This happens often. After I write about generational drivers or changes in the social mood, readers will contact me and ask: OK, so much for the drivers and the theory, Neil—what do you think will actually happen?
So let me try to pre-empt those readers. In my last post, I talked about how and why different generations lean toward or against the 2012 presidential candidates. In this post, I’ll talk about the connection between generations and some of the more conventional ways pundits currently handicap the election. I won’t exactly say who I think will win, but I will discuss some of the indicators I am following closely.
Futures Markets. Everyone knows that Republicans believe in futures markets (and in weird options and derivatives based thereon, like CDFs) more than anyone else. So here’s the bad news they have to swallow: Futures markets are now predicting Obama to beat Romney by roughly 16 percentage points. (This is not the predicted voter margin in the election; it is the probability margin by which of most investors think Obama will sneak by in at least a razor-thin victory.) That’s 57-40 percent on Intrade or 58-42 on Iowa Futures. Obama has been leading in these markets since last fall. Bless those markets. Because of the “law of one price” (look this one up under “arbitrage”), all of these futures market prices have to match, worldwide. Even brainy liberals (see Infotopia by Cass Sunstein, ) give very high praise to futures markets.
I agree that futures markets have a great track record and need to be taken seriously. Why do they lean more pro-Obama than the weekly polls? Maybe they sense that the sentiment for Romney is merely the way Americans vent their anger (always at the incumbent when talking to pollsters) before settling down and voting for the incumbent after all. Or maybe they sense that the strong preference of the rising generation for a cool and pragmatic Gen Xer as POTUS really does represent where the nation is heading—and that most voters will wake to that fact come November 6. Young Pompey once declared (to aging Sulla) that “more people worship the rising than the setting sun.” Maybe the markets agree.
Then again, markets no less than polls can be greatly mistaken this far away from the election. At the very least, I think that buying a Romney contract on Intrade at $4.00 and waiting to sell it once it hits $4.50 is an extremely safe trade—since sooner or later Romney is bound to have a surge carrying him at least this far. Even John McCain in 2008 surged in early September to 0.47 in the futures markets. It is also possible that the markets could gradually drift to a sizable Romney advantage between now and mid-October, and that after Romney wins everyone will congratulate the markets for being so prescient.
The Economy. According to the Pew Research Center, Romney leads Obama in his handling of one big issue, the economy, no matter how you phrase the question. And the economy—for example, the creation of jobs and the revival of wage growth—is now far more important to voters than any other issue (environment, gay marriage, immigration, foreign policy, what have you) by a very large margin. This is a big advantage for Romney. The unemployment rate is now 8.2 percent; looking at current indicators, it may not decline at all between now and November. No President since FDR has won an election with an unemployment rate over 7.2 percent. (That was the rate in November of 1984, when Reagan won re-election; and unlike Obama, Reagan brought the rate down from the date of his first election.) See The New York Times’ FiveThirtyEight column for a detailed update on the link between the economy and election outcomes.
The economy is as good an argument for Romney as the futures markets are for Obama. Still, it has potential weaknesses. Voters have yet to buy into Romney’s economic program—or even to understand it—in any big way. Is Romney going to cut deficits faster than Obama? Who knows? However he runs deficits, Romney says he wants to do it more through tax cuts than spending increases. Is John Q. Public OK with this? Also, keep in mind the “no President since FDR” proviso. If the public comes to equate George W. Bush with Hoover—and Obama with FDR—well then all bets are off. FDR won as an incumbent in 1936 with an unemployment rate of 16.9% and in 1940 with a rate of 14.6%.
I agree that if the economy worsens in the next couple of months, or if we simply learn more about how bad the economy now is (at least one eminent forecasting group thinks we’re already in a recession, it just hasn’t been called yet), the news will certainly give a further boost to Romney. But the link between each generation’s pocketbook and vote is seldom simple or direct. The Silent Generation has done the best economically in recent years and will never bear much of the burden of large deficits, yet the Silent are the most anti-Obama. For the Millennials, it’s the other way around. Liberals often complain that red-zone Americans would switch parties if they only understood their own economic self-interest. Conservatives say the same today about Americans under age 30. The problem is, most people don’t respond to piecemeal economic incentives. They either do, or do not, buy into a whole vision.
Likeability. How much do you like the candidate? How much would you like to have a beer with him? These are the sorts of warm-and-fuzzy questions that many political analysts believe turn the tide in an election. In most of the critical elections I can remember, GOP candidates have had the likeability advantage: Reagan over Carter; Bush Sr. over Dukakis; Bush Jr. over Kerry. But this election, it’s tipping the other way: The Democratic candidate in 2012 is currently much more likeable than the GOP candidate. It hardly matters what you ask—which candidate is more “friendly,” “connecting,” “honest,” “good,” “trying,” or “engaged,”—Obama comes out ahead, typically by double digits. Likeability could be a huge plus in an era of great anxiety when many voters will want to go with their “gut. It certainly worked for FDR.
Speaking of whom, there actually was a time when the least likeable candidate was, routinely, the Republican. And that was the 1930s and 1940s. Herbert Hoover and Alf Landon were less likable than FDR, and Tom Dewey was less likeable than just about anyone, including FDR and Harry Truman. So Democrats, yes, can be likeable. Are we reverting to the last Fourth Turning in party likeability? Or is there a simpler explanation? Perhaps Mitt Romney, whom nearly everyone who knows him would call him very “likeable,” has simply not yet had the chance to get his charm on in prime time. We’ll see.
