Hillary Clinton will win in November, says the economy

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Hillary Clinton will win in November, says the economy

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Hillary Clinton will win in November, says the economy

Now we’re all atwitter about a poll or two showing Donald Trump ahead of Hillary Clinton in the race for the White House this fall. 

But let’s twist slightly what Warren Buffett says about stock markets: In the short run, they’re voting mechanisms (like polls) that get things wrong all the time. In the long run, they’re weighing mechanisms that are just about always right.

In politics, “weighing” means looking at the economic fundamentals. And at least at Moody’s Analytics, the nation’s biggest economic-consulting firm, the economic fundamentals still point solidly to a Democratic win.

The silent majority will be people who are broadly satisfied. Or so the model says. A 10% after-inflation pay raise will do that.

Moody’s economy-based election model predicted every state outcome correctly in both 2008 and 2012. It shows Clinton winning 332 electoral votes, well north of the 270 needed to claim victory. In fact, every state should go the same way it did last time, because home prices are appreciating, gasoline is cheap, incomes are rising and voters already approve of the job President Obama’s doing, even before he and Clinton get down to re-selling it in earnest this summer.

“There are only two things that could change the model between now and November: the approval rating and gas prices,” Moody’s economist Dan White said.

By now, anyone can tick off the stats that point to voters choosing more of the same: Unemployment has been cut in half to 5%, and will be at a full-employment-ish 4.7% or 4.8% by fall if recent rates of improvement hold. Wages are actually kind of beginning to surge: Counting both wage gains and increases in hours, pay is up 4.7% in the past year, according to Regions Financial, and hourly pay for people who have been in their jobs at least a year is up 3.4%. And the price of gas is down from $3.75 a gallon to $2.40 in the past two years, saving households about $900 a year each.

Finally, all the good news is no longer confined to the top economic strata, like early in the recovery: Median household income adjusted for inflation will hit its Internet-level peaks by summer. Sentier Research’s influential index of 50th-percentile household income, which uses January 2000 as its base value of 100, is at 99.9, up 10.3% from August 2011. It’s higher than at any point since early 2002 — an all-time high it could reach before the election.

In that environment, it won’t be hard to find noisy Trump supporters, some of whom once worked at factories whose owners moved operations to Mexico or China.

But the silent majority will be people who are broadly satisfied. Or so the model says. A 10% after-inflation raise will do that.

To be sure, not every measure of the economy is outstanding. At Yale University, economist Ray Fair’s economic model says slow growth in gross domestic product will fuel a Republican win. (Though Fair himself has said Trump’s a wild card who could upend his model, and Fair predicted a Mitt Romney win last time.) Fair’s model is based on 0.87% GDP growth in the first three quarters of this year, about half what most economists expect.

Clinton needs to stop blowing this advantage by talking about the need for “ revitalizing the economy” — the job she hinted she would delegate to her husband, ex-President Bill Clinton. Mrs. Clinton needs to stop talking about revitalization — not stop talking about her husband, as feminists argued — and start pointing out that this expansion is vital indeed.

The past two national campaigns show how to do this, and how to mess it up.

In 2014, Democrats spent so much time pandering to social-issue groups, and apologizing for not yet employing every last member of said groups, that they forgot to argue that the stock market had tripled since the month they took over in 2009, unemployment had fallen by 3 million people since 2010, and as many as two-thirds of people in some states who had lacked health insurance were covered by Obamacare. Then-Colorado Sen. Mark Udall even used a nationally televised interview — MSNBC, but still — to tout three different kinds of gay rights without mentioning the economy. Udall lost.

I’m good with gay adoption too. But pocketbook issues affect more people, more directly. They settle elections.

Or Secretary Clinton could do what her husband did at Democrats’ 2012 convention, and sell Obama’s record. Bill’s job should be the one Obama jokingly said he’d earned: Secretary of Explaining Stuff. Bill (or Obama) could even borrow President Reagan’s line to sell the first President Bush’s de facto third Reagan term: Facts are stubborn things. After all, Obama’s approval ratings are better than the Gipper’s 1988 numbers. And turnabout is fair play.

That Trump has little to add to his economic pitch is clear. He’s recycling stories about Bill Clinton, women and even Vince Foster. If Hillary Clinton tells the economic truth, on Nov. 9 Trump will have stubborn facts (and electoral votes) coming out of his eyes, his wherever. He’ll just think it’s hell.

Tim Mullaney writes about economics and politics for MarketWatch. Follow him @timmullaney.

Hillary Clinton will win in November, says the economy