Conventional wisdom tells us that no sitting president is ever re-elected when the unemployment rate tops seven percent and people have less disposable income. Others wonder if President Barack Obama should have taken on housing reform before tackling healthcare because home ownership and the value of the residence is perceived by Americans as a measure of personal wealth.
In the opinion of Douglas Hibbs, a retired economics professor who taught at the University of Gothernburg in Sweden, “The best predictions of 2012 election results, as of earlier elections, will almost surely be delivered by price data at thick-market betting sites like Intrade because they indicate the level of disposable income.
Writing in The New Yorker, Samantha Henig says that “The Republican field may be full of Eccentrics and Implausibles, but President Obama does have a formidable foe in the economy, Elaine Kamarck, a lecturer at Harvard’s Kennedy School of Government, says. The President also has to contend with Americans’ newfound belief, stemmed from the economic disaster in Greece, that ‘deficits are the roots of all economic evils.’”
Alan Abramowitz’s “Time for Change” model tries to achieve this task. Using 2nd quarter GDP growth in the election year, presidential approval in the election year, and a dummy variable (one or zero) for whether the party in the White House has completed one or more terms, he finds that the term variable is very important. President Obama is expected to win 4.4 percent more of the popular vote than he would if his party were in its second term in the White House for a projected percentage between 53 – 54 percent.
The fact that President Obama raised a record-breaking $86 million for his re-election campaign from April to June, exceeding a $60 million quarterly target and effortlessly surpassing all Republican challengers, lends credibility to Hibbs’ and Intrade’s prognostications. Small donations drove that enormous cash collection in the 2nd quarter; 98 percent of those donations totaled $250 or less. The average donation was approximately $69, according to campaign manager Jim Messina. Obama’s campaign received donations from more than 552,000 individuals and noted that it had “more grass-roots support at this point in the process than any campaign in political history.” According to Chris Arterton, a political management professor at George Washington University, “They have smashed all records. I think it is quite dramatic.”
The President’s successful fundraising likely surpassed that of all his declared opponents. Combining the known fundraising totals, Republican candidates brought in $35.5 million. Former Massachusetts Governor Mitt Romney raised a paltry $18 million in the quarter. “We did this from the bottom up,” Messina said. “We didn’t accept one single dollar from Washington lobbyists or special-interest PACs.”
The ability to raise campaign cash, a key indicator of the success of any presidential candidate, is more important in the 2012 presidential election, which is expected to be the most expensive in history. Quarterly fundraising statistics are a closely watched barometer of early-stage presidential races because they offer clues to a candidate’s long-term viability, organizational expertise and the enthusiasm among supporters. The enormous intake of campaign cash for the president comes as the importance of having an effective fundraising operation is greater than ever, in part because of the 2010 Supreme Court Citizens United decision that lets corporations and unions exercise free speech rights by spending unlimited amounts on campaign ads. President Obama, who filled his 2008 campaign coffers with millions in small donations, is now armed with the power of incumbency, and is likely get sizeable donations from corporate and establishment donors.
“Your early support means we can make more investments now, giving our organizers more time to build relationships on the ground, reach more people and recruit more volunteers,” Messina said. “The most important thing isn’t the dollar total, but the number of people who pitched in to own a piece of this campaign.”