A Democrat Party loss in the 2018 midterms would be: loss of seats in the Senate, and failure to take the House. With the Real Clear Politics Generic Ballot currently sitting at D+6, the headline odds point to a Democrat “victory” – call it 75 percent (i.e. 25 percent chance of “loss”). Looking at the weight of the evidence, I believe this is wrong, and would place a paper bet on the chance of a loss, as defined above, rising from 25 percent to at least 50 percent by early November.
The weight of the evidence looks as follows:
“It’s the economy, stupid” | Much to Never Trumper chagrin, the potent combination of large-scale deregulation, tax reform, and fiscal stimulus has jump-started the domestic economy. In a political climate where gender pronouns are placed on par with economic growth, it is easy for this fact to get drowned out; but economic strength is highly likely to feed thru to the second piece of evidence…
Stock Market All-Time Highs | I have a bit of an unfair advantage working in the investment industry, but the stock market is currently positioned to take out its all-time highs between now and early November. Absolutely nothing in life is guaranteed, particularly in the stock market – but the weight of the evidence points decisively in this direction.
As the stock market took off in the wake of tax reform passage in December, the Generic Ballot spread collapsed from D+13 in December to D+7 in late January. The stock market fell by more than 10 percent in February, and the spread widened out again to D+9. The market has since stabilized, and the spread is back to D+6. Democrats should be scared.
Again, nothing is guaranteed, but I would put big money on the Generic Ballot spread collapsing to close to zero if and when the stock market hits a new all-time high.
Basket Of Deplorables | Democrats still do not get it. As outlined in The New York Times yesterday, the political Left continues to paint Trump’s entire base as a giant basket of deplorables, while ignorantly forgetting the hysterical fact that a good chunk of this “basket” swept the Political Almighty, former President Obama, into office. The money quote (my emphasis):
“The result is that marketers are now making concerted efforts to learn more about Americans who live outside New York and California. HP’s recent research on marketing and political identity included visits to the swing-state cities of Cincinnati and Detroit. Late last year, the ad agency Y&R, using a division of the firm that had previously overseen cultural immersion projects in Myanmar and Ecuador, deployed strategists to immerse themselves in cities like Indianapolis and Milwaukee, Wis.”
Kanye West | It is highly likely that Kanye West just handed the Democrats a loss in November by ripping the Band-Aid off of hidden Trump support. The probability of this is supported by the shocking reaction by those on the Left, proving in real time that policy no longer matters for the current form of the Democrat Party.
President Trump | Despite an endless stream of seemingly negative headlines, Trump’s RCP approval rating continues to climb. With a strong economy and the Democrats grossly overplaying their hand with the Mueller investigation, this is not a surprise. As I outlined in a recent op-ed, the water is sufficiently muddied by Democrats overplaying their hand for impeachment to be a slam-dunk result from an official collusion charge.
* * *
Adding it all up, I believe the weight of the evidence points to a Democrat Party “loss” in November.