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Washington has been a bit perplexed by President Obama’s small but persistent lead in the polls. His administration would seem to fail the “Are you better off than you were four years ago” text. And presidents who fail that test lose, right?

But perhaps that’s the wrong question. We focus on the question “Are you better off than you were four years ago” because we assume voters aren’t sophisticated enough to vote based on the right question, which is “are you better off than you would have been if the other party’s candidate had won the presidency four years ago?”
The conventional wisdom: Voters don’t do counterfactuals. “It could have been worse” is a losing message. That’s been the Romney campaign’s theory of the case, certainly, and many in the media have bought it. But perhaps we’re not giving voters enough credit.

The new Allstate/National Journal/Heartland Monitor poll tested this directly. First, they asked the standard “are you better off now than you were four years ago?” A plurality said they were not. Then they asked, “are you better off because Obama won in 2008″? A plurality said they were. Here’s the graph:

It remains the case that most forecasting models say that the economic fundamentals predict a slight Obama victory. But what we’ve never quite known is whether those models, which mostly use data from elections in much more normal economies, hold up amid 8 percent unemployment.

The most popular interpretation is that they’re overly biased towards the incumbent, and that weak growth that might be sufficient in a normal economy does not get you reelected in a terrible economy. That’s been the Romney campaign’s theory of the case, for instance. But another interpretation, and one that increasingly seems to fit the election, is that they’re actually understating Obama’s advantage. in this view, voters understand the economy is horrible and they understand that what made it horrible began before Obama, and so they’re grading Obama on a kind of curve.

That suggests, again, that the question they’re likely to ask isn’t “Do I feel better off than I did four years ago?” Voters may not expect to feel good four years after the worst economic crisis in generations. Rather, the question is “has Obama done a good enough job under the circumstances, or at least a better job than the Republicans would have done?” And the electorate’s answer, so far, seems to be that he has.