My Money’s on Obama Because…

… he’s the incumbent, and it’s really hard to beat an incumbent.  I’m not normally a betting man, but shortly after President Obama was elected, in 2009, I bet someone $5 he’d be re-elected.  Recently, I mentioned this bet to some graduate students and one of them wanted to make the same bet, so I put another $5 on Obama.  I’ve got $10 riding on him now, so don’t ask me, because I don’t want to bet more.  But I’m still thinking he’ll win the election in November, because he’s the incumbent.

Incumbents rarely lose their re-election bids.  The last president who out-and-out lost his was Jimmy Carter, and the one before that was Herbert Hoover.

One might argue that George H.W. Bush lost his re-election bid, but that is a special and unusual case because Ross Perot ran as a third-party candidate and got 19% of the popular vote.  Surely Perot took more votes from Bush than Clinton, so had the third-party candidate not been in the race, Bush would have been re-elected.

Then there is Gerald Ford, who lost to Carter.  But he’s a special case too because, first, he was never elected, and second, he carried the legacy of Nixon, who he pardoned, as a burden.

Perhaps Lyndon Johnson should count too, because he could have run in 1968 and chose not to.

My argument that incumbents rarely lose is supported by not counting these “special cases,” but it does seem that the circumstances surrounding those incumbent presidents are missing here.  So I’ll stick with my argument that they shouldn’t count.

The closest parallel to President Obama may be Jimmy Carter, the incumbent who actually lost.  Like President Obama, he was burdened by a sluggish economy and other issues.  And in many ways Romney seems like a stronger opponent in 2012 than Reagan did in 1980.

Romney’s problems exciting the Republican base may turn out to be an asset in November.  Reagan was viewed more of an extreme candidate when he ran, and while that plays well to the base, a more middle-of-the-road candidate has a better chance of winning swing voters.  Some Republicans may not like Romney, but they’re not going to vote for Obama.  Meanwhile, the perception that Romney is more moderate could win him some Obama supporters.

So, it looks to me like Romney is poised to make a good showing in November, and has a good chance to win the election.  But it is difficult to beat an incumbent, so my money is still on Obama.

Randall G. Holcombe is Research Fellow at the Independent Institute and DeVoe Moore Professor of Economics at Florida State University. His Independent books include Housing America: Building Out of a Crisis (edited with Benjamin Powell); and Writing Off Ideas: Taxation, Foundations, and Philanthropy in America .
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