We ran out of time and Prof. Larry Sabato didn't get to finish explaining his Crystal Ball (out today).

Here it is for you reading pleasure.

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http://www.centerforpolitics.org/crystalball

WHY BARACK OBAMA HAS A GOOD CHANCE OF WINNING A SECOND TERM

And why Nate Silver may have underestimated his chance

By Alan I. Abramowitz

Senior Columnist

According to the Time-for-Change forecasting model, which has correctly predicted the winner of the popular vote in every presidential election since 1988, Barack Obama has a good chance of winning a second term in the White House next November. The main reason for this is that the Democratic Party has only held the White House since 2008. That makes Obama a first-term incumbent, and first-term incumbents rarely lose.

The Time-for-Change model is based on three predictors: the growth rate of the economy in the second quarter of the election year (Q2GDP), the president’s net approval rating in late June or early July of the election year (JUNEAPP) and the time-for-change factor (CHANGE), which takes on the value of zero if the president’s party has been in office for one term and one if the president’s party has been in office for two or more terms. The model predicts the incumbent party’s share of the major party vote (PV).

Each of the three predictors is assigned a weight based on a regression analysis of the 16 presidential elections since World War II and the results are as follows:

PV = 51.7 + (.11*JUNEAPP) + (.54*Q2GDP) – (4.4*CHANGE).

The three predictors are highly statistically significant and the model explains 89% of the variation in the incumbent party’s share of the major party vote. The weight assigned to the CHANGE factor in the model indicates that after controlling for both the growth rate of the economy and the incumbent president’s approval rating, a first-term incumbent like Barack Obama can expect to receive an additional 4.4% of the major party vote compared with a candidate seeking to extend his party’s hold on the White House beyond eight years. That explains why first-term incumbents rarely lose. In the past century only one first-term incumbent has been defeated — Jimmy Carter in 1980. (Remember, George H.W. Bush lost after one term too, but he took over for Ronald Reagan, who had served two previous terms. Had Bush been reelected, the Republicans would have held the White House for 16 straight years.)

Could Barack Obama be the next Jimmy Carter? There is clearly a chance that he could, if the condition of the U.S. economy deteriorates in 2012 and/or the president’s approval rating slips further into negative territory. But because of the first-term incumbent advantage, the model gives Obama a good chance of winning a second term even with fairly modest economic growth next year and an approval rating in the low- to mid-forties, as the following table shows. The table presents conditional forecasts of the Democratic share of the major party vote in 2012 depending on the growth rate of the economy in the second quarter and Barack Obama’s net approval rating at mid-year.

Chart 1: Conditional forecasts of Obama’s share of major party vote

Source: Time-for-Change model and data compiled by author.

Based on the president’s average net approval rating in recent national polls, between -10% and -5%, and the estimated growth rate of the U.S. economy during the second quarter of 2011, 2.5%, Obama would be expected to win approximately 52% of the national popular vote, enough to almost certainly guarantee him a majority in the Electoral College. But the president clearly has little margin for error. A double-dip recession and/or a substantial decline in his approval rating could easily put him below 50%.

A note on Nate Silver’s Model

In an article in the Nov. 6, 2011 Sunday New York Times Magazine, election guru and pundit Nate Silver of FiveThirtyEight.com argues, based on a statistical model of U.S. presidential elections, that Barack Obama faces a very difficult battle for a reelection if his opponent is Mitt Romney and if economic growth does not improve markedly in 2012. Silver’s model includes three predictors — the president’s approval rating one year before the election, the growth rate of GDP in the year of the election and the ideological extremism of the opposing party’s nominee based on a rating scale developed by the political scientist Marty Cohen and his colleagues in their 2008 book on the presidential nominating process.

Based on these three factors, Silver presents some estimates of Barack Obama’s chances of winning a second term depending on his current approval rating, the growth rate of the economy next year, and whether the Republican Party nominates Mitt Romney or a more conservative candidate. Obama does not fare well against Romney under most plausible economic growth scenarios but does somewhat better against other possible GOP candidates such as Herman Cain or Rick Perry.

