Nancy Pelosi, Next President of the United States?
Nancy Pelosi, Next President of the United States? by JAMES RICKARDS for Daily Reckoning
IN an ideal world, markets and politics would be separate. But we don’t live in an ideal world, and the outcome of the upcoming election could have large ramifications for markets.
The stock market has done extremely well under Trump, so a Trump victory would logically pose no threat. But a Biden victory would mean higher taxes, more regulations and other policies that aren’t supportive of markets.
That’s why the election outcome is so important for investors. With the election just over two months away, where does the race presently stand?
We’ve all seen the headlines showing Joe Biden with a big lead over Donald Trump in the national polls and substantial leads in almost all of the battleground states in the state-specific polls.
Polls can be valuable, but not if you take them at face value. You have to deconstruct the polls to see what they are really saying. The results can be surprising.
The Only Polls That Count
First off, national polls don’t matter because the U.S. doesn’t have national elections. We have 50 separate elections in the states plus one in the District of Columbia.
Biden can beat Trump in California by three or four million votes, but none of those votes matter because you can only win California once. All of the excess votes are wasted.
About 40 of the 50 states (and D.C.) are foregone conclusions. They will fall predictably in either the Biden or Trump column. Only about ten states will decide the election and those polls are the ones to watch.
Even in those few states, Biden has the lead in all but two or three. Does this mean the election is over and Biden will win?
Of course not. We still have 65 days to go and the election season is really just getting started.
Most voters don’t pay much attention until after Labor Day. A lot can change. But, there’s an even bigger reason to be optimistic if you’re a Trump supporter, or to be concerned if you’re a Biden supporter.
Do People Answer Polls Honestly?
It seems the polls are not accurate at all. Many voters do not answer pollster questions honestly because they fear their answers will be recorded or revealed and their real views could cost them their jobs or bring social criticism down on their heads.
What’s most interesting is the skew. CloudResearch conducted a study that revealing that 11.7% of Republicans don’t give pollsters their honest views, while the figures are 5.4% for Democrats and 10.5% for Independents.
If we assume that all of the Republicans and Democrats who do not give true opinions to the pollsters will vote for the candidate of their party and the Independents split 50/50 on the same issue, this would give the Republicans a gain of six percentage points compared to what the polls show publicly.
That’s enough to almost wipe out Biden’s national lead and more than enough to wipe out Biden’s lead in all of the battleground states.
The result would be a win for Donald Trump on November 3.
More Good News for Trump
Here’s some more good news for Trump (or bad news for Biden):
A recent CNBC poll among the top global CEOs says they believe that Joe Biden will win the election. “Wait,” you might say, “how’s that good for Trump and bad for Biden?”
Well, it’s because CEOs are almost always wrong about politics.
They may be great business leaders and be extremely wealthy, but that does not make them good forecasters of events outside their narrow business field.
CEOs tend to live in a bubble. They cluster with other CEOs and wealthy entrepreneurs in places like Martha’s Vineyard, Aspen, Beverly Hills and Silicon Valley. They travel on private jets and live on large estates surrounded by other large estates.
As a result, they don’t connect with everyday Americans, do not pick up important social clues and tend to echo what they hear from other elites (who in turn are echoing still other elites).