National Investor Relations Institute on April 27 2012

1. The 2012 Elections & the Impact on the US Economy
Daniel Palazzolo
Professor of Political Science
University of Richmond
National Investor Relations Institute
April 26 2012

2. The 2012 Elections
-Why Romney?
*Lead in National Polls before IA Caucus
*Money Raised
*Endorsements
-Forecasting Models of the Presidential Election
Political Science Model
Historical Model
-Campaigns Matter: Four Campaign Questions
-VA the Battleground
Economic Effects

3. Gallup Poll of National Republicans: Eve of IA Caucuses
26%
30
22%
25
20
13% 11%
15
10
5
0
Romney Gingrich Paul Santorum
Source: http://www.gallup.com

4. Funds Raise by 4th Quarter of 2011
Santorum $2,178,703
Paul $25,901,703
Gingrich $25,901,305
Romney $56,465,509
0 20,000,000 40,000,000 60,000,000
Source: http:// opensecrets.org

5. Endorsements
82
90
80
64
70
60
50 Pre Iowa
40 As of Feb 9
30
14
20 9
3 3 0 2
10
0
Romney Gingrich Paul Santorum
Source: http://www.p2012.org/candidates/natendorse.html

6. Forecasting the 2012 Presidential Election
Political Science Models: 3 Key Factors
• State of the Economy
• Presidential Approval
• Incumbency

8. Unemployment Rate: March 2008-March 2012
(Bureau of Labor Statistics)
12
9.9 9.4
10 9.5 9.4 9.1
8.5
9.8 9.8 9.5 8.9
8 7.3 8.7 8.9
8.2
5.6
6
6.1
4 5.1
2
0
Jun-08
Jun-09
Jun-10
Jun-11
Mar-08
Sep-08
Dec-08
Mar-09
Sep-09
Dec-09
Mar-10
Sep-10
Dec-10
Mar-11
Sep-11
Dec-11
Mar-12

10. Approval of Incumbents Running for Re-election
(Gallup polls)
80
75
70
62
60 58
54 53
50 48
40 37
34
30
20
10
0
Ike 56 Nixon 68 Carter 80 Reagan Bush 92 Clinton Bush 04 Obama
84 96 12

11. Historical Model
Alan Lichtman: 13 Keys to the Presidency
Key 1: Incumbent Party Mandate (midterm election results): X
Key 2: No Serious Nomination Challenge: O
Key 3: Incumbent Running for Re-election: O
Key 4: Third Party Challenge: O
Key 5: Short-term Economy (Election Year): ?
Key 6: Long-term Economy (Growth better than previous terms: X
Key 7: Major Policy Change (e.g. health care reform): ?
Key 8: Social Unrest: O
Key 9: Scandal: O
Key 10: Foreign Policy or Military Failure: O
Key 11: Foreign Policy or Military Success: O
Key 12: Incumbent Charisma: X
Key 13: Challenger Charisma: O
If incumbent party loses 5 or less keys, it holds on to the White House.
(But no winner has ever lost the short term economy key.)

12. A very close race
Tracking Polls @
realclearpolitics.com
http://www.realclearpolitics.com/epolls/2012/president/us/general_election
_romney_vs_obama-1171.html

13. Campaigns Matter: Four Questions
(1) Where is the Party?
(2) What have you done?
(3) What will you do?
(4) Who are you?

14. Candidate Preference: GOP Voters (Pew: Feb 8-12)
45 42
40
35 34
30
30 28
25 23 Rep/Lean Rep
20 19 18 Tea Party
17
15 Not Tea Party
15 12 13 11
10
5
0
Santorum Romney Gingrich Paul

15. Candidate Preference: Conservative v.
Moderate/Liberal (Pew: Feb 8-12)
40
36
35 34
30
25
25
20
20 17 16
15 14
11
10
5
0 Conservative
Santorum Romney Gingrich Paul Moderate/Liberal

16. Support for Romney: Certainty Among Groups
(Pew Research Center April 4-18, 2012)
100 94 95
88 90 89
90 83 84
82 82
80 77
70 66 65
60
50
40
30
20 18 17
12 12
10 8 6
0
Support Romney Certain Support Not Certain

17. Presidential Vote by Party
(Pew April 4-15)
100
92 90
90
80
70
60
50 48
42
40
30
20
10 6 7
0
Democrat Republican Independent
Obama Romney

18. Romney Obama
Repeal Bush tax cuts incomes above
Taxes Maintain Bush tax rates $250K
Eliminate tax on
interest, dividends, and capital Buffett Rule: 30% minimum for $1
gains for AGI less $200K million
Reduce corporate income tax rate Eliminate Tax Breaks for Oil, Gas, and
from 35% to 25 percent Coal
Spending and Reduce spending from 24 to 18- 2.1 trillion in new gross revenues
Debt 20% GDP through 2022
Roll back domestic discretionary
spending to 2008 levels $360 billion in health care reductions
Medicare: Supports Paul Ryan’s $160 billion in other mandatory
premium support (55 under) reductions
Social security: means tests
benefits and raise the retire age $350 billion jobs package
Tax Reform: no specifics $370 billion in tax reductions
$270 billion new spending – mostly
Reversal of defense cuts education and infrastructure

19. Who Are You?
The GOP Successor/ Businessman The Likable Incumbent

20. Public Opinion of President Obama
(Pew Research Center, Jan 11-16, 2012)
90
80 78
75
71
70
61 61
60
52
50 44
40
30
20
10
0
Job Approval Strong leader Cares about Trustworthy Warm and Stands up to Good
People Like Friendly Beliefs Communicator
Me

22. Candidate Choice by Most Important Issue
(Pew April 4-15)
60 57
50 48 47 48 47
46
44
40 38
30
20
10
0
Economy Jobs Deficit Taxes
Obama Romney

23. Vote for Obama Net % Difference Key Groups:
2008-2012
(2008 exit poll v. Pew 2012 survey)
50
40
40 34 36
30 28
22
20
13 13
10 9 8
10 6
1
0
-10 -6 -6
2008 2012

24. Battleground States
• Link to http://www.270towin.com/
The tan colored states are off for grabs, but
the top 7 battlegrounds are:
CO, NV, IA, OH, NH, FLA, and VA. (WI, colored
blue, may emerge as a battleground)
Tracking Poll on the race in VA:
http://www.realclearpolitics.com/epolls/2012/p
resident/va/virginia_romney_vs_obama-
1774.html

25. Unemployment Rates in Key Battleground States
(March 2012: Bureau of Labor Statistics)
14
12
12
10 9
8.2 7.8
8 7.5
5.2 5.2 5.6
6
4
2
0

26. 2012 Congressional Elections
Current House: GOP 242 / Democrats 193
2012 Elections: Projections
Democrats Toss Ups Republican
172 49 214
Current Senate: Democrats 53 / Republican 47
2012 Elections: Projections
Democrats Toss Ups* Republicans
46 8 (5D/3R) 46
----------------------------------------------------------------------------------------------------
*FL (Nelson-D), ME (Open-R), MA (Brown-R), MO (McCaskill-D), MT (Tester-
D), NV (Heller-R), VA (Open-D), WI (Open-D)
Source: Real Clear Politics