Election Handicapping

Throughout the course of my voting career, I've cast my ballot for Democrats, Republicans, Independents, and Libertarians.  I offer this since I'm an Independent voter who's never registered with any party.  Privately, I've handicapped presidential election outcomes with a high degree of success.  When 2016 rolled around, I hesitated since we had a unique situation in American politics — no incumbent president or vice president was on the ballot.  While the same thing occurred in 2008, this condition was the exception rather than the rule going back through most of the 20th century.

Given the absence of incumbency, the 2016 election opened the field to candidates who had 3rd party characteristics about them.  In other words, they did not bear any allegiance to the GOP or Democrats.  For 2016, candidates embodying this were Dr. Carson, Sanders, and Trump.  The seeds to these candidacies were sown many years before, perhaps as early as 2000, though certainly in the Global Financial Crisis aftermath.  Here's what I wrote in Escaping Oz: Protecting your wealth during the financial crisis in 2010, and its successor, about potential third parties emerging,

Overall, there is a groundswell of discontent without party affiliation with the Tea Party receiving the most attention.  To consider them an organized political party at this point is premature.....While the Tea Party itself may not become an organized political party, it may serve as the basis for a viable third party in the United States.

The third party did not emerge, but candidates that fit within a third party mold did.  With respect to the 2016 candidates, there were two that reflected the country's anger.  Neither of these candidates attacked capitalism or democracy but they did focus on globalization.  Globalization is a way to engender populism and nationalism by finding a common source for voters' ire.  I speak of Sanders and Trump.  When the 2016 election concluded, I told friends and family that Sanders' message would live and his voice, and those like him, would become more prominent in American politics.  

Progressive Movement

While Sanders calls himself a democratic-socialist, objectively, he's not anti-capitalist, at least the way most Americans understand capitalism and socialism.  In Escaping Oz: An Observer's Reflections, I outlined the elevated degree of government involvement in private enterprise, particularly health care.  Real capitalism is in crisis, which is one reason Trump and Sanders have flourished.  

A year ago, I penned an essay about how the next president would sound, and it rhymed with Progressive.  This is why two of the finalists for the Democratic Party nomination are progressive, Sanders and Warren.  When the media displays their poll numbers, I add them and consider them one candidacy.  You could further add Jerry Yang and Mayor Pete to the Progressive mix.  The fight for the Democratic Party is on full display — it's the old versus the new.  That's why Democrats were elated when Mayor Bloomberg entered the race to "rescue" moderates from a fledgling Biden campaign. 

2016 - What Might Have Been

It's ironic to think about 2016 with Joe Biden running as an incumbent against Donald Trump.  Today, we might be talking about President Biden running against some Republican.  Then Vice President Biden, decided against running due to his son's passing.  That window was his best opportunity to be president.  I never sensed great enthusiasm from him in this election and the electorate senses that as well.  Perhaps his compulsion for running was strictly motivated by his dislike for the 45th president.  The utter lack of support from President Obama, someone who he served for eight years, remains a head scratcher.  Perhaps the former president sensed Biden's lack of enthusiasm and/or dissuaded him from pursing the office?

Had the DNC shenanigans not occurred in 2016, you might well have seen a Sanders v. Trump election.  GOP strategist, Karl Rove, suggested that many Sanders supporters stayed home in 2016.  How many disaffected Democrats (Sanders supporters) either refrained from voting or voted for Trump?  Would that have tilted the election?

In California, as Blue of a state as exists, there were 700,000 more votes cast for Prop 64 - Marijuana Legalization than the combined votes of Trump and Clinton.  Even Prop 60 - Adult Film Condom Requirements tallied more votes than the presidential candidates.  While these are fun facts to cite, it does express a certain amount of voter apathy.  But in a largely Democratic state, perhaps many of those 700,000 votes were Democrats who didn't want to vote for their candidate.  It stands to reason the same dynamic could have existed elsewhere, thus diminishing Democratic presidential votes in key states.

Sanders & Trump

The parallels between Sanders and Trump are evident.  They're not loved within their adopted parties.  Remember the "Never Trump" movement in 2016? The former DNC chair admitted her party disadvantaged Sanders in 2016.  The "Never Bernie" movement is blatantly obvious today, even within the mainstream media channels traditionally supporting Democratic candidates. 

Both men have an America first message, neither is a fan of foreign entanglements.  Both men do what they say they're gonna do.  Neither is afraid to speak candidly.  Trump has kept to his agenda/policy and I have no doubt Sanders would do the same — these guys won't flip-flop.  Both men are by far the most energetic candidates in their party (Trump in 2016 and Sanders in 2020). 

