In the following article Tony Sagami of Uncommon Wisdom, shows how election results can be accurately predicted based on economic factors. In our Misery Index we show how two simple factors like inflation and unemployment were the basis of the original idea of predicting election results based on economic factors. But today Tony shows how a more complex calculation has been developed by University of Colorado political science professors Ken Bickers and Michael Berry. This model can predict results on a state by state basis and thus calculate electoral college results instead of popular votes. According to Michael Berry, “When we populate the model with data from each of the election years from 1980 through 2008, we correctly estimate the winner in each of those elections.” Unfortunately, their projections are based on economic data that is not the most current available data. Their most recent analysis includes unemployment rates from August rather than September and changes in per capita income come from the end of June and this is the last update they will release before the election. In this article Tony also touches on energy prices and answers the question, “Is it fair to blame Obama for the high price of Gasoline?” ~ Tim McMahon, editor
The Issue That Could Decide the 2012 Election
by Tony Sagami
From my vantage point, a Mitt Romney victory looks almost assured. And if you look at some research done by a pair of political-science professors from the University of Colorado, you’ll see why I expect a change in administration for the next four years.
In just a moment, we’ll look at one of the biggest opportunities a Romney win could open up for both investors and job seekers. I’ll also share with you how to get access to my specific stock picks in this and other sectors that stand to benefit from a possible change in our country’s leadership.
But first, let’s look at …
The Issue That Could Decide the 2012 Election
Ken Bickers and Michael Berry have developed an intriguing and historically accurate forecasting model that has successfully predicted the winner of every presidential election since 1980.
The root of their methodology is that Americans vote based on their pocketbook. And these decisions are rooted in the economics of each individual state, such as state unemployment rates and real per-capita income.
In other words, like James Carville said, “It’s the economy, stupid.”
And the economy could be the issue that will decide the election.
According to these two political-science experts, Romney will receive 330 of the total 538 Electoral College votes and President Barack Obama will capture 208 votes.
This model isn’t perfect. It has a historical error rate of five states and 28 Electoral College votes per presidential election. But it is the most-accurate forecasting measure I’ve seen.
Could We Really Be Better Off Under Romney?
Assuming that Bickers, Berry and I are right, there are going to be some immediate and profound changes to our economy and the way you should invest your money.
In the previous weeks, I’ve focused on tax and regulatory issues that could be beneficial for investors under the Romney plan. But this week, I want to focus on how the energy landscape will change and how it is going to make some of you very, very rich.
The price of gasoline has more than doubled since President Obama took office. One reason is that the Obama administration appears to have made it difficult and expensive to pull oil out of the ground or ocean.
Offshore permits dropped by an industry-killing 68%. This was after issuing ZERO offshore drilling permits since the BP disaster.
According to the Bureau of Land Management, approximately 3,500 leases were issued in 2007 for energy development on federal property. That number was 37% lower in fiscal year 2011, when only about 2,200 leases were issued for the same purpose.
Romney vowed to encourage more drilling by streamlining and improving the permitting process, opening up new areas and boosting overall drilling activity.
He said he will do that by giving states more power to regulate exploration and production on their own border and on federal lands inside their borders.
Romney also said he will limit the power of the Environmental Protection Agency to restrict production and look for a big push to open up access to previously prohibited areas.
Gasoline Prices Soar, Nat-Gas Prices Plummet
Gasoline prices have soared, but the price of natural gas has plunged from a peak of $13.58 per million British Thermal Units in July 2008 to less than $4 today.
The reason for the dramatic price drop is that improvement in hydraulic fracturing (“fracking”) and horizontal drilling technologies are powering a new energy revolution.
Natural gas production is at 6.5 million barrels per day, a 15-year high. And the Department of Energy forecasts that, next year, U.S. crude and natural gas production will average 11.4 million barrels per day.
Looking forward, Citibank forecasts U.S. production will reach 13 million to 15 million barrels per day by 2020.
To put those numbers in perspective, Saudi Arabia produces around 11.6 million barrels.
As a result, we’ve slashed our dependence upon foreign oil from a whopping 60% in 2005 to 49% today.
In fact, if the politicians and environmental crowd don’t get in the way, the U.S. will be able to tap into our vast natural gas and oil reserves. This could lead to energy independence, for a long time to come.
According to the U.S. Geological Survey, we have 1.8 trillion barrels of shale oil/gas, which is enough natural gas to serve all the energy needs of the United States for at least the next 100 years.
Free-Market, Not Government, Stimulus
The unemployment rate, while improving, is still horrible. Twelve million Americans are out of work and another 9 million are under-employed.
The boost in oil and natural gas production on private lands is largely responsible for boosting U.S. oil production by 25% since 2008 and has created 1.7 million new jobs as a result.
Those new jobs, according to Energy Research firm IHS, would pay an average of $35 an hour.
Those are the kinds of jobs our country needs — not the minimum-wage service jobs Obama has been creating.
But wait, it gets even better. IHS also forecasts the energy industry will create a total of 2.5 million new jobs by 2015.
And this will make a big dent on state and federal deficits. I’ve seen forecasts for this new energy revolution to add $62 billion to federal and state revenues in this year alone.
China Has Cheap Labor U.S. Will Have Cheap Energy
It is hard to quantify the impact that lower natural gas prices and abundant supplies will have on economy. But it is clear that cheap energy will have a huge impact.
That’s because a lot of companies that have previously left the U.S. are coming back because of our cheap energy.
Cheap natural gas prices are now making the U.S. into one of the most-profitable places in the world to make chemicals and fertilizer — two industries that use lots of natural gas.
Additionally, energy-intensive industries like aluminum, steel and glass are enjoying a dramatic drop in production costs.
Natural gas is so cheap that some of my Asian business contacts are now complaining that the U.S. is using cheap energy prices to steal their jobs.
Imagine that. We’ve been complaining for years about cheap Chinese labor. But cheap natural gas prices may offset that wage advantage and rejuvenate our economy.
A Romney presidency could create millions of high-paying energy jobs and lower energy prices for all of us.
As investors, the opportunities are huge. And on Nov. 7, you can be among the first to gain instant access to a dozen stocks tailored specifically to the election’s outcome … a dozen potential presidential profit-doublers, that is!
That’s because I’ve compiled a short list of companies, including my top two energy picks, whose profits (and stock prices) can potentially skyrocket under a Romney presidency. I call them my 12 Romney Windfall Stocks.
Now, if Obama makes his case to the American public to keep his job, you’re covered that way, too. That’s because my colleague Sean Brodrick has 13 Obama Profit Bonanzas ready and waiting for you for a potential second Obama term.
No matter who wins, you will know exactly where to invest your wealth based on who’s in the White House for the next four years.
Don’t wait till the elections are over — make November 7 a new beginning for your wealth when you reserve your “Election Day Survival and Prosperity Guide” today!
This article is reprinted by permission. Source: http://www.uncommonwisdomdaily.com