The 2020 Election Comes Into Focus

by Charles Schott

Today America is divided down the middle politically and each side has its own perspective on the road ahead. The difference is not so much a divide between Republicans and Democrats per se... The split is deeper than that. Today, the country is divided between: 

1. it's most educated elites who are allied with the mostly urban, women's and minority interest groups found primarily on our nation's two coasts; and;
2. those who live in the vast "middle" of America (i.e., the more rural, industrial and less educated states of the South, West, North and Midwest).  

During the last decade, the people who live in the middle of America have not experienced prosperity to the same degree as the coastal elites; for the most part, they are much more familiar with the challenges and difficulties of day to day life in America today. 

The two groupings are separated by experience, culture and economic well being. Strangely, the Democrats make up an alliance of many of the wealthiest Americans, government and university employees and the poorest citizens.

THE DEMOCRATS

The "elite view" is what one tends to find overwhelmingly represented in Washington, DC and New York (and Boston, San Francisco and Seattle and most university towns around the country).  The elites (and their interest group allies) are extremely angry with President Trump (and the Republicans who support or work with him). This anger has reached the point where many elites consider Trump "illegitimate." 

The elites tend to look down the rest of the country (i.e., "the flyover states"), either condescendingly or (in a few cases) with disdain. Many of the elites and their allies simply have not gotten over the shock and surprise that came the morning after the 2016 election; "the evil idiot Trump" had won. In their world, nobody could have voted for Trump because nobody they know did.

This elite grouping includes many traditional Republicans (called "never Trumpers") who view Trump not so much an illegitimate president, but certainly as an illegitimate, accidental and short term head of the Republican party.  Many of these "Never Trumpers" as we; as other (mostly moderate suburban) voters are disaffected with Trump due to his perceived dishonesty, style and character. They are considered as part of the current anti-Trump forces, even though they traditionally voted Republican in the past (sometimes for generations). 

The coastal elites also, for the most part, believe with great certainty that they will defeat Trump in 2020 with almost any of the current crop of declared Democratic candidates. Since 2016, the Democratic party has itself remained divided between its more pragmatic liberals (of the Hillary-Biden persuasion) and far left progressives (like Elizabeth Warren and Bernie Sanders).

As many of you may recall, I don't do predictions.....but if I had to bet, it would be that by Memorial day Biden should no longer be a factor in the 2020 campaign and that the Democrats will end up with a convention choice between Bernie Sanders and Michael Bloomberg.....with Bloomberg the likely nominee.

I have concluded that Biden should be effectively out of the presidential race by the end of May because he does not relate to younger (under 30) voters or progressives and has proven to be extremely gaffe prone (both naturally and increasingly due to his advanced age).  

From a Republican perspective, Biden is "the gift that keeps on giving." He is currently poised to do well only in South Carolina (the 4th of the early primaries before Super Tuesday on March 3).  Biden has lost support in the last few months, but has maintained a core of black voter support that the other candidates have so far been unable to peel away (not for lack of trying). Whether that support will hold in the face of his poor showings in Iowa and New Hampshire is something that will be revealed.

That said, of all the "bets" made in this article, it is this one concerning Biden's possible lack of staying power in the race that has generated the most "push back" from various colleagues and friends, both Republican and Democrat.  They think Biden does have the needed staying power, largely due to his likability, his experience and because there seems to be no major candidate (Sen. Klobuchar call your office) who might serve as a viable alternative.  They do not dispute Biden's shortcomings.  My view since early last Fall has been that Bloomberg is the candidate most likely to be that alternative.

If Bloomberg does win the Democratic nomination, he will probably want to take a running-mate from today's large crop of Democrat women governors and senators.  In this scenario, it will be important to see how Warren's supporters end up splitting between Sanders and Bloomberg.  Additionally, if Bloomberg can make it to a second ballot, he will then probably get some help from Democrat "super-delegates," who do get to vote starting only on the second ballot.

If Sanders wins the nomination, however, he will probably try to take a running mate from the parties less progressive wing so as to unite the Democratic party (although probably not someone who is too closely associated with the Clintons....where bad blood from 2016 remains).  I say "try to take a running mate" because of George McGovern's experience as a very left wing D nominee in 1972.  In that election, at least 5 party leaders turned McGovern down (in part because they felt he was not likely to win).  This was before McGovern finally asked Missouri Senator Thomas Eagleton, who accepted, but then painfuly self-destructed over a prolonged period due to his undisclosed prior treatment for mental health issues. McGovern then had to find another running mate; Sargent Shriver (a Kennedy brother in law) who was acceptable, but not all that helpful as a candidate, The whole thing left McGovern substantially weakened in the run-up to election day.

Also, if Sanders wins the nomination, I would be prepared to bet that his campaign will at least come close to being as big a disaster for the D's as McGovern's 1972 showing (he only won Massachusetts and the District of Columbia....Nixon won 49 states!). Sanders' nomination would also probably cost the D's both their house majority and their chances for re-taking the Senate. 