But there are several problems with Silver’s model. First, it isn’t really a forecasting model because the growth rate of the economy during the year of the election won’t be known until long after the election is over. In addition, the measure of the opposition candidate’s extremism is highly subjective. Many of these candidates in past elections did not have a voting record so the opinions of presidential historians were used to measure their extremism, but obviously different historians can reach different conclusions about a candidate’s extremism. This raises the possibility that the ratings for past elections could have been influenced by the results of those elections or that Silver’s own ratings of the 2012 GOP candidates could have been influenced by poll results showing Romney doing better than Cain or Perry against Obama. Moreover, it’s not even clear that this variable works. Although it has a significant effect in Silver’s own model, when it is added to the Time-for-Change model it is not statistically significant and the explanatory power of the model increases by less than one percentage point.

More importantly, Silver’s model may underestimate Barack Obama’s chances of winning a second term in the White House because it does not take into account the advantage enjoyed by first-term incumbents. And that advantage, as we have seen, is quite substantial.

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Obama’s Destiny: Does It Lie in Demographics, or in the Political Environment?

Glen Bolger, Guest Columnist

November 10th, 2011

Call it the clash of irresistible force of demography/geography versus the immovable object of the political environment. This is the conundrum facing political analysts in looking at President Obama’s chances in the presidential election next year.

Some people are debating whether or not this is a referendum or a choice. Presidential reelection efforts are always referendums. Wizened veterans of American elections will remember the disdain Jimmy Carter’s team had for Ronald Reagan, who they viewed as a grade B actor with simplistic views. The same holds true for the George H.W. Bush team’s view of Bill Clinton, who they viewed as a governor with a big, successful libido from a small, failed state. Neither incumbent could escape the gravitational pull of an incredibly bad political environment. It’s always about the incumbent.

This incumbent has several strengths going for him, as well as several weaknesses that must scare the heck out of 1600 Pennsylvania Ave.

Obama’s strengths

Demographics: Obama is starting out with a 19%-5% lead. That puts a lot of pressure on the Republican nominee to get it perfect with the remaining 76% of the electorate. Where’s that 14 point lead come from? African Americans and Hispanics.

This talk of Obama not being able to count on African Americans is pure “horse hockey,” in the words of Col. Sherman T. Potter. African Americans voters will turn out, and they will vote for Obama at the same rate as in 2008 — which puts him up 12.4% to 0.6% over the Republican.

And that’s why Hispanics are the key. They were 8% of the electorate in 2008, and 66% voted for Obama. Let’s increase that number to 11%, and, in light of his slightly weakened condition with them, say he wins 60% this time — a 6.6% to 4.4% win.

John McCain won whites 55%-43% — a convincing 12-point victory while on his way to a 46%-53% loss overall. In 2000, George W. Bush beat Al Gore by 12 points among whites, on his way to a tie. It is clear that as the country has changed demographically, the percentage of the white vote that a Republican needs to win has increased.

Money: Maybe money can’t buy you love, but it can buy a dizzying amount of TV and organization. Let’s say the pundits are wrong and Obama does not raise $1 billion. Let’s say he only raises 90% of that goal — that’s still $900 million, and that’s going to allow him to saturate the airwaves with negative ads.

And negative ads are what Obama is going to have to buy. With polls showing him running in mid-40s against the leading Republican candidates, Obama is going to have to disqualify the challenger by mercilessly attacking. Undecided voters don’t know the Republicans, so that means they’ve decided they do not want to vote for Obama (whom they already know), and are likely to vote GOP unless given reasons not to. And that’s what the Obama team will be doing.

