Thought of the Week:
At the risk of stating the obvious, President Joe Biden’s (and by extension any Democratic presidential candidate’s) reelection campaign is in serious trouble. In fact, a longtime Democratic political consultant went on record days ago stating that only an ‘October Surprise’ could save him. While polling data, debate and press conference performances, a failed assassination attempt of his chief rival, and an increasing number of calls from senior Party leaders to withdraw from the race all betray Biden’s possible exit, something more is going on here, something similar to eight years ago. If this blog had existed back then, at about this same time in the race, I would have written that Hillary Clinton’s campaign was in trouble. I know what you’re thinking, “Hold on there Jamie. That’s easy to say now. Every poll, pundit, and political observer had Hillary winning. You’re not saying you predicted Hillary’s loss and Trump’s win are you?” I’m not. Like most, I forecasted a Clinton presidency and was as surprised as anyone come Election Day. However, I did recognize that her campaign was struggling separate and apart from the FBI’s investigation of her personal email use. At the time, a friend from high school owned and operated retail stores in Union Station and Reagan National Airport that sold political memorabilia—hats, t-shirts, mugs, etc. Going back to the first Clinton administration, without exception, whichever candidate’s items generated the greatest sales tally won the election; and at his stores Trump outsold Hillary by a landslide. What’s more, a group of friends who took weekend motorcycle rides across western Maryland, Virginia, West Virginia, Pennsylvania, and Delaware reported that once they broke the Washington, D.C., metropolitan area’s perimeter, all they saw were Trump signs. They swore something was different about that election cycle, and like my retail friend predicted a Trump victory. While I found their observations interesting, I didn’t put as much stock in them as I did the political analysts I met with and heard speak on a regular basis. Like eight years ago, something different is happening today. When I came home from work Monday, my wife, a registered Democrat, a suburban mom, someone whose interest in politics could be described as lukewarm at best, and who today’s analysts describe as a “double-hater” because she doesn’t like either candidate, had a TV news channel on and her laptop open. There, she was researching JD Vance’s policy positions, more than 100 days before the election. Now, I’m not saying this guarantees a Trump win, but when a voter who falls into multiple swing demographics is googling VP candidates more than three months out from the election to verify rumors she’s heard and see if there’s enough in his background to support, well, this puts the Biden campaign in trouble with a capital T. Like many Washington insiders, I’m placing the odds of a Trump victory at near 75%. For those looking for signs of hope on the other side of the aisle, there is one saving grace. Just like 2016, every trade association and think tank expert, every consultant, and just about every lobbyist we spoke to this week isn’t just predicting a Trump win, they’re talking about it as if the election is already a foregone conclusion.
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Eurasia Group Believes Attack on Trump Solidifies his Position in Race; Pressure from Senior Democrats Ups Biden’s Odds of Dropping Out. The image of a bloodied former president Trump raising his fist framed by Secret Service agents and an American flag will be the defining image of this Presidential race. Trump’s response drew a more powerful contrast with Biden’s age than any debate performance or press conference could and gave a boost to Trump’s campaign at a crucial moment. Although the motive of the shooter remains unclear, being the victim of an attempted assassination will make it harder for Democrats to push the claim that Trump is a unique threat to democracy. Trump’s current level of support is likely more secure following the event, and it will be increasingly challenging for President Biden to make up ground. The incident highlights the threat of an America divided against itself, and it reinforces the view that political violence is a risk regardless of the electoral outcome—the centrality of politicians in American culture makes them targets. At the same time, calls for President Biden to exit the race and a Covid diagnosis, which could provide the excuse for a graceful exit, up the odds from 20% to 40% he withdraws the race. In fact, several recent developments indicate increasing momentum behind the push for the president’s exit: Senate Majority Leader Schumer (D-NY) told Biden in a one-on-one meeting he should leave the race; Schumer and House Minority Leader Jeffries (D-NY) have coordinated a delay in the Democratic National Committee’s plan to nominate Biden before the convention via virtual roll call; and Rep. Schiff (D-CA), an ally of Rep. Pelosi (D-CA), called on Biden to exit. Biden’s covid diagnosis provides his inner circle with a graceful-exit card that has been lacking. The president can claim that lingering symptoms from his covid diagnosis makes it impossible for him to handle the rigors of the campaign—an out that allows him to elude discussion of his age. Signposts that would cause the call to move above 50% include: any sign of fracturing within the Congressional Black Caucus; Jeffries repeating Schumer’s call for Biden to exit; and any additional delay in the planned early roll call vote that would make Biden the formal nominee. If Biden exits, Vice President Harris is the overwhelmingly likely Democratic nominee (90% odds). Although Harris performs slightly better against Trump, Trump would still be the favorite (65% odds of victory).
