The Zeitgeist: October 18, 2016
A LOOK AT TRUMP AND THE SENATE
2016 Election Outlook: The Big Questions. OK, everyone expected that this campaign season would be full of nastiness and vitriol. And it hasn’t disappointed. Weirdly, it’s gotten so bad that most people just want to stop their ears. We notice that in social settings, rather than open arguments breaking out (like during the Watergate crisis), there is a sort of embarrassing silence—as if no one wants to talk about the crazy uncle or aunt living in the attic.
But talk about it we must. Because I guarantee you: What happens in national politics over the next four months will move global markets. Investors are holding their breath. Right now, here are three of the biggest open questions.
Does Trump Still Have a Chance? Yes, but the odds are long against him. Both the futures markets and the expert forecasters now put the odds at between 80-20 and 90-10 for Clinton. Several key swing states, such as North Carolina and Florida, have swung from marginally pro-Trump marginally pro-Clinton. Many in the media are saying the race is basically over. Time magazine, which ran a Trump “Meltdown” cover in August, this week ran a “Total Meltdown” cover. The good news for Trump, if there is any, is that the poll gap seems to have stopped widening late last week. The bad news is that he’s now 6.4 percentage points behind in the RealClearPolitics average. Maybe not so bad for a total meltdown—but certainly not good.
Forecasters are arguing about whether there’s ever been a candidate, in the history of modern polling, who has closed a gap this wide so close to the election. The general consensus is that no, it’s never happened before. Yes, some candidates have widened their lead by more than 6 points in the final weeks (Reagan v Carter in 1980) or narrowed their deficit by more than 6 points (HW Bush v Bill Clinton in 1992). But in no case have such swings changed the election outcome.
Realistically, for Trump to win, several stars will have to line up in his favor. First, he will need to do considerably better than expected in his final debate (a plus for Trump: the bar will be low). Second, there needs to be fresh negative news about Hillary, such as a really damaging WikiLeaks revelation (though most of the “October surprises” thus far have been hurting Trump). Third, Trump needs to grab a decisive share of the undecided vote. Fortunately for him, this share remains relatively high because so many voters just don’t like either candidate. At this late date, at least 15% of the electorate have still not chosen for either Trump or Clinton, versus only 5% at this point in Romney v Obama. Finally, Trump needs to benefit from plenty of so-called “shy Trump voters,” those who don’t admit to favoring Trump in the polls but will indeed pull the lever for him.
If you put all those stars in the line, sure, Trump has a chance.
Will the Senate Turn Blue? Unlike the presidential race outcome, control of the Senate is a cliffhanger, with a slight edge going to the Democrats. That’s because most of the seats up this year (24 to 10) are Republican. The New York Times Upshot puts it at 58-42 Democrats. The 538 model says 65-35 Democrats, but Nate Silver admits “it’s basically a tossup.” Hypermind, the superforecaster futures market, puts the odds at 58-41 Democrats. Only eight states can be considered in play: Nevada, North Carolina, Florida, Indiana, Wisconsin, Pennsylvania, Florida, and Missouri. If these states split 4-4, the Senate is split 50-50 and VP Tim Kaine will give the Democrats the majority. The Republicans need to win at least five of these elections to keep the Senate in their hands.
For the GOP, retaining Senate control means first and foremost the ability to block—perhaps indefinitely—Clinton’s Supreme Court nominees. It also means a united GOP front in Congress, command of all the committees and most of the staff, and control of hearings and media. A GOP Senate would make it much more difficult for Clinton to isolate the GOP House leadership as opposing the will of the American people.
The GOP odds are enhanced by the public’s low opinion of both presidential candidates and its unwillingness to give free reign to either party. In this situation, according to the theory of “anticipatory balancing,” many voters become more likely to vote for one party in Congress once they sense that the other party will win the White House. There is some evidence of such balancing over past couple weeks. As Clinton’s poll support has raced ahead of Trump’s, the GOP odds in the Senate have actually improved slightly. Ironically, a sizable Trump defeat may be better the for Senate GOP leadership than a tight finish.
CONCILIATION, GRIDLOCK, OR CIVIL WAR?
So let’s say that on January 20, 2017, President Clinton is sworn in and that one or both houses of Congress remain in GOP hands. There are three basic governing scenarios. The first is Conciliation. The President and Congress reach a policy consensus on raising defense and infrastructure spending, patching up Obamacare, tax repatriation, immigration reform, and other basics. The second is Gridlock, which is what we saw in the second Obama term. Congress refuses to act on the President’s agenda, but leaves her pretty much free to do what she can through executive orders. The third is All-Out Civil War, with Congress assailing the White House with hearings, inquiries, subpoenas, law suits, even impeachment votes—and with POTUS responding in kind.
Impeachment? Yes. Representative Mo Brooks (R-MO) was probably the first to suggest it, but a growing chorus of conservatives have made the case that Clinton could be impeached immediately—not (yet) for her malfeasance as President, but for her behavior in earlier public roles such as Secretary of State that render her unfit for future office. Apparently there is some precedent for this. In any case, impeachment has no strict legal definition. It is a constitutional power (by the House to bring charges and by the Senate try them) whose extent is bounded only by the imagination and conscience of Congress itself.