The map: There are nine states Bush won in 2004 that went for Obama in 2008. Those states (from East to West: Virginia, North Carolina, Florida, Ohio, Indiana, Iowa, Colorado, New Mexico and Nevada) equal 112 electoral votes. The states that went for Kerry in ‘04 and Obama in ‘08 total 246 electoral votes, while the Bush/McCain states add up to 180 electoral votes.

That gives Republicans a narrow margin for error — having to win Ohio, Florida, Indiana, either North Carolina or Virginia, and at least three out of the remaining four. If Obama carries the Kerry states, as well as another 24 electoral votes, he wins.

Given the economy and Obama’s problems with white voters (see below), it’s certainly possible that Kerry states such as Pennsylvania, Michigan, Wisconsin and New Hampshire become GOP target states. But, overall, Obama’s map is easier to put together at this point in time.

Obama’s weaknesses

The economy: I know what you are thinking. No kidding, Glen. But, the economy is actually more problematic for Obama than people realize. The narrative from the Obama campaign is that he’s Ronald Reagan (politically) — a tough first two years, followed by a smashing reelection victory as the economy improves.

Well, the reality is not matching. Looking at the Michigan Consumer Sentiment Index (MCSI) for the 24 months prior to a president’s re-elect, consumer confidence at this point in 1983 for Ronald Reagan was 91.1. For Jimmy Carter, it was 63.3. At 60.9, Obama is worse off than Carter. Or Bush 41 (69.1). And, he’s certainly no Clinton (MCSI was 88.2 in 1995). Certainly consumer confidence can change in a year, but going back to 1956, the average consumer confidence rating for a reelected president is 95.9, while it is 78.4 among those who lost. And Obama can’t even see that 78.4 from where he is right now.

The political environment: The mood of the country is much closer to what it was in 1980 than in 1984. To 1992 than in 1996. To 2008 than 2004. Only 18% of voters say the country is going in the right direction, while 74% say things are off on the wrong track. Since this question was popularized in the 1970s by the great polling pioneer, Richard Wirthlin, there has been no single question that better reflects the public’s mood. And 74% wrong track means anger, not hope. It does mean change, but not the kind Obama talked about in 2008.

White voters: In 2008, Obama received 43% of the white vote. Let’s go back to having some fun with math. Earlier in this piece, I gave Obama 95% of the African American vote, 60% of a larger Hispanic electorate, and found him leading 19%-5%. Let’s give him the 63% he got in 2008 among the combined Asians/Others in the exit polls, extending his lead to 22.1%-6.9%.

This leaves 71% of the electorate as white voters. To get to 50%+1 (no guarantee that’s the right number given the potential for third party candidates, but we need to pick a number), Obama needs just 39.5% of the white vote. Given that he got 43% last time, it should not be difficult for him to get to 39.5% and win a very close popular vote.

Except right now, Obama’s approval rating is about 35% among whites. That gets him to just 47% of the vote — with best-case scenarios for Obama among minority voters already built-in. A lot can change in a year, but right now, Obama’s traumas among white voters spell trouble for him.

Slumping with key groups: Obama won large victories among 18-29 year olds (66% of the vote), Hispanics (66%), and women (56%). He won a key victory with Independents (52%) and got 46% of the vote among white women.

Underscoring the importance of the youth vote to Obama is that he and McCain essentially tied among voters ages 30+. So Obama’s landslide in the popular vote was due solely to 18-29 year olds.

His approval rating is significantly lower with each group now — 47% with 18-29 year olds, 54% with Hispanics, 49% with women, 35% with Independents and 38% with white women. Those numbers are all in the danger zone for him and suggest that it will be very difficult for him to recapture the glory of 2008.

Conclusion

Given the demographics and the map, it is very unlikely for Obama to lose big. However, given the economy and the political environment, it is increasingly unlikely for Obama to win big. The 2012 election is shaping up to be a very close contest — one in which demographics and the political environment collide.

Glen Bolger is a partner and co-founder of the political and public affairs polling firm Public Opinion Strategies.

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