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Economist: Declining incomes signals Romney presidency

Friday, October 26, 2012 - 04:08

Oct 26 - Economist Douglas Hibbs' ''Bread and Peace'' economic model, which focuses on Americans' personal incomes, suggests Mitt Romney will win the presidency in a landslide election.

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The US economy grew at a faster pace than most economists expected. Now let -- better news from President Obama but according to economist -- with kids. It's stagnant in comes that are the biggest problem facing the president's reelection prospects. He joins us now by -- of guys. So drug use and what are the two most important factors for presidential election. Is it your bread and peace model it is per capita disposable personal income. Tell us where does that number come from and what is the latest GDP report tell us about that number. Welcome again whether it's the growth rate -- per capita disposable personal incomes. Adjusted. By the by the Consumer Price Index in my case. And it's a growth rate over the entire term although this quarter's. Result has the biggest late now for example has four times the weight. Of the growth rate in the present in the administration's first full quarter which is second quarter of 2009. In the -- election cycle -- Where's the government comes -- nationally command -- accounts. Disposal personally come ms. all income going to persons and households. Including transfer payments. Less tax payments. And and of course as I said before adjusted for in my case by -- by the Consumer Price Index. It was not a good numbers this quarter I don't know what people were expecting that in fact the growth -- was. Minus half a percentage point on an annualized basis. Deflated as I do by the Consumer Price Index. And if you look in the release of the Bureau of Economic Analysis you'll see that clear growth rate. They used to cynical that the personal consumption deflator I don't think we wanna give into the two into the minutia of oppressive place. Just later series -- very important topic I -- But in any -- their growth rate -- zero. Right so let's just jump in here -- sort of broaden it out a little bit and and put some historical context and the numbers. We're gonna actually put up a chart that shows when the economy is strong incumbent party stands pretty strong chance of holding on the White House. An honest chart in 1964. Lyndon Johnson running for reelection personal income growth. Is growing at more than 4% he won in a landslide. At the bottom of the chart. Jimmy Carter's running for reelection against Ronald Reagan in 1980 personal income -- actually negative that didn't work out so well for him so. Based on some of those historic data DC Mitt Romney in the White House. I do. I do I think now look Obama's prospects are really quite -- my. Precise estimate -- in this is by the way this is statistics mean there're there there there there are random fluctuations. Due to idiosyncratic forces. Which in a particular election could actually dominate table not the selection that we didn't know about the experience and generally they do not. About. In that -- messiah -- are put obamas don't -- now between 46 to 47% lower than I have earlier. Because the advance estimate -- of the third quarter of this year isn't really a third foreign number. It's it's it's a negative growth rate -- half percentage point on an annualized basis from quarter to quarter. It's so hard of course to figure this stat stuff out they look at polls you almost daily but. Is it possible it guest house sizeable loss President Obama might happen. Aren't -- -- lose but it and I wanna I wanna I wanna calculate the loss if you mean the difference between the difference and -- where you go. In the popular grow between that you him it's. Right now without. Seven maybe eight percentage points and also squeezing like 54 hour news there's 53 and a half four to six and a half somebody right now. Well you gave us a lot of information as good discussing the model with you thanks so much economists that with kids appreciate it. I'm rob the shop there this is Reuters.

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Economist: Declining incomes signals Romney presidency

Friday, October 26, 2012 - 04:08