Would the Senate ever vote by a two-thirds majority to remove her from office? Of course not. But the very fact that impeachment by the House is on the table lets us know how close we may be to the all-out civil war scenario. Donald is spending the last weeks of his campaign persuading his core supporters, maybe a third of the electorate, that Hillary’s election is illegitimate, “rigged,” and that she should be “locked up.” Meanwhile, Clinton herself will find herself unloved even by much of the public that voted for her. She has little depth of support from the left wing of her party (who would have vastly preferred Sanders)—and this denies her the fervent advocacy of partisans when the going gets tough.
In short order, a civil war of this sort could render America ungovernable at the national level. GOP leaders may fan the flames by pointing to Clinton’s “radical” and “lawless” policy agenda. But it is not Clinton’s strength that will touch off the conflict. It is Clinton’s weakness that will encourage her opponents to try going for the kill if only to cripple her authority.
Stay tuned. Next week in The Zeitgeist I will continue discussing the 2016 election outcome by taking on three further questions:
- Markets React: Relief Rally or Crash or Both
- Positioning for Tide of (Bipartisan) Populism
- The Coming Political Realignment
newswire
- According to How America Saves for College 2016, Millennial parents have saved more for their child’s college education ($20,155) than Xers ($12,428) and Boomers ($18,323). Although most Millennials are far from parenthood, it should come as no surprise that the generation that views education as the key to a successful career would want their children to have the same opportunities. (Sallie Mae)
- A new piece dives into the chaotic life of a bike courier in New York City, a profession that earns riders as much as $35 an hour. The rapid rise of delivery apps like Caviar and Deliv—as well as a surge in companies promising quick delivery—has created a fast-paced, (potentially) lucrative world for freelancers. (Eater)
- The last audience question at the town hall style presidential debate was an unusual one—both candidates were asked to “name one positive thing that you respect in one another.” While both Trump and Clinton responded appropriately, in classic polarizing Boomer fashion, both also emphasized how little they agreed with their opponent otherwise. (Fortune)
- YouTube and Instagram makeup artist James Charles, a 17-year-old high school student, just became the first male CoverGirl. The makeup company hopes that its gender-inclusive choice of spokesperson will appeal to Millennials, many of whom are already fans and followers of James on social media. (Advertising Age)
- A recent survey shows that Gen Xers are the most likely generation to be open to freelancing work agreements. While Millennials are interested in other kinds of flexible work arrangements that provide better work-life balance, they are more risk-averse than Xers, who are most willing to give up certain employer protections for the freedom of freelancing. (FlexJobs)
- Samsung has officially killed off its flagship Note 7 smartphone after many reports of both the original phones and replacement phones catching fire. While many saw this moment as Samsung’s turn in the spotlight following the underwhelming release of the iPhone7, this blunder cost them big-time—it looks like Apple will remain the industry leader for now. (CNN Money)
- Contributor Karen Weese offers up parenting tips on how to raise kinder, less-entitled kids. For young Homelanders, the growing emphasis on being empathetic and helpful individuals is a lesson taught not only in the classroom, but also at home. (The Washington Post)
- A recent survey shows that although most Millennials are comfortable with their own tax burden, they are concerned about general fairness in the tax system. While their opinions about how much the lower class should pay are split along party lines, fully 70% of Millennials believe that the upper class pays too little in taxes. (EY and EIG)
- A new company called “PTO (paid time off) Exchange” allows workers to trade unused time off for various prizes. While today’s office culture inspired by workaholic Boomer managers has led to millions of unused vacation days nationwide, some say a service like this may only incentivize workers to continue foregoing vacations, personal days, and sick days. (Bloomberg Business)
- In the aftermath of Chipotle’s food contamination scares, the chain is reaching out to young people with a weekly variety show on Snapchat called “School of Guac.” Sales plummeted in the first half of 2016, and ever since, Chipotle has been experimenting on Snapchat hoping to win back Millennials and return to the top of the fast-casual market. (Digiday)
Did You Know?
Keep Your Hand-Me-Downs. Downsizing Boomers face a predicament: figuring out what to do with the stuff that filled their vast McMansions. As we’ve noted before (see: “What’s in Store for Moving and Storage?”), some are making full use of self-storage facilities. Others who want their goods to be enjoyed are passing them along to their kids. The problem? Many Millennial children don’t want their parents’ stuff. Some, like 25-year-old Leah Riccio, simply don’t have the space for family heirlooms: “[W]here I am right now [I’m] just trying to keep things tight and not have too many things that will clutter up my tiny apartment.” Downsizing expert Jamie Shaner says that oftentimes, Millennials’ lifestyles just don’t mesh with their parents’ tastes: “[Millennials are] not going for the place setting of 12 with all the four different sizes of stemware to go with it. You can pour wine in any shape of glass and call it dinner.”
The (Millennial) Picture of Health. According to the latest Gallup-Healthways Well-Being Index, U.S. health trends have worsened from 2008 to 2015. Overall obesity and diabetes rates now top 28 percent and 11 percent, respectively. Meanwhile, the share of American adults who report significant daily stress has increased to 40 percent. A hard look at this data, however, reveals some bright spots—namely, Millennials’ positive health trends. Obesity rates fell to 20.1 percent for Millennials (defined as 19- to 35-year-olds)—a share that rose to 32.5 percent for non-Millennials (age 36 and over). Diabetes rates also decreased to 2.4 percent for Millennials—compared to an increase to 14.4 percent for non-Millennials. Millennials also accounted for the largest surge in exercise rates. As young adults continue to buck negative health trends and fuel positive ones, it will lighten the load on a health care system that will become increasingly dominated by ailing and aging Boomers in the coming years.
