The Politics of Bad Timing - “The Sunday Political Brunch” - July 12, 2020

Sunday, July 12, 2020

Mark Curtis, MINDSETTER™

 

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George W. Bush PHOTO: U.S. Government NARA

In the world of finance and investing you often hear advisors say, “You can’t time the markets!” It’s true. As much as you try to anticipate the highs and the lows, and act accordingly, it’s just an educated guess. And we all know even the most informed guess, can depart far from reality. The same rules apply in politics. Let’s “brunch” on that this week.

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“Trump’s Troubles” – The incumbent president is in serious political trouble, but is there still time to pull out a reelection victory? It depends. While health fears are out there and the economy has tanked, there are a couple of bright spots that need to turn into a trend. Monthly jobless numbers are announced the first Friday of every month. The numbers for June and July were back up, showing millions of jobs created, and unemployment dropping from 16 to 11 percent. That’s still too high, but Trump still has August, September and October to gain any measurable rebound.

“Market Musings” – The financial markets also must bounce back and be trending upward or Trump is toast. The worst day this year was March 22, when the Dow Jones was down 35 percent. It has recovered and is now down 5.43 percent for the year. The S&P 500 dropped 31 percent on mid-March but is now off just 1.26 percent. The tech-focused Nasdaq was down 23 percent but is back in positive territory at 11.68 percent. That’s a start, but with people’s retirement investments on the line, the trends still must rise significantly for Trump’s reelection. The economy was his strongest asset before Covid-19 hit, and we know the state of the economy is the number one key in U.S. elections.

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“Why Timing Matters?” – On November 4, 1979, Iranian rebels stormed the U.S. Embassy in Tehran talking 52 American hostage and held them for more 14 months, including on Election Day in 1980. Was it President Jimmy Carter’s fault? No, but he paid the price. Yes, the U.S. had been embarrassed on foreign soil, but the main reason Carter lost was the horrible U.S. economy, which by many yardsticks was far worse than today.

“It Cuts Both Ways” – Timing affects both parties, and again, there’s no way either can control the cyclical nature of the ups and downs. When President George H.W. Bush was in office the nation dipped into a recession in July 1990 and came out of it by March 1991. But the recovery was slow, and most people didn’t feel it right away (which is common). Democrat Bill Clinton seized on the sputtering economy with a campaign slogan of, “It’s the economy stupid!” That focus carried him to victory in November 1992.

“Poor George” – The break-in at the Democratic National Committee offices at the Watergate in Washington, D.C. occurred on June 17, 1972. By August 1972, President Nixon was declaring publicly that no one connected to the White House staff was responsible. While people had their suspicions, little concrete evidence came to light until after Election Day 1972, and Nixon was reelected. Of course, not long after that, we did learn of White House involvement and hush-money payments to the burglars in a cover-up attempt. Had all that come out before the 1972 election, Senator George McGovern, (D) South Dakota, might very well have been elected president. Like the others mentioned here, he was the victim of bad timing.

“Covid-19, 2020 and Beyond” – As of Friday 44 states had reported a spike in new cases. Is this the second wave? Actually, the doctors I’ve spoken with say no, this is more a reflection of people letting their guards down as things improved. They call this a spike or a surge, but their real concerns for a second wave are centered on fall, when school returns along with football and other contact sports. If the most recent uptick in Covid-19 is not trending downward by mid-August, school and extracurriculars may be cancelled again. The Covid-19 situation probably needs to stabilize, and perhaps even be trending downward by mid-September, (and not have a Labor Day weekend spike), for Trump to win.

“What Say the Polls?” – An ABC News/Ipsos poll released Friday show that 67 percent of Americans disapprove of President Trump’s handling of the Coronavirus pandemic. In March, 55 percent of Americans approved of his handling, so he’s taken a hit. Naturally most Republicans believe he’s done a good job, and most Democrats don’t. The most worrisome number for the president’s reelection bid is that 73 percent of people registered as independents, believes he’s not handling the crisis well. In the modern political era, independents are how you get the keys to the White House.

“The Biden Balance” – I should point out here, that not all the variables hurt Trump at this point. Joe Biden can criticize all he wants but if the trend turns good on the economy and on Coronavirus, the person in charge may very well get the credit (whether it’s deserved or not). For example, incumbent presidents get a boost from a rising economy, even though their policies may have very little to do with why things are booming. In short, if things are going well you get the credit, or if they tank, you get the blame. It may not be fair, but that’s how politics works. Biden, who struggled in many of the Democratic Primary debates, maybe hurt if he has poor debate performances with Trump. We’ll see.

How has President Trump handled COVID-19 and the economic fallout? Email here.

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Mark Curtis, Ed.D., is Chief Political Reporter for the five Nexstar Media TV stations serving West Virginia, its five neighboring states and most of the Washington, D.C. media market. 

 

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