For someone well-versed in the follies of forecasting (working as a professional money manager), even I am stunned at the accuracy of my January 2017 op-ed laying out the case for a two-term Trump presidency. I outlined three pillars and three risks: Trump’s base will never leave him, his economic agenda is a gigantic ball of economic stimulus (“It’s the economy, stupid”), and Never Trumper moral hysteria sets the expectations bar exceedingly low for voters in 2020; while Twitter, and the chaos that it represents, China, and the business cycle represent the biggest risks to his re-election.
Trump’s base is as strong as ever, if not strengthening (see here), as he is doing precisely what he campaigned on (go back and watch his opening campaign speech here); his highly aggressive deregulation and tax cut & reform push, and deficit spending represents massive fiscal stimulus; and he has lit the Mainstream Media on fire, to the point where 2016 Republican write-in voters will not only vote for him in 2020 but are looking forward to it (trust me, I am related to them).
The biggest upside surprise to the Trump presidency is his foreign policy. His “peace thru strength” worldview is quite good, as it strikes a good balance between leading on the world stage (no, questioning NATO partners paying their fair share is not burning down the American-made global liberal order; and yes, leading on North Korea is quite literally the definition of reasserting America’s leadership role in the world…from Obama) and not jamming democracy down other countries’ throats. So in my opinion, the risk to his presidency from botched handling of China (I cited trade, South China Sea, and North Korea as China-related risks) is off the table, no matter how negotiations go from here with North Korea.
The chaos, which I personally love, has turned out to be a far greater risk (I think) than I anticipated. (I say “I think” because I could be letting the Mainstream Media get into my head a bit, because he is neatly ticking off every single item from his opening campaign speech, which should be all that matters to voters.) The risk is not to the Republican side (the Jeff Flake Flakes are few and far between), but the Independents. But because a lot of the criticism of him on the Independent side is, by definition, form over substance, I am not sure how much this matters for 2020 for business-oriented Independents. In the various special elections, and especially the Virginia elections last November, it appears a “Blue Wave” is forming, led by hyperventilating Never Trumpers that want to send Trump a message. But these folks were never up for grabs in 2020, IMO. I walk thru some math later, but I am still at a toss-up with regard to how much the chaos matters.
Since I wrote that op-ed last January an additional risk has emerged in the form of Trump/Russia collusion. My stance on this risk has evolved, as I was very negative on it last summer/early fall, but have since come around to the fact the water is so muddied that once Mueller officially reports on Trump/Russia collusion Trump should be politically fine. For example, BJ Clinton meeting Loretta Lynch on the tarmac 30 seconds before she had to rule on the Clinton investigation is the stuff of House of Cards. They’re all dirty, and Trump is no different – though perhaps less so.
By far the biggest risk to a two-term Trump presidency is the business cycle. His economic stimulus in conjunction with a synchronized global economic expansion has extended the business cycle. And there is even a case to be made that the Great Recession distorted the business cycle to the point normal measurement(s) of a “cycle” are not applicable until the next major recession hits. For example, private investment in the US as a percentage of GDP (housing, for example) continues to languish at recessionary levels; and with real interest rates far from levels that choke off economic growth, this expansion could continue well into the next decade. But on the flip-side, if this cycle is not “different this time,” then we are nearing the end stages and a recession could land right around the 2020 election. Evidence supporting this scenario is the fact that, per Ned Davis Research, almost 70 percent of countries around the world are currently growing at “above potential” rates of GDP growth, a level hit just prior to the 2000-2002 and 2008 recessions.
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The above is all well and good from a high level analysis perspective, but let’s walk thru some electoral mathematical support for the two-term thesis.
Generic ballot polling and anecdotal evidence suggests an anti-Trump Blue Wave will “wash” over the GOP’s House majority in November, perhaps at a 2010 Tea Party-like scale. This result will be widely interpreted as evidence that anti-Trump enthusiasm is strong enough to take him out in 2020. The thinking is two-fold: first, 2016 turnout on the Democratic side was depressed as a result of Clinton’s unpopularity, as well as complacency by establishment Democrats who did not believe it was possible for her to lose; second, Trump will remain as unpopular with Republicans in 2020 as he was in 2016, thus all it will take to beat him 2020 is running a “normal” candidate such as Joe Biden. I believe this line of thinking is a mistake.
As I mentioned in the first section, the folks driving the anti-Trump wave did not vote for him in 2016 and were never up for grabs in 2020. Their enthusiasm is largely irrelevant, because despite seemingly unending chaos Trump has stepped over the “exceedingly low expectations bar” for 2016 Republican write-in voters. Yes, Never Trumper hyperventilation actually matters, and Trump has done a brilliant job of setting the trap. The dirty little secret is that the write-in vote was enormous on both sides in 2016. Trump will get Romney-like turnout on the Republican side in 2020, thus his entire re-election hinges on retaining and/or expanding his share of Obama voters.
In 2016, roughly 13 percent of Obama voters went Trump. These folks are not swing voters – they are part of his base. They are going nowhere. And they represent the picture-perfect irony of Hillary Clinton’s “Basket of Deplorables” commentary, as they are the exact voters that made up the Democratic base of yore. But critically, these Obama-Trump voters will not vote for “generic” Republicans this November, especially with Trump-like candidates such as Conor Lamb of Pennsylvania, and Adam Cote here in Maine, on the ticket.
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Lastly, I believe the case for a Trump blow-out in 2020 is finally beginning to emerge. (I say “finally” because I have thought it possible from the beginning, but the thesis is a “show me” story, so hard evidence was required before actually discussing.) Per The New York Times, Silicon Valley is beginning to warm to Trump’s pro-growth/jobs/business agenda. This is a “big league” problem for the political Left, as Silicon Valley represents the beating heart of the anti-Trump “Resistance”.
This leads me to believe that the Independent vote is not nearly as at risk from the chaos as the Mainstream Media portrays it to be. Anti-Trump fury will be enough to take down an already historically vulnerable GOP House majority, but Trump himself should be good in 2020.