No, she will win the election, though likely only by one or two states.
Doing a beet imitation?
It's pretty clear that the economy isn't getting better between now and 2012, and Obama isn't winning with 8-9% unemployment, no matter how crazy his opponent is. Nominating Palin instead of Romney or Thune is the difference between a narrow Obama loss (i.e. 2004, but switch Ohio) versus a landslide Obama loss (something like 1980, though Obama winning CA, NY and IL will inflate his EV somewhat).
Saying Obama wouldn't win with a 8-9% unemployment is absurd like much of the historical stuff(ie. the House never flipping without the senate). While interesting, it is not an iron-law, and more an observation of where politics was at the time. Obama leads Palin right now among a likely-vote pool that is far more pro-GOP than the 2012 electorate ever will be.
And if there is one way to remove the enthusiasm gap, its someone like Palin as nominee. This is not to say economics don't matter. But to assume that the average voter is so stupid that they can not simultaneously feel dissapointment/frustration with Obama and horror at the thought of Sarah Palin as US president is to treat the electorate with utter contempt. In all seriousness, is being forced to work as a paralegal for the next two years going to somehow make a kid who graduated from a top school in 2007 or 2008 suddenly decide to vote for Palin. Or will they not vote in 2010, and then drift back into the voter pool as Palin's likely circus of a campaign divides the country.
I would actually inverse this. The economy will not determine whether or not Palin loses. Four years of a bad economy is quite simply not enough to produce that scale of a shift in the electorate regardless of whether unemployment is 9% or 14%. What it will determine is whether it is close or a blow-out. But there are too many people for whom the prospect of Palin in office is a joke, and who doubt she would improve anything even if they think a Republican generally would.