Observatory Group Says Although Everything Changes in Politics, Some Things Remain the Same. Over the past two weeks, monumental shifts due to historical moments (President Biden’s debate performance and the attempted assassination of former President Trump) have altered the outlook of the presidential race and Congress. At present, Trump and the GOP have a 65% chance of sweeping the White House and both houses of Congress. However, there are over 100 days until the November election, and we have already seen two Black Swan events in a matter of weeks. Thus, there is still time for another Black Swan event that could change the course of the election or for the race to shift again as more voters begin to focus on the campaign. For now, Trump has the political leverage, the political capital, and the political moment—a trifecta that politicians typically only dream about. Two major events will prove if Trump can take advantage of these tailwinds—the reaction to his selection of Sen. Vance (R-OH) as his running mate and if Trump brings the nation together in his acceptance speech. At the same time that momentum is shifting towards Trump, Biden and the Democrats are in disarray, openly questioning if the president should be replaced and expressing that they see no path to a Biden victory in November. The contrast could not be starker: events (starting with Trump’s hush money conviction to this past weekend’s assassination attempt) have turned Trump into a living political martyr and galvanized Republican support for the former president, all while Biden is still trying to tamp down a rebellion in his own party led by its popular former Speaker of the House Pelosi. While everything at the top of the ticket seems to be changing, some things remain the same. The Senate is likely to flip Republican, but only by a few seats; and the House is still a close call, even as it appears to be moving towards the GOP. And the policy outlook for a Trump 2.0 administration remains the same: renewal of the 2017 tax cuts; implementation of a deregulatory agenda; a more traditional Republican energy policy; an expansive fiscal policy; border security; confronting China; and America First geopolitics with trade at its center.
Politico Reports Vance Pick Signals ‘More Aggressive’ Trade Policy if Former President Trump is Elected. Former President Trump selected Sen. Vance (R-OH) as his running mate, embracing one of the most ardently protectionist Republican senators and sending another signal that he would pursue aggressive new trade policies in a second term. Sen. Vance, a Yale Law School graduate and Marine Corps veteran, rose to political prominence after his book, Hillbilly Elegy, depicted the stark economic realities of life in Appalachian Ohio. Since winning a Senate seat in 2022, he’s made no secret of his desire to use government policies—particularly tariffs and trade barriers—to rebuild industrial jobs for communities across the deindustrialized Midwest. “You’re going to see a much more aggressive approach to protecting domestic manufacturers” if Trump wins a second term, said Vance. Presumably, this includes higher duties, blocking foreign mergers, and even reducing the value of the dollar. The selection of such an ardently protectionist vice presidential candidate signals to voters and industry alike that a Trump White House would be serious about doubling down on tariffs and other trade barriers in a second term and would be less likely to bow to financial sector officials who push more free-trade-friendly positions. The pick is also a sign that the Trump campaign is moving to consolidate support from working class voters in the industrial Midwest and other regions, a constituency the Biden campaign has also courted. In fact, Sen. Vance has been clear he wants to move working class voters, particularly union members, away from their historic allegiance to the Democratic Party.
“Inside Baseball”
GOP convention unity masks policy fights ahead. Although former president Trump has sold Republicans on his brand of politics, his policy agenda will be a tougher pitch. Republicans of all factions have publicly fallen in line behind Trump, and the GOP’s show of unity, aimed at winning the White House and Congress, might last through Election Day—obscuring policy debates still marinating under the surface. Under Trump, the party downsized its policy platform to limit swing-voter controversy. Should Trump win back the presidency, his policy agenda—from abortion to trade to taxation—would face opposition from Democrats, divisions among Republicans, and pressure from lobbyists who won’t surrender willingly. The party’s new platform offers the first draft of Trump’s vision for a second term. It’s light on details and focuses on broad Republican goals like lowering inflation, cutting regulations, and securing the southern border; it also highlights Trump’s populism on trade policy. While the platform is designed to be benign, lobbying groups and conservative activists have started to gear up for fights over the specifics. In fact, congressional control will be extremely important in determining the success of a second Trump term’s agenda, and the margins in Congress, if still extremely slim, will frustrate the executive, no matter who wins in November.
Florida Governor DeSantis may have Already Begun his Quest for the 2028 Republican Presidential Nomination. According to Bloomberg Government, the Florida governor spoke at an Iowa Republican Party event during the GOP convention in Milwaukee. DeSantis’ presence at the event is seen as a key sign of his interest in running for president in 2028, said contacts who were granted anonymity to disclose private conversations.
In Other Words
“We’re done importing foreign labor, we are going to fight for American citizens and their good jobs and their good wages,” Republican vice-presidential nominee JD Vance.
“This attempted assassination of the 45th and soon to be 47th president of the United States has united our conference in a way that nothing else could have done,” Rep. Alford (R-MO).
Did You Know
The first Republican National Convention was held June 17-19 at Musical Fund Hall in Philadelphia. At the convention, the party nominated Sen. John Fremont from California for president and William Dayton, a former Senator from New Jersey for vice president.
Graph of the Week
Speaker after speaker at the Republican National Convention has laid the blame for high inflation with the Biden administration. The irony is Trump’s platform, including tax cuts, tariff increases, and a crackdown on immigration, would, in the view of many economists and investors, stoke price pressures. As the Federal Reserve prepares to start monetary easing, the potential shift in an array of policies looms as a risk for sustained interest-rate cuts in 2025.
