Why 2012 is the Republicans' to Lose

As we get closer to 2012, there is one chart that pundits and columnists need to constantly refer back to in their writing - a scatterplot that shows how changes in real disposable income correlate with the success of the incumbent party in presidential elections:

(Courtesy of Seth Masket)

The general trend is clear: parties which oversee increases in personal disposable income generally do better in elections than parties which do not.

If the current negative news about the economy pans out, then 2012 should favor a Republican candidate.

If Republicans nominate a very extreme ticket (say, Rick Perry or Michele Bachmann) then the country will be running a very interesting experiment: would you rather vote for the administration which is overseeing a weak economy, or entrust it in the hands of radicals?

I am having difficulty thinking of when that question has been (recently) asked of the American people.