This is the time of year that pundits of all stripes make their predictions for 2020. I used to do so as well but abandoned the practice as meaningless. Not that my accuracy was bad—I typically ran about 85%—it’s more that picking the big news for the coming year is extremely difficult. I’d get sure things right but the most important events frequently come from out of the blue.
I found Stephen L. Carter’s predictions at Bloomberg for 2020 interesting and, probably, mostly correct but I am skeptical about this, his fifteenth and last prediction for the year:
In the presidential election, the Democrats will flip Arizona, Pennsylvania, and Wisconsin but the Republicans will flip New Hampshire. The result will be a tie in the electoral college. Under Article II, section 1, of the Constitution, the choice must then be made by the House of Representatives. Democrats cheer the perspicacity of the Framers until they realize that when the House sits to break an electoral tie, each state gets one vote. At that point Democrats remember that the Framers were white supremacists trying to protect slavery, and that the opinions of such monsters should play no role in contemporary governance.
The 26 states that have a majority red House delegation will vote Republican; the 22 states that have a majority blue delegation vote Democratic. The other two states, where the delegations are divided, will cast no vote, resulting in another tie.
The issue will be thrown to the courts. A letter signed by several hundred law professors will argue that all judges and justices appointed by President Donald Trump should recuse themselves, as they are likely to be biased. Television commentators will take up the cry. Conservative bloggers will reply that the argument is “another†attempted coup d’état.
Before the courts can rule, the political parties will agree to hold a new presidential election in February of 2021. Under the agreement, Trump will remains in office until that time but can take no action without the concurrence of Congress. Lawsuits will immediately be filed to block the plan, including by Trump himself, who will claim that not having been defeated in the election, he should win by default.
I will bet a shiny new dime that this prediction will be wrong in whole or in some particular. Heck, I’ll even give odds.
Strange prediction. The only part I agree with is the possibility of the Dems flipping AZ.
The enemy of prediction is specificity.
This scenario is pretty interesting though, even if it’s extremely unlikely.
Dont think it was a serious prediction, just having fun with the oddities of an election system designed over 200 years ago.
Steve
I don’t know why the House vote results in a tie if 26 states vote for the Republican. That would be a majority of 50.
That baffled me as well. Either his arithmetic is wrong or he sees something that I don’t.
It seems like he would need to add more facts. For example:
While the Florida delegation is majority Republican (14R to 13D), one Republican delegate refuses to vote for Trump, meaning that Florida is unable to cast a vote. That leaves Trump with only 25 votes, one short of a majority.
The other issue might be that the House chooses from the top three electoral vote candidates. In 2016, Colin Powell got three electoral votes from faithless electors. Could a third candidate win, or prevent the House from reaching a consensus? Would the issue of faithless electors get litigated?
I have a better chance of being elected President than this scenario happening. In addition the author failed math.
What he is implying that the Democrats will shred and burn the Constitution to achieve victory. Considering the current shampeachment situation I don’t think he’s wrong, but it won’t go this particular route. If Trump wins in a repeat of 2016, the electoral college is illegitimate. If he wins the popular vote too, it will be due to voter suppression and thus illegitimate. If he wins in a Nixonian 1972 landslide, massive voter suppression will be the cry. Right now it seems the Democrats will not accept any election results if they are not in their favor. Stacy Abrams was a foretaste of what is to come.
It’s amazing how everything circles back to Trump, in a negative way. Cuomo blames recent anti-Semitic attacks on him. Any positive stat seems to have arisen from the ashes of the Obama presidency, rather than from the deregulation, tax cuts and job creation under Trump. Any support for him is attributed to an unworthy base. Should Trump win in 2020, such a win will be discredited with an instant backlash initiated by the resistance. It doesn’t feel like a fair political playing field anymore.
” Any positive stat seems to have arisen from the ashes of the Obama presidency, rather than from the deregulation, tax cuts and job creation under Trump.”
Some of us look at the numbers and dont just take Trump’s word. You believe Trump when he says we have had massive GDP growth. The actual numbers show pretty modest growth, at the cost of an increase in the deficit/debt. We haven’t seen the increase in business investment you would expect if growth is going to be maintained, so one would expect, like we are seeing, that the spike in growth is short lived.
