No one seems to be writing opinion pieces quite the way I would, so I decided to do it myself.

The name? Taverns are places where one goes to discuss the interesting events and things in the world, so this is my tavern.

I will offer my views on politics, economics, and whatever else strikes my fancy.
I will occasionally publish the entire article from another journal for purposes of causing discussion.

 

RDI predicts that Bush is losing

We are hearing that the improving stock market or the improving Gross Domestic Product, or the (recent) improvement in employment should result in Bush being reelected. The Gadflyer says those are not the models to look at. Look at RDI.

Rdi is Real Disposable (Personal) Income.

As the name suggests, RDI is basically a measure of how much money someone has to pay for things after taxes, inflation, and other things that suck up your paycheck before you get to spend it.

Think of it this way:


GDP gives you a broad picture of overall economic strength, but not necessarily how individual people are faring.


Employment numbers tell us how many jobs have been created but not whether they are well paying or have adequate (or any) benefits, or even how many hours people are working.


RDI shows us the money.

It should come as no surprise then that RDI is a good predictor of presidential elections. Remember all those heavily-ridiculed political science models that showed Al Gore would stomp George Bush in 2000? Virtually all of them used GDP, not RDI, along with other factors. But a model using RDI and overall presidential approval developed by political scientists Larry Bartels and John Zaller not only accurately predicted the nearly split vote, but also would have accurately forecast previous presidential elections.

So what does this have to do with Bush's sagging economic approval ratings? You guessed it: RDI has been trending downward this year. Data for April are not yet available, but those for February and March showed steady declines, despite strong job growth.

In fact, going back to January 2003 and using averages from Gallup, ABC/Washington Post, CBS/New York Times, NBC/Wall Street Journal, and Pew Research Center polls, Bush's economic approval ratings have moved in the same direction as RDI nine out of 14 times, or about twice as often.


posted by Richard at 10:22 AM