When I did my best attempt to fit the Hibbs model, which predicts incumbent-party vote share using change in per-capita income growth, I got a forecast of 52 percent of the two-party vote for the Democratic nominee.
Other forecasts give slightly different answers, as there are many ways of constructing a prediction model given past elections, but the general consensus is that the fundamentals predict the election is likely to be close. The economy is going okay but not great; the president is somewhat popular; there is a small minus for the Democrats in that the incumbent is not running for reelection, but a small minus for the Republicans in that they control both houses of Congress and, hence, represent a less appealing choice for centrist voters who prefer divided government.
So, to start with, no explanation is needed for why the election might be close. Yes, Donald Trump is an unusual candidate, but research by political scientist Steven Rosenstone and others suggests that when it comes to the general election, Americans vote party more than candidate.
To put it another way, the electoral landslides in postwar presidential elections were in 1964, 1972, and 1984 — all years in which the economy was booming. This year, the economy is doing okay but not booming, hence the more equivocal forecast.
To return to Krugman’s statement from the other direction: Can it really be that the mainstream media’s adversarial reporting on Hillary Clinton is enough to swing the needle so much? I don’t see it. Again, it seems to me that Krugman is trying too hard to explain something that should not need explaining. And I’ve never been convinced by claims of huge media effects in U.S. politics; for example, I was skeptical of a claim that Fox News could swing the polls by 12 points in Trump’s favor.
That said, this is only a single election. Trump is a unique candidate. Arguably we haven’t seen anyone like him in American politics since Joe McCarthy.
So I can’t really say that Krugman’s wrong. Maybe candidate effects in this particular election really are huge, and maybe media bias really does have huge effects this time. I’ll just have to say that Krugman is a journalist (he’s also an economist, but he’s not really using any economics in this particular column of his). Therefore, he is coming at things from a much different perspective than I would, as a political scientist.