democrat
The 2016 election economy: the “Bread and Peace” model final forecast
One of the election forecasts I have referred to frequently for the last year is the “Bread and Peace” model by Professor Douglas Hibbs. Hibbs himself has not published any forecasts for this election, but the result forecast by his model has been updated from time to time by the site “Pollyvote,” which describes his model thusly:
The Bread and Peace model, developed by Douglas Hibbs, predicts the two-party popular vote based on just two fundamental variables that systematically affected post-war aggregate votes for president:
- Weighted-average growth of per capita real disposable personal income over the term, and
- Cumulative US military fatalities due to unprovoked, hostile deployments of American armed forces in foreign wars.
As of one week ago, the site forecast:
The 2016 Bread and Peace model predicts a victory for Hillary Clinton with 53.9% of the major party vote (compared to 46.1% for Donald Trump).
On Monday September personal income was reported, rising +0.3%. The inflation measure rose +0.1%. But real *disposable* income for the month actually declined, so here is what real disposable personal income per capita looks like through Q3, the last measure before the election:
The deceleration in growth of real disposable personal income is evident when we look at this data YoY:
Through August, Q3 real disposable income averaged an increase of +0.2% from Q2. With September’s report, that declines to less than +0.1%.
Thus the Bread and Peace model’s final reading for Hillary Clinton is less than 53.9%, although above 50%.
Since August 1, poll aggregations have floated around +4% for Clinton, +/-3% depending on which candidate for whom the most recent news was awful. If the voting public concludes on average that they are about equally distasteful, then a result closer to that forecast by economic fundamentals becomes more likely.