Does the state of the economy predict the election?

Trend - 8/4/08 Obama 316, McCain 209 Ties 13

Does the state of the economy predict the election? No, but it sure gives a hint. Here is a graph from Andrew Gelman, a professor of statistics and political science at Columbia University showing how the popular vote for the party incumbent in the White House relates to economic growth. There is clearly a strong correlation.

Based on this model, Obama is predicted to get 53% of the vote.

There are two clear outliers in the graph: 1952 and 1968. Both can be explained fairly directly. In neither year was the economy an issue at all. In 1952, the popular general Dwight Eisenhower, who won WWII, promised to end the stalemate that had been going on in Korea for two years. The hapless Adlai Stevenson wasn't running on continuing Harry Truman's economic policies. He wasn't even Truman's Vice President. In 1968, the economy was booming but the dominant issue was the unpopular war in Vietnam and the starting gun for the culture wars (fired by Mayor Daley's police force in what was later called a "police riot."). The economy wasn't on the agenda at all that year.

(http://www.electoral-vote.com/)

5 Yr Gas Prices (USA Average)

California judge rules early cell phone termination fees illegal

Thu Jul 31, 2008 12:48PM EDT

In one of the most significant legal rulings in the tech industry this year, a Superior Court judge in California has ruled that the practice of charging consumers a fee for ending their cell phone contract early is illegal and violates state law.

The preliminary, tentative judgment orders Sprint Nextel to pay customers $18.2 million in reimbursements and, more importantly, orders Sprint to stop trying to collect another $54.7 million from California customers (some 2 million customers total) who have canceled their contracts but refused or failed to pay the termination fee.

While an appeal is inevitable, the ruling could have massive fallout throughout the industry. Without the threat of levying early termination fees, the cellular carriers lose the power that's enabled them to lock customers into contracts for multiple years at a time. And while those contracts can be heinously long, they also let the carriers offer cell phone hardware at reduced (subsidized) prices. AT&T's two-year contract is the only reason the iPhone 3G costs $199. If subsidies vanish, what happens to hardware lock-in? Could an era of expensive, but unlocked, hardware be just around the corner? It's highly probable.

Of course, the carriers aren't going to take this lying down. Early termination fees are seen as critical to business, so carriers are expected to look for ways to reclassify the fees (such as by calling them "rates," part of the arcane set of laws that covers the telecommunications industry). The industry is also pushing for the federal government to step in and claim oversight over the early termination fee issue, which would invalidate any state ruling. The FCC is generally more tolerant of such fees, though Chairman Kevin Martin has proposed a plan whereby the fees are decreased the closer you are to the end of your contract.

The FCC may also buy the argument that, since carriers are nationally based (and consumers can use their phones anywhere in the country), that a single policy should apply across the nation, rather than creating a patchwork of legislation that could lead to confusion and chaos caused by having 50 different policies.

Is the early termination fee dead? Not yet, but it's looking a little haggard.