Financial Anxiety Index Declines, Boosting Obama's Odds

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President ObamaA gauge of consumers' financial insecurity that correlates with the outcome of presidential reelection races declined in March for the third straight month, signaling better odds for Barack Obama in November.

The Money Anxiety Index measures several economic factors associated with Americans' level of financial stress.

"We use GDP, unemployment, spending, savings, a whole array of economic indicators," Dr. Dan Geller, chief research officer for the MAI, told DailyFinance. "And we developed a model that is very reliable and predictable."

In the last 50 years, only those incumbent presidents who saw the MAI decline during the year of their reelection campaigns -- from January to November -- won a second term. "Conversely," MAI researchers explained in a press release, "presidents running for reelection lost when the Money Anxiety Index increased between January and November."

For March, the index stands at 90.5, which reflects a reduction of 1.3 from the previous month, and 3.4 points worth of lower financial anxiety from the same month last year. The March reading also represents the third consecutive month of declining anxiety, which bodes well for President Obama's chances in the fall. In January, the index stood at 92.2.

"The MAI is in a downward trend," Geller said, "which basically increases the probability of reelection for President Obama. However, we have to see how we end up closer to the reelection. The biggest threat is the uncertainty over gas prices, because this can derail the economy."

It's Not the Level -- It's the Trend


The last half century saw eight presidential reelection campaigns, five of them successful. And all five victorious incumbents had managed the feat of lowering the MAI in the last year of their first terms.

"Most recently," the MAI's release explains, "President George W. Bush won reelection when, during his reelection year -- from January to November 2004 -- the Money Anxiety Index decreased from 59.6 to 58.2."

In 1996, from January to November, the Money Anxiety Index fell from 69.2 to 68.8 -- and Bill Clinton was reelected.

Jimmy Carter, on the other hand, saw the MAI shoot up 18.1 points, from 80.3 to 98.4, from January to November 1980. What followed, of course, was his trouncing at the hands of Ronald Reagan, who won 489 electoral votes to Carter's 49. George H. W. Bush suffered a similar, if milder, fate, when the MAI increased 4.0 index points, from 81.7 to 85.7, from January to November 1992. He lost to Clinton, 370 electoral votes to 168.

The MAI's predictive power begins with the presidency of Lyndon B. Johnson, who won a presidential election in his own right in 1964, after serving out the remainder of John F. Kennedy's term. That year, from January to November, the MAI decreased from 63.0 to 48.5. The pattern holds for the electoral fates of Presidents Gerald Ford and Richard Nixon.

Different Economic Equation, Same Electoral Prediction


"The other interesting factor," Geller told DailyFinance, "is that even though during different reelection years there were other issues such as conflicts, at the end of the day, people vote on the economy, with their wallets and purses. That's what [the Money Anxiety Index] shows."

This conclusion matches one previously reached by Yale economist Ray Fair, who developed an equation based on economic indicators that has likewise had remarkable success predicting the winners of presidential elections. According to The Los Angeles Times, Fair's model has been correct 90% of the time. And he makes his predictions relatively early -- "way back in October 2010" for the 2012 race, "long before anyone knew who would be challenging Obama this year." (Fair predicts "another decisive Obama victory" this November.)

Fair says economic growth and inflation are the two factors that determine the outcome of a race for the White House. "Historically," he said in an interview for The New York Times Magazine, "issues like war haven't swamped the economics."



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AussieBetPromo

$1.47 are the current odds for Obama to win the election.

http://goo.gl/0c9He (not my site)

April 25 2012 at 10:04 AM Report abuse rate up rate down Reply
Hi RON

This President has got to go -------------------- wishing I could vote a number of times like they do in Chicago !!!

March 18 2012 at 9:54 PM Report abuse +2 rate up rate down Reply
parthenon1

This president is such a novice! He will let the unreasonable stance on gas prices kill any advantage he has gained on the economy. But on second thought it wont matter we all know when gas gove over $4 in every state the economy will die and unemployment (whcih is vastly under reported) will go back over 9+ reported and 18% unreported. When the gas stranglation hits full force even the inflation index which purposely doesnt include food and energy, will still shoot upward. It it wasnt so bad on all Americans it would almost be worth it to see Obama swamped worse than "Peanuts Carter".

March 18 2012 at 9:26 PM Report abuse +1 rate up rate down Reply
gmydogbud

Wonder if the dead of Chicago will vote as they did for John Kennedy in order for President Obama to be re-elected! We all know how honest Chicago is!!

March 18 2012 at 3:27 PM Report abuse +2 rate up rate down Reply
gmydogbud

President Obama had said that He could live with $6.00 per gallon gas prices. Shows you how out of touch he is with the American People!!!

March 18 2012 at 2:18 PM Report abuse +2 rate up rate down Reply
gmydogbud

President Obama had said that He could live with $6.00 per gallon gas prices. Shows you how out of touch he is with the American People!!!

March 18 2012 at 2:18 PM Report abuse +1 rate up rate down Reply
we love mario!!!

What a liberal article this was. Do you think he can get re elected when gas is 4 dollars a gallon, and he doesnt care, and wont drill because the oil companies are donating to his campaign. Wake up America!!

March 17 2012 at 11:43 PM Report abuse rate up rate down Reply
croone22

Let's stop the stupidity, there is a quick fix. It may not be the final solution but it will help...a lot. Call your Congressman and tell him or her to get the CFTC (The Commodities Futures Exchange Commission) to increase the Margin Requirement on Crude contracts to 50% from approx. 5% where it is now. It will bring prices down significantly and quickly. The Crude Futures Exchanges are brooken and corrupted. Stop them now or you will be economically dstroyed by them. As one of the first Registered Options Principles of the CBOE on Wall Street,and ,unlike the President and TV pundits, I know what i am talking about.

March 17 2012 at 1:30 PM Report abuse -1 rate up rate down Reply
croone22

Type your commeLet's stop the stupidity, there is a quick fix. It may not be the final solution but it will help...a lot. Call your Congressman
and tell him or her to get the CFTC (The Commodities Futures Exchange Commission) to increase the Margin Requirement on Crude contracts to 50% from approx. 5% where it is now. It will bring prices down significantly and quickly. The Crude Futures Exchanges are brooken and corrupted. Stop them now or you will be economically dstroyed by them. As one of the first Registered Options Principles on Wall Street,and,unlike the President and TV pundits, I know what i am talking about. nt here

March 17 2012 at 1:27 PM Report abuse rate up rate down Reply
ha6ai

Let's see ... The economy is tanking. Unemployment/underemployment is way up. Deficit's exploding. National Dept is at Greek levels. MIddle and working class earnings are being depleted - by gas and higher medical insurance because of Obamacare. Savings are being drained. Retirees earn no interest on their savings. Minimal and low paying jobs for new workers. Housing's a complete bust. Rents are being pushed higher. Obama spends his time campaigning and fund-raising (and playing golf).

And, some lefty propagandists are telling us that American's "financial anxiety's" are declining because of some BOGUS "index".

C'mon AOL/HuffPuff, give us break!

March 17 2012 at 3:09 AM Report abuse +3 rate up rate down Reply