The Democrats' Moody Blues

While the Democratic Party’s anxiety about the possibility of losing the 2020 Presidential Election seems like a reaction to its lackluster crop of candidates, their fear may have more to do with the environment that they will have to run in than any dissatisfaction with the batch of candidates vying for the party’s nomination.  The Democrats have a lot to worry about in 2020 but perhaps they fear most of all the possibility that the 2020 Presidential Election will focus on a phrase coined by Bill Clinton in 1992: “the economy, stupid.”

Moody’s Analytics recently released a set of models predicting the outcome of the 2020 Presidential Election based on economic data. Moody’s Analytics uses three different models to predict the outcome of presidential elections and three different turnout scenarios within those models.  The pocketbook model takes into account gasoline prices and nominal house price growth, the stock market model focuses on the performance of the S&P 500, and the unemployment model, not surprisingly, takes into account the unemployment rate. All three models factor in the percent change in real income per household into the equation as well as the President’s approval rating.

When it comes to past performance, the Moody’s models have correctly predicted the winner in every single one of the past several presidential elections. While the predicted number of electoral votes for the incumbent party only matched the actual number of electoral votes in one of the presidential elections since 1980, the models still have an almost spotless track record.  In 1980, all three models predicted that Jimmy Carter would lose in a landslide to Republican Ronald Reagan.  As it turns out, the models actually overestimated Carter’s performance.  In 1984, all three models predicted a blowout re-election for President Reagan.  Once again, Reagan’s actual electoral vote total came out slightly lower than the totals predicted by the models.  In 2008, the pocketbook model and the unemployment model predicted that the incumbent Party, the Republican Party, would receive 174 electoral votes.  Because the models did not take into account the possibility that Nebraska’s 2^nd Congressional District would end up supporting President Obama over John McCain, the models only missed the mark by one electoral vote.  In 2012, the pocketbook model and the unemployment model both hit the mark exactly by predicting that President Obama would win re-election with 332 electoral votes. 

As nearly every poll in the country predicted a win for Hillary Clinton in the 2016 Presidential Election, Moody’s Analytics predicted that based on the economic data, the incumbent party, the Democratic Party, would end up losing the election.  All the other polls got it wrong and Moody’s got it right. So now, Moody’s Analytics has released its models for 2020; based on the economy as it stood in September 2019. From a Republican’s perspective, these models rival Madison Gesiotto in terms of attractiveness and that’s saying a lot. Based on the fact that the economic data predicted a loss for the Democrats in 2016 and predicts a win for Republicans in 2020, it looks like the talking points about President Trump merely “inherited” a good economy from President Obama do not hold much water.  

Within the three models, three different turnout scenarios emerge.  The “minimum nonincumbent turnout” would amount to the best case scenario for Republicans, the “maximum nonincumbent turnout” would represent the best case scenario for Democrats, and the “average nonincumbent turnout” represents the most likely scenario. With the exception of the “maximum nonincumbent turnout” for all three models, most of the models predict a victory for President Trump in 2020; in some cases, a very big one.

In all three scenarios, the pocketbook model points to a Trump victory in 2020.  Even with “maximum nonincumbent turnout,” basically another way of saying “maximum Democratic turnout,” President Trump would still win with 279 electoral votes.  However, none of the models and Electoral College prognostications take into account the fact that two states, Maine and Nebraska, split their electoral votes based on the results in the states’ congressional districts. Maine’s 2^nd Congressional District looks more likely than not to support President Trump even if the state as a whole and the other, much more liberal Congressional District support the Democrat.  For a little perspective, President Trump won Maine’s 2^nd Congressional District with a higher margin of victory in 2016 than he did in the traditionally Republican state of Texas.  Similarly, Nebraska’s 2^nd Congressional District could end up voting for a Democrat even if the state as a whole votes for a Republican; as it almost certainly will.

In the event of average turnout, the pocketbook model predicts President Trump will win re-election with 351 electoral votes by winning every state he won in 2016, in addition to Minnesota, New Hampshire, Nevada, Colorado, Virginia, and Maine. If President Trump ended up winning Maine, he would likely still come up short in Maine’s 1^st Congressional District, which he lost by double digits in 2016. 

In the event of “minimum nonincumbent turnout,” the pocketbook model predicts that President Trump would win re-election with a blowout margin not seen by any incumbent President or presidential candidate in general in decades.  In addition to all of the states mentioned above in the “average turnout” scenario, states that he lost by double digits would come into play; including Connecticut, Delaware, New Jersey, and Oregon. This best case scenario would probably mean that President Trump had a real shot at winning all four of Maine’s electoral votes; including the one in the liberal Maine’s 1^st Congressional District.  While Mick Mulvaney’s vision of a 45-state landslide for President Trump will probably not bear out, the “minimum nonincumbent turnout” scenario for the pocketbook model will come pretty close.  Under this scenario, only nine states would vote for the Democratic presidential nominee.  