Now, in this case, it may be unfair to ascribe this to your feelings about Trump since conservatives really dont care about deficits unless a Democrat is president.
Steve
“You believe Trump when he says we have had massive GDP growth. “
I never said he had “massive” GDP growth. Yes, in the beginning it was in the 3’s, but with the government shut down, the auto strike and the uncertainty of tariffs, growth has been more modest, while entrepreneurial spirits continue to be boosted by rapid deregulation that occurred right away. What was also remarkable has been the job growth under this president (7 million jobs), small business optimism, better wages(especially for the lower 25% of the workforce), millions off of food stamps, return of some manufacturing jobs (which Obama said would only occur with a magic wand). The economists I’ve heard (not necessarily Trump fans) are also backing away from recession talks, and seem to think there will be greater growth achieved in 2020 if the phase one of the China deal is solidified in the coming year. However, if the dems win the election, all bets are off on that possibility.
As for all the deficit spending, I think it’s a cloud over our future. All it will take is a ticking up of interest rates, making the debt even more onerous and felt by the public. However, no matter how much revenue the feds receive, the dems seem to usurp extra funding, adding increases to social programs or wanting more of them in place in order to pass a bipartisan budget. The last couple of budgets have also been front loaded with greater military expenditures, catching up for their funding losses experienced under the sequestration years of Obama.
Perhaps by the 15th prediction most of the bottle of Jack had been consumed.
” Yes, in the beginning it was in the 3’s,”
And yet you persist. It was never 3% for a whole year. Yes, for individual months, but then Obama had that also. And, if you have a big splurge in govt spending/tax cuts a temporary increase is the expected effect. If it caused permanent effects or the deregulation was accomplishing anything we would expect those other numbers to change. They mostly haven’t.
“(7 million jobs)” Yes, Trump is increasing jobs at about the same rate as Obama did. (Actually, the POTUS gets too much credit and blame, but this is the game being played.) If Trump is so much superior, shouldn’t we expect faster growth?
Manufacturing jobs? They have been up a bit (it started increasing in 2011), but as a percentage of overall employment they continue to drop. Plus, more of those jobs are now contract jobs that dont pay that well.
https://fas.org/sgp/crs/misc/R41898.pdf
I could, if I had the time and cared enough to keep going on. But, it wouldn’t change your mind. Research has shown that when conservatives (maybe liberals too?) are faced with facts that contradict their beliefs they just dig in further to their belief system. For my part I would say that Trump has done OK. The expansion has continued under his rule (correct word choice). However, it hasn’t been as great as he claims and a lot of it started well before ehe came into office.
Steve
My take is we’ve finished filling the grave of “Gracious Loser”and about to don dancing shoes.
Steve, you take my words and then spin them to fit them into a negative narrative.
I didn’t say the 3% was an annual rate….but, it was close to it. In the meantime, Obama’s recovery was the worst since 1949. Remember the “summer of recovery†that never happened – this after being allocated almost half of the 2008 TARP funding, plus the huge stimulus that was supposed to go to “shovel-ready jobs,†but instead went into the hands of those who supported Obama, like the guy starting up Solyndra. Yes, a sizable number of jobs came on line for Obama, following the slew of lay-offs after the 2008 crash. But, the 8-year Obama economy, as a whole, was tepid, not growing, while consumer sentiment, small business start-ups, people’s sense of where the country was going were all depressed.
IMO, despite all the financial assistance given the Obama Administration, it was neutralized by the pile-on of regulations, anti-business environment created during his presidency, and the partisan passage of a controversial health care bill that dominated the initial years of his presidency. Also, despite the flow of good will infusing Obama’s election – the first black president – by the majority of voters, he squandered it by being so divisive in his prejudicial commentaries regarding race, class, gender, cultural differences. Being a bi-racial President was such a golden opportunity to have minimized rather than maximized such differences.
Furthermore, Trump came into his presidency with said divisiveness at an all time high, the former president staying in town to support a counter movement against him (first president to do so since Woodrow Wilson), counter intelligent schemes in place, full resistance employed in all government departments to disable him from putting his own people in place. Consequently, Trump has been having to deal with a boulder of difficulties from day one, and yet was still able to eke out a few accomplishments, and lift the economy up rather than run it into the ground. That’s pretty amazing IMO.
