Well, Bernie Sanders certainly doesn’t agree that the economy is good. Worker stagnation, 9.9% unemployment by his calculation, an increase in wealth inequality, slow economic growth, etc.
What it comes down to, most likely, is whatever happens in the world and at home in the next 8 months. There are a lot of experts warning of another financial crisis about to hit. Citibank just issued a global recession warning. Personal and public debt is back to levels seen before the 2008 crash, and the economy is growing sluggishly.
Worse, if another recession hits, the government is going to be out of options. Interest rates have little room to move, QE has just about run its course, etc. So things could be significantly worse economically by the time the election hits.
Another wildcard is what’s going on in the world. Another major terrorist attack or another aggressive move by Russia or China could suddenly turn this into a foreign policy election. If the immigration situation in Europe causes more dramatic problems, it could become a ‘nativist’ election favoring people like Trump or Cruz.
Remember 2008? The financial crisis changed the entire tone of the election. McCain was doing quite well until he decided to suspend his campaign to run back to Washington to ‘manage the problem’. He was widely derided for that, and his campaign never recovered.
So it’s still early days. I still think it’s possible that the Democratic candidate will be neither Hillary or Bernie, but someone like Elizabeth Warren or Biden/Warren. I also think this is a year in which we could easily see the rise of a third party on either the left or the right. If Trump is the nominee, the Republican convention will be very heated. If Hillary beats Bernie and then gets indicted, it would throw the nomination to the convention.
Overall, I’d say this year has the most potential for volatility as any election I can remember. So any predictions at this point need to have a big asterisk beside them.