Because of the importance of coattails in American politics, the “pocketbook model” would certainly mean the end of Speaker Pelosi and an increased Republican majority in the Senate; especially in the event of “minimum nonincumbent turnout.”  Remember that every single state that voted Republican in 2016 supported a Republican Senate candidate and every single state that voted for Hillary Clinton voted to send a Democrat to the Senate. However, Republicans should not hold their breath about the “pocketbook model” becoming a reality.  An average of the 10 most recent presidential elections found that the “pocketbook model” misses the mark by an average of 23.8 electoral votes.

The Democrats have a silver lining in the stock market model; which shows Democrats winning 323 electoral votes to Republicans’ 215 in the event of “maximum nonincumbent turnout.” Even in this worst case scenario as highlighted by Moody’s Analytics, Republicans could still hold onto the Senate.  After all, this scenario shows Republicans winning the swing states of Arizona, Georgia, Iowa, Ohio, and Texas while losing the three rust belt states that catapulted President Trump to victory in 2016 as well as the perennial swing states of Florida and North Carolina. In such an event, Democrats could win the Senate seats in Colorado, Maine, and North Carolina but still fail to pick up the Senate because of Republicans winning the Senate race in Alabama. 

In the “average nonincumbent turnout” scenario of the stock market model, President Trump would secure a narrow victory in the Electoral College; winning 289 electoral votes to the Democrats’ 249. Under this scenario, the Electoral College would look exactly the same as it did in 2016, with one exception: Michigan would vote for the Democratic candidate instead of voting for President Trump. 

In the “minimum nonincumbent turnout” scenario of the stock market model, President Trump would enjoy a much stronger margin of victory in the Electoral College by winning 372 electoral votes.  Once again, Republicans should not hold their breath expecting this to bear out but such a strong showing for President Trump would definitely come as a nice surprise and would effectively amount to putting up the middle finger to #TheResistance that has worked so hard to derail the Trump administration. In this best case scenario under the stock market model, President Trump would win every state he won in 2016 as well as New Hampshire, Minnesota, Maine, Nevada, Colorado, Virginia, Connecticut, and New Jersey. 

In the unemployment model, “maximum nonincumbent turnout” would enable Democrats to achieve a narrow victory in the Electoral College by ensuring that the three states that carried President Trump over the finish line in 2016 would end up in the blue column in 2020. In the event of “average nonincumbent turnout,” the unemployment model predicts President Trump winning 332 electoral votes to the Democratic candidate’s 206; with New Hampshire, Minnesota, and Virginia joining the 30 states that voted for the President in 2016 in the red column. The best case scenario for the unemployment model, also known as “minimum nonincumbent turnout,” would look exactly the same as the “minimum nonincumbent turnout” scenario for the pocketbook model; which predicted an electoral vote total of 387 for President Trump and 151 for his Democratic opponent.

Moody’s Analytics averages out all of the data from the three models.  In the event of “maximum nonincumbent turnout,” the average of the three models predicts the Democratic candidate winning 279 electoral votes and President Trump winning 259.  In the event of “average nonincumbent turnout,” the average of the three models shows President Trump cruising to re-election with 332 electoral votes; the exact same number of electoral votes secured by President Obama in his 2012 re-election bid. If the best case scenario of “maximum nonincumbent turnout” comes to fruition, the average of the three models predicts President Trump will win 380 electoral votes. 

Based on the models unveiled by Moody’s Analytics last month, Democrats have a 1 in 4 chance of retaking the White House. In other words, it looks like in the absence of a captivating and charismsatic candidate like Barack Obama, the Democrats will lose the election as long as it remains a referendum on the economy.  That might explain the reasoning behind Bill Maher’s desire to see the economy go into a recession and the mainstream media’s obsession with banging the impeachment drum.  After all, from the media’s perspective, if the American people see President Trump as corrupt, they might decide to vote him out of office regardless of the strength of the economy.  To those who have not watched the news much over the past year, hosts of all platforms within the mainstream media, from nightly newscasts to cable news to late night “comedy shows,” have made it their mission to drive public opinion against the President. 

Obviously, the Moody’s models released at this time next year will matter a lot more than the ones released right now.  Based on the historical accuracy of Moody’s Analytics, if the economic data remains basically the same between now and then, the Democrats and the media could very well experience the same level of trauma they experienced on election night 2016; with Martha Raddatz bursting into tears and Lawrence O’Donnell remarking that “America is crying tonight.” On Election Night 2020, Democrats could very well end up experiencing some Moody Blues and if the economy stays strong, they will only win the election in their “wildest dreams.”