“IMO, despite all the financial assistance given the Obama Administration, it was neutralized by the pile-on of regulations, anti-business environment created during his presidency, and the partisan passage of a controversial health care bill that dominated the initial years of his presidency.”
So why didnt it get all better when Trump deregulated and is supposedly pro-business? Business investment is not increasing. We had a small increase in GDP, about what one would expect from deficit spending.
” In the meantime, Obama’s recovery was the worst since 1949.”
Couple of guys wrote a book on this. What are recoveries like after an international banking crisis? Have prior recoveries been gradually getting slower? How was our recovery compared with that of the European countries hit by the banking crisis?
” But, the 8-year Obama economy, as a whole, was tepid, not growing”
Again, what do the numbers say, not your feelings. Job growth with Obama and Trump are about the same. If it was tepid with Obama it is tepid with Trump, but you just like Trump better. GDP growth is slightly better but at the cost of the deficit. Also, the positive effect of the tax cut is waning and we are still pretty close to the date when it started. Not seeing a big change.
” this after being allocated almost half of the 2008 TARP funding, plus the huge stimulus that was supposed to go to “shovel-ready jobs,—
Are you objecting to stimulus packages in general? Kind of odd since you certainly support it when Trump does it. Do you only object to having a stimulus when the economy is slow, preferring a stimulus when the economy is already pretty strong? You guys certainly dont object to central planning or govt spending, as long as it is the kind you like.
Steve
I can’t speak for jan or anyone else here but I know my views are somewhat different from anyone else here or probably yours. I think that a properly timed and constructed stimulus can make up for a shortfall in aggregate demand. However, conversely, if there is no shortfall in aggregate demand, you won’t produce economic growth with fiscal stimulus. What could happen in a heavily financialized economy like ours is that it could produce inflation in financial assets which is largely what has happened.
Steve, we’re just going to have to agree to disagree with regards to which economy – Trump versus Obama – benefited the working class, business growth & opportunities, and general public good the most.
jan- Sure, but remember that you basing it upon your feelings towards Trump. I try to base it upon the numbers.
Dave- I agree with the first part. On the second I am just not sure. I was quiet on the Trump tax cuts leading to growth as what was done is something for which I cant really find precedent. People just dont cut taxes when the economy is already doing well. I think you are probably correct but with an N of 1 I would hold off on making definite conclusions. The conclusion I would reach is that tax cuts in th modern era usually lead to an increase in debt.
Steve
The open question is why are stimuli as large as the ARRA and Trump’s tax cuts producing such phlegmatic results? IMO the simplest explanations are poor timing, poor construction, and that our economy has changed so there is no Keynesian multiplier. The basic idea behind the Keynesian multiplier is that when people have more money to spend, businesses will expand facilities.
But consider a country that imports everything and produces nothing. For such a country there will be no Keynesian multiplier or at best it will be very small.
I think that’s what’s been happening.
Contra steve – 2015 and 2016 saw a slowing economy. Corporate profits were essentially flat. Just numbers. Twist and explain away all you want, but minority employment is robust and wages are doing better than in the past. They would do better if the Democrats didn’t hate low US wage earners and love immigrants. In 2017 and 2018 corporate profits were up rather robustly, hence the stock market. In 2019 it looks like they will be flattish. In the public equities markets its been all valuation multiples in 2019.
Which brings me to Dave’s point. I might put financial asset inflation differently. I don’t think Fed money has just poured into equities like “too much money chasing too few goods.” The Fed has disrupted the term structure of interest rates. People with return objectives that cannot be achieved through fixed income instruments have changed the paradigm on what they will pay for a dollar of earnings. Yield chase –> multiple expansion. This brings into question the risk adjusted rate of return. Are these multiples prudent and sustainable?
That’s a (value) judgment. At an S&P of 24x that’s higher than historical norms, which, depending on who you ask, should be 16-18x. Is 24 based upon unfounded hope? A view that corporate earnings will grow into the 24 number? Or just taking on risk? I don’t know. I do know that my wealth manager returned 7% this year on a relatively conservative portfolio. This year based upon a strong public equities market and, 2%, upon a covered call strategy. I have told them to have a bias towards reallocation to even lower equity exposure at the first signs of trouble.