In 1972, the D's were so entrenched electorally as the governing party that even a 49 state Nixon win did not significantly change the D's control of either house of Congress. Things are different today, particularly in House races. There coattails are a factor (and a landslide win for the R's presidential candidate would be expected to have a significant impact down-ticket on the D's performance).

If nominated, I think Bloomberg would do much better than Sanders.  Whether Bloomberg could overcome what appears to be Trump's current electoral college advantage remains to be seen.  Bloomberg would probably need to restore almost all of Hillary's anticipated "blue wall" of Midwestern industrial states (e.g., Ohio, Pennsylvania, Michigan, Wisconsin) that ended up going for Trump in 2016.

The one other thing worth reiterating is that most D elites and D interest groups today are wound up with hatred for Trump to an incredible degree. The popular term for this is "Trump derangement syndrome" (TDS), which is regularly dismissed by the elites....but it is a significant issue.  Many (if not a majority) of these Democrats are so wound up they have closed their minds to the extent that they have seemed to lose touch with their otherwise impressive analytic abilities. 

Thus far, TDS has affected both the progressive and moderate factions of the party pretty much equally, which normally would not be expected (the progressives being more inclined to getting worked up on issues generally).

THE REPUBLICANS (AND PRESIDENT TRUMP)

On the other side, are the non-elites of the American middle....the Heartland (broadly defined to include the non-coastal states of the American West, North, South and Midwest). They are perhaps more conscious of the need to look at the election on a state-by-state electoral vote basis. 

Until recently, the opinion polls had most Democrats, and especially Biden, looking like they might be able to beat Trump....but experienced analysts understand that the popular vote has been an area where traditionally a lot of Democrat votes get wasted (by running up large margins in big states like New York and California).  Both Al Gore and Hillary Clinton lost their elections but won the popular vote (another element of the "Trump is illegitimate" mantra).

Today Republicans are quite optimistic that Trump will win re-election. Some are very optimistic.  They note that Trump can lose as many as 36 electoral votes from his 2016 totals and still be re-elected. The consensus view among Republicans, however, is, I think, that Trump will hold almost all of the states he carried in 2016 and may also win a close state or two that he previously lost. Here you are potentially talking mainly about Minnesota, New Mexico and Colorado, among others.

Trump supporters also point to one of the strongest economies and stock markets in memory, as well as extremely low unemployment numbers (all of which usually strongly favors incumbents) as well as several other accomplishments important to his base, but also to a gradually vanishing (but still significant) group of independent voters.  

Trump's successful approach to Supreme Court and judicial nominations has both angered Democrats and energized many Republicans, especially conservatives and evangelicals (who might otherwise see less at risk in 2020).  

I think this is where the Democrats lose sight of the fact that while their approach (including the recent partisan impeachment efforts) strongly resonates with their base, it does not play as well with independents (and has served only to energize the Republican base).  

It will almost certainly be a "turnout election" with both sides doing everything they can to target and "fire up" their supporters and get them to the polls, especially in the 10 or so expected swing states, all of which are to be found away from the coasts. 

Both sides can lay claim to having the chance to flip some voters who cast votes the other way in 2016; the D's primarily by appealing to traditionally Republican suburbanites who stuck with Trump out of party loyalty and the R's primarily because they are seen as having delivered for conservatives (particularly those who voted Libertarian or even for the D's in 2016 because they distrusted Trump's character).  

One of the most interesting things about the R's currently is how the makeup of the party has changed (and how these changes are continuing).  Starting in 1964, the Republican party became much more conservative nationally, even though it still had it's traditional "liberal wing" (in addition to the moderates).  Liberal Republicans of that time included Nelson Rockefeller, William Scranton, George Romney, John Lindsay, Jacob Javits and many others (including Connecticut Senator Lowell Weicker, who was often referred to as the "leader of the McGovern wing of the Republican party"). Over time, these Republican liberals were either defeated at the polls (both in primaries and general elections) or simply became independents (like John Anderson) or became independents who also caucused with the D's (like Vermont Senator Jim Jeffords...whose defection changed control of the Senate in 2001). The liberal Republican today still can be said to exist, but is also rare to the point of being an endangered species.

What has happened starting with Trump (and perhaps earlier with suburban women because of the abortion, health care and social issues) has been the gradual shrinking of the number of the remaining "moderate" Republicans. As recently as 2012, these moderates were well represented by such well known leaders as Howard Baker, Bob Dole, Rudy Giuliani, Lamar Alexander......and also Mitt Romney.  The successors to this group of moderate Republicans are now the ones gradually being replaced by blue collar and rural former D's (to a large extent the "Reagan Democrats," but in much greater numbers than Reagan attracted).  This is the group that has injected a strong dose of populism into today's Republican party.  This trend can be expected to continue if Trump wins re-election as President such that he will then have four additional years to consolidate his hold on the the party and the party machinery.

It will also be tremendously interesting to see how Trump does appealing to black, Jewish and women voters, all traditional D constituencies.

