It IS the economy stupid.

Whether the phrase "It's the economy stupid" is attributable to President Clinton or to strategist James Carville, ultimately it is the truth. The notion was not invented by the Clinton War room, but the understanding and distillation of the concept into that simple phrase propelled them to victory over President Bush (41). Prior to that, President Reagan was elected because of a national economic malaise under Jimmy Carter. There were other reasons like the Iran hostage crisis, but the underlying malady of America was a big factor. John McCain lost to Obama for a number of reasons, the War on Terror included, but the economic meltdown and his reaction to it were huge and likely deciding factors. Since the Great Depression the economy has always played a crucial role in elections and it will do so again in these mid-term elections for the Democrats. It may seem obvious but it doesn't hurt to remember why.
No matter what is a voter's top priority it can always be linked back in some way to the economy. Sean Trende in RealClearPolitics pointed out last week that it's not just the economy;

"But it is far from clear the economy is what is principally responsible for driving down President Obama's approval rating and engendering a Democratic debacle in the fall.

...As you can see, health care overwhelms the economy in these responses, and policy-driven answers such as "spending," "oil spill," and "everything" are about as salient as "economy."  Indeed, on page 22 of the survey, the top reasons given for disapproving of the President were fiscal irresponsibility, health care, and the oil spill.  More respondents expressed concern that the President was a socialist/communist (8%) than were upset about jobs and unemployment (6%)."

That doesn't sound like the economy, but it is. Everything, and I mean everything, in America comes second to the economy. National Security? You need a strong economy to pay for a strong military. Education? On an individual level it's related to future jobs which is indeed dependent on a sound economy. On a national level continued economic success is dependent on a successful education system. Government spending? A sound economy means more GDP which means more potential or actual government tax revenue. A country outspending it's tax revenue is either going to have to grow itself out of that situation (on the GDP side, while containing spending) or else it's eventually going to go bankrupt like Greece is flirting with doing now. The government spending issue is intrinsically tied to the economy. The more counter-business government policy and regulation, the more offshoring will occur, the smaller the GDP, the less tax revenue there is and the worse off everyone is, wealth-redistribution donor or recipient.  The oil spill?  Oil is a very economic issue, and dealing with a spill with moratoriums and lawyers will have economic impacts for decades to come.  For those affected by the spill, the issue as as much economic as anything else.

It is the economy. The very future of America is dependent on its solvency and wealth.  Medicare, Health Care, national defense, in fact everything the government does, requires money. That requires government revenue, which in turn requires a strong economy that generates wealth and therefore revenue that can be taxed. And freedom requires not only blood, it requires money. And your way of life too, is contingent on the American economy continuing it's greatness.

How people vote, whether they realize it or not, is rooted in economics. Economic survival trumps every other consideration when it comes down to it (except for survival itself), because economic survival equates for most of us, to actual survival.  Morality and ethics even come second for some when it comes down to being able to put food on the table. It's not universally true - religion and ethics often do trump or at least influence how economic decisions are made.  The decision not to steal despite being hungry is a moral choice.  But the issue of survival in that case does not go away, the method of solving the problem simply takes on a different form.

If the economy does trump everything, then the President indeed is in trouble, that's all I'm saying. Sean Trende's article makes sense.  Predictive models gauge the relative importance of various factors in  determining specific outcomes.

But since many of the “it’s the economy, stupid” arguments rely on an appeal to economic modeling to make their point, let’s examine an actual model. There are a large number of models from which to choose, so to try to insulate myself from accusations of cherry-picking, I’ll use a piece Brendan Nyhan referred me to in an earlier back-and-forth: a 2002 article by Professor Brian Newman of Pepperdine.

Newman’s model uses two economic indicators – inflation and unemployment – to predict average monthly Presidential approval.It also utilizes variables for both positive and negative personal, domestic, and foreign policy events. The coefficients for the statistically significant factors in Newman’s model, which explains about 90% of the variance in Presidential Approval ratings, are as follows:

A "negative domestic event" seems pretty vague but it would seem the oil spill qualifies.  My contention however, is that the oil spill is still an economic event as much as it is an environmental one.