Intangibles & Wildcards. I give most of the intangibles at this point to Romney. He is the challenger, and it is an old maxim (though some disagree) that challengers do better late in the campaign. A much larger share of his supporters say they are “enthusiastic” about this election—no doubt reflecting the higher relative energy of older voters this time around. He also remains relatively unknown, which means that millions of Americans will be taking a close look at him for the first time in the ten weeks between the GOP convention and the election. Since much of what is known about Romney thus far is negative (thanks to the attacks from his primary opponents and to the Obama campaign’s efforts to “predefine” him), it is likely that his strengths—for example, his intelligence, wit, and dedication to his family and the community—will get plenty of play. Romney may surprise voters during the debates by coming across smarter and warmer than most voters are expecting.
Another possible plus for Romney is the “reverse coattails effect.” Since the GOP are odds-on favorites to retain a majority in the House and gain a majority in the Senate, Romney could be pulled along by state and local candidates. That assumes of course that most voters prefer to vote a straight ticket and have a single-party government. It’s often said that Americans are happy with divided government, but according to one recent study a large (and possibly rising) majority say no, they really do want one party in charge.
Any intangibles for Obama? Confidence, maybe. Though Obama supporters are less enthusiastic, they are more likely to say they want to cast a positive vote for their candidate (as opposed to voting against the other guy) and are a lot more confident than Romney supporters that their candidate will win. Obama must hope that confidence doesn’t morph into complacency and that his supporters are still ready to sprint. Many pundits also say that Obama has an advantage in the electoral college by leading in the bigger states. That could make a difference, but only if the popular vote is extremely close.
As for wildcards—meaning sudden big surprises—these usually break for the incumbent Commander in Chief, unless voters associate them with mistakes made by the incumbent. An attack on Iran (by Israel and/or the United States, though the most likely date now mentioned in the media is October, after the election), would likely break favorably for Obama. Seismic financial news (like a crash triggered by an impending breakup of the Euro) may not break as well, since it may persuade many voters that the world needs better global economic leadership.
Obama and Romney. Let me conclude with a few thoughts on the two candidates themselves—and how they are, or are not, representative of their generation.
As readers of our books and this blog know, I consider Obama (born, 1961) to be a first-cohort member of Generation X (born 1961-81). The Gen-X dates we’ve explained and defended at length elsewhere (too many books to hyperlink!). But what about Obama? Does he fit the basic Xer picture? I’ve always thought so: Son of a new-age mom; child of a broken family; growing up disoriented amid incessant travel, change, and social experimentation; coming of age agoraphobic, feeling (as he puts it) “like an outsider”; and ultimately constructing his own persona (like Gatsby), a quality I see in many successful Xers. What’s more, Obama knows he’s not a Boomer: In his books (Dreams from My Father, The Audacity of Hope), he repeatedly mentions how he feels he came along “after” the Boomers and wants to put an end to much that Boomers have done wrong (culture wars, ideological polarization, and so on). Back in 2008, Obama often referred to this as a contrast between an earlier “Moses” generation and his own “Joshua” generation.
Obviously, opinions differ about who Obama “really” is. I think he is at heart a canny survivor, a masterful tactician, a pragmatist who doesn’t let emotions cloud his judgment. He knows when to play rope-a-dope (always let the GOP make the first budget move, then counter), or when to rouse his base by inveighing against Wall Street tycoons (even while hiring them to staff his Treasury), or when to ignore his own base and make a shrewd cost-benefit call (War on Terror by Predators, anyone?). On the Boomer cusp, Obama is certainly capable of crusading oratory—which adds to his versatility. Many of the most memorable crisis-era leaders in American history have been, like Obama, Nomad-Prophet hybrids: FDR, Abraham Lincoln, Sam Adams. Yet clearly Obama would need a very different and far more effective second term—and another opportunity handed to him by history—to enter these ranks.
As for Mitt Romney (born 1947), no one doubts he is a Boomer. He’s led a committed religious life; he’s always won accolades as a driven achiever; he’s made tons of money as a blue-chip yuppie; he believes in Values and Culture and Principles; and he tends to see America’s future in heavily moralistic terms (for example, in his recent book, No Apology: Believe in America, he juxtaposes his father’s “Greatest Generation” against his own “Worst Generation”—a dark figure of speech that Obama would never use). Will his religion be a problem? There is lots more talk about Mormonism as a Christian heresy among older than among younger Americans, that’s for certain. Many Millennials are impressed by the strong community ethic of Romney’s LDS Church.
One mystery about Romney, though, is the impression he gives to many of his fellow Boomers that he never shared their passionate coming-of-age experience, never broke from Mom and Dad, and never drank from the same deep well of authenticity and inner fire. We used to call this the “Dan Quayle problem.” Boomers have never been drawn to someone who seems to paint by the numbers. In the GOP primaries, when running against Gingrich and Santorum, Romney consistently did worse among Boomers than among other generations.
Yet in the general election, this weakness may rebound to his advantage. In the GOP primary, Mitt Romney consistently did better with young voters than any of the other candidates (with the occasional exception of Ron Paul). Millennials may actually like Romney’s cool and precise 7-point memo responses. (Romney, far more than McCain, will be able to debate Obama this fall on his own Ivy-League level.) Silent voters, similarly, may also prefer the buttoned-down Romney over the totally unplugged Boomer radical.
Yet at some point, for all of his advantages on paper, Romney will have to show some flame, some focus, and some real killer instinct. He will have to get ahead, stay ahead, and systematically thwart his opponent’s comebacks. In a national election, Romney has not yet demonstrated he has that endurance and resolve. Obama has.