Sanders and Trump have argued that the system is rigged, special interest influence needs purging, and both represent themselves as champions of the working class.  Neither man is a fan of the establishment and favors swamp draining.  While Trump and Sanders supporters will bristle at this comparison, if they consider the electorate's mood and my comments on third party candidates, they might give it consideration.  

2020 Election

At the time of this writing, the Democrats have completed four primaries with Sanders the presumptive leader entering Super Tuesday.  The Democrat candidates will unify behind their eventual nominee if there's someone with a clear path before their convention.  A contested convention, especially if Sanders is not the nominee, could produce something like the novel, 2020, where there are multiple parties running for president in 2024.  

What would it take for a Democrat to win this year?  We know that in 2016, the Democratic challenger polled 3 million more votes nationally than President Trump.  The media likes to show national polls where most of the Democratic field has a lead over President Trump.  Presidential elections are not national affairs, but rather a collection of 50 separate races (51 with the District of Columbia).  The table below illustrates a few key states whose margin of victory for the winning candidate was razor thin.

If Democrats retake MI, PA, and WI and every other state votes as they did in 2016, the Republicans (Trump) tally 260 Electoral College votes and the Democratic nominee would have 278, victory for the Democrats.  If Dems retake MI and PA, the GOP barely wins 270-268.  If the remaining 47 states and D.C. vote the same way in 2020, MI, PA, and WI will be focus areas for Democrats.  The margin for Dems was quite small in NV and NH so if they were to somehow regain MI, PA, and WI but lose NV and NH, the GOP barely wins again 270-268.  

The question then becomes, can Dems hold NV and NH and capture less than 100,000 votes in those three other states?  Strategists in both parties will focus their attention in a limited number of states given the otherwise clear state-by-state party divisions.

Cult of Personality

The other aspect about this election is how personal it is.  There is a visceral hatred towards the 45th president expressed by Democrats and some Republicans — it's personal.  This race is not just about policy, it's about personality.  The 2016 election featured candidates that were loathed by the opposition yet the loathing is greater this time.

If Sanders is the nominee, the opposition won't loathe him like they did Clinton in 2016.  They will attack him on policy and portray him as a socialist, but he doesn't carry Secretary Clinton's baggage.  He doesn't have an extensive legislative portfolio to criticize and he won't face castigation about policies he supported.  His Achilles Heel might be old videos where he discusses Castro's Cuba and his honeymoon in Moscow.  Right or wrong, many Americans will not care about that, they'll care more about what he can do for them.

Like Trump, he'll be a candidate of the people, a populist.  

Socialism & Capitalism

If a Progressive-minded candidate emerges as the Democratic nominee, we'll no doubt hear comparisons of Socialism vs. Capitalism.  According to Merriam-Webster and the Dictionary of Finance & Investment Terms, Socialism is:

Socialism - collective or governmental ownership and administration of the means of production and distribution of goods; the means of production and distribution of goods is owned by a collective or government.

I've argued in my writing that the nation has drifted towards "isms" and away from economic liberty present at our nation's founding.  This drift was evident through both GOP and Democratic administrations and Congresses.  A few seminal events assisted the drift:

• Federal Reserve Act
• Income Tax
• Vast expansion of government programs during the FDR administration
• Social programs enacted during the Johnson administration
• Nixon's decoupling the United States from the Bretton Woods agreement

Nixon's action fifty years ago removed any checks to fiscal sanity and accelerated the drift.  Read the Socialism definition and overlay it on these five historical events.  The nation's funded debt is north of $22 trillion and its unfunded liabilities are multiples of that.  What do this debt and liabilities represent?  They represent a covenant between government and its people to provide social programs now and in the future.  Clearly, that covenant has been stretched financially to mythical proportions.  

The financial obligations also represent governmental administration of the distribution of goods (services).  Government spending, which in the last and current fiscal year exceeds its revenues by more than a trillion dollars per year, in what is statistically a strong economy, represents production and distribution of goods and services.  While government doesn't own the means, they certainly have control, influence, and financing.  Voters need to understand the vast control the U.S. government already exerts on the economy.  While this is not socialism in its purest sense, it's not capitalism either.  In fact, we've created a capitalism crisis, which is why there's been an embrace of socialism.

Financial Crisis

My thesis around the emergence of third parties or third party candidates centers on the intersection of politics and economics.  In the late 1990s, a fund named Long Term Capital Management almost took down the financial system.  Banks came to the rescue.  In 2008, Lehman Brothers and other events precipitated the Global Financial Crisis (GFC).  The Federal Reserve wizards and government came to the rescue of banks. Congress authorized a $700 billion rescue package.  Then the Fed undertook a series of financial injections through various Quantitative Easing (QE) programs.  Recently, the Fed has come to the rescue once again, to the tune of billions, in what is probably one of the more under-reported stories in recent years. The patient is currently running a fever but few understand the implications.  All these instances are financial bailouts of banks or Wall Street entities.

Our financial system has a very limited factor of safety due to risks created by massive interference in the financial markets and economy.  Once again, this is not capitalism.  The problem now is that many individuals and institutions rely on the  Fed wizards to keep the casino open.  During the climactic moments of the next financial crisis, the people will demand a bailout for Main Street.  

QE for the People

That's when the Progressive agenda will take off.  It will be difficult for politicians to tell their constituents that another bailout of Wall Street or a Systemically Important Financial Institution (SIFI) (i.e.) big banks, is the answer.  Politicians on both sides of the aisle gave the Progressives all the ammunition they needed via a perpetuation of crony capitalism.  The electorate won't care if you call it capitalism or socialism or democratic-socialism — they'll want their bailout.  Thus, when you hear about Medicare for All, student debt jubilees, free college, and universal basic income, that's the people's bailout or QE for the people.  Add infrastructure spending and you complete the Progressive agenda.

But here's something you won't hear from the media.  Even if there's a Republican in office during the financial crisis, you'll get many of the same programs.  Why?  It will be difficult to stare voters in the face and tell them about another bank or Wall Street bailout. 

If you ask how it's possible for a government so heavily indebted to afford these programs, the answer will be Modern Monetary Theory (MMT).  MMT posits that as long as a government can print its own currency, it need not worry about debt, since it can simply print more.  Inflation you ask?  MMT advocates tweaking the tax code to flexibly collect more or fewer taxes.  MMT defenders will point to Japan as a "successful" example of big debt, success being defined as an economy that didn't collapse and neither did the its currency, the Yen.  This is not an endorsement of MMT, rather what you'll hear when it's proposed.

MMT will likely be heralded as a success.  Its messy aftermath will usher in a new financial order that will see the Dollar in a diminished international position.

Who Wins?

If you place credence in national polls, the top Democratic contenders all beat President Trump.  As mentioned earlier, elections are not national events, but rather a series of state events.  Paradoxically, the Democrats are working feverishly to ensure a Progressive is not at the top of their ticket despite polls suggesting they can win with such a candidate. 

Some within the Democratic Party believe Trump will have the upper hand come November.  Certainly the GOP believes Trump will win easily with some pundits speculating that there could be a blowout similar to Nixon v. McGovern or Reagan V. Mondale.  

Sanders believes that a larger number of people casting ballots in November favors Democrats.  Consider the following:

1. How many Democrats that voted for Clinton in 2016 will cross the aisle and vote for Trump?
2. Given how personal this election is, will Democrats or those Independents loathing the president not vote for Sanders if he's the nominee?
3. How many Republicans who voted for Trump in 2016 cross the aisles and vote Democrat?
4. Are Independents the key to the election?

I don't know the answer the question #1, though I suspect it's a low number.  Both Republicans and Democrats have moved further towards their party since 2016.  On question #2, I have a difficult time envisioning Democrats staying home.  The answer for question #3 is the same as #1, voters are entrenched.  Question #4 is key.  In 2016, Trump polled slightly higher among Independents.  

The betting public (PredictIt.org) believes Bernie is the overwhelming favorite to win the Democratic nomination.  President Trump enjoys a decisive lead over Bernie in the general election. 

Incumbency carries its advantages.  Since WWII, only three presidents lost as incumbents, nine won.  Ford lost in 1976 though he was in a unique circumstance of never being elected to the office.  In the case of Carter and Bush 41, the public perceived the economy as being in trouble.  While a good economy serves as a positive harbinger for an incumbent, it will be less so this time due to emotion expressed by the opposition — it's personal.

It's still too early to predict a winner.  In the previous election, 40% of the electorate made up their minds after September.  For those that had already made up their mind, Clinton out-polled Trump.  Trump had an advantage for those deciding after September.  Don't count out Bernie.  Trump is one economic wobble away from the Progressive agenda receiving a boost.  If people are more entrenched this election, perhaps a higher number make their decision before September?

The nation is undergoing a dynamic change due to a convergence of cycles: social, political, demographic, and economic.  Whether a Progressive wins in November, their voice will be heard in this election and the next.  If the election is Sanders v. Trump, it should make for great theater!