Since 1964, black Americans have been an overwhelmingly D constituency (with D's traditionally getting 80-90% of the black vote).  In 2016, Trumps pitch to black voters was, "you've been taken for granted by the D's for many, many years....they get your vote, but then don't deliver for your community.  What do you have to lose?!!"  

In 2020, the same pitch will be made, but it will will be re-enforced by Trump's performance on the economy and the associated performance on black unemployment (which is at historic lows) and black family income. The D's will have to actively fight the idea that Trump as President has delivered for black America and appeal to their historic ties. It will be interesting to see what happens here. Putting a Pete Buttigieg on a Bloomberg, Sanders or Klobuchar ticket would likely resonate less strongly with African American voters, thereby giving President Trump a larger group of potentially disaffected black voters to appeal to.

Jewish voters have been another overwhelmingly D constituency over many decades (with D's traditionally getting 75% of the Jewish vote).  In 2020, however, Jewish Americans can see what many in Israel see; that as president, Trump has been a very powerful supporter (and advocate) for Israel, its security and its future.  No prior American President (even those who during their elections promised to do so) moved the US Embassy to Jerusalem.....No prior President recognized Israel as having territorial rights to the strategically important Golan Heights.  The list of items important to Israel and the US Jewish community goes on....and it will be interesting to see if (and if so, by how much) these decisions move the dial in Trumps direction.

That said, many traditionally Jewish D voters also feel President Trump is partially and even significantly responsible for a recent resurgence of Antisemitism in the U.S. and that he has not spoken out strongly enough against it (sometimes even expressing the view that it is important to seek to understand "both side's" points of view....something Jewish Americans for the most part fundamentally reject. It will be interesting to see how that issue surfaces in discussions among Jewish voters with respect to those considering casting a vote for Trump.

Finally, women voters in the last several elections have favored Democrats with the Republicans traditionally being said to suffer from a "gender gap" (even though the issue could just as easily be described as the D's suffering from a "gender gap" with men).  What is hard to discern about the women's vote, however, is the extent to which an increased D appeal to suburban women is offset by an increased R appeal to women in the rural and industrial states away from the two coasts.  In American elections, not all women vote the same way; for every Betty Friedan there is also a Phyllis Schlafly.

Again, if I had to bet, I would go with Trump winning overall by about the same margin (and with most of the same states) that he won in 2016, but again coming up short in the national popular vote.

But with respect to these three sub-groups, as compared to 2016, I would bet on Trump doing at least 5% better (and possibly more) with both black and Jewish voters and on his margins among women voters being down by 5% or less.

The one caveat I would place is that while I think Trump would likely be able to achieve victory over almost every one of the Democratic candidates currently in the race, that assessment does not apply to former NY Mayor Michael Bloomberg, who I think would give Trump a very close race that would include a possibility of defeating him.  

Bloomberg is tough, methodical, data driven and has effectively unlimited resources at his disposal.  To say he has a lot going for him is to understate things considerably.  Among Democrats, his greatest weaknesses are that he is dismissed for being a billionaire (and therefore inherently suspect) and that he is not trusted due to having held office in New York City first as a Republican and then as an independent (not a Democrat). In 2000, Bloomberg hosted the Republican Convention in NYC and attended the convention as a delegate, casting his convention vote for George W. Bush.   More recently Bloomberg has gotten into some difficulty as the result of videos of speeches made earlier in his political career, including racially insensitive comments about "stop and frisk," a major issue among urban minority communities.

Bloomberg also starts at a disadvantage for having gotten into the race late (and has therefore not eligible to be on the ballot in the early primary states)....I believe his first primaries will be on "Super Tuesday" on March 3 (only two weeks from now (!)). 

In Bloomberg's column. however, in addition to having essentially unlimited financial resources, he has shown a willingness to use those resources in new and potentially effective ways.  It was reported on the last day of 2019 that Bloomberg has set up wholly owned consulting group that exists, but that it is still in "stealth mode."  It is also reported that this consulting group is already filled with former Facebook employees ready to use the latest "Facebook-like" social media and big data capabilities to mine and exploit the Internet on Bloomberg's behalf.  

These new approaches are likely to surface not just in social media, but in all aspects of a D campaign.  Even if Bloomberg is not nominated, it is interesting to speculate on his likely willingness to make this consulting group fully available to the D nominee, whoever he or she is.  Bloomberg has repeatedly said that denying the President re-election is one of his absolutely highest priorities, whether he is the nominee or not!

Bloomberg has also shown a willingness to boldly use resources in older, more traditional ways that generally are also quite effective. Bloomberg recently has made sizable campaign donations to incumbent local Democrats around the country, which will likely prove to be an advantage both eventually in getting their support and in limiting the number of D office holders who might be willing publicly to oppose him. It is also worth noting that D office holders are typically the category from which D "Super delegates" are drawn.

In short, if I were a Democrat, supporting Bloomberg would seem to be a "no brainer." But this is where Trump Derangement Syndrome's effect on the party's thinking currently comes into play with most significance for the outcome. 

There are also several "wild cards" that need to be considered as having the potential to effect the 2020 election.  Some of the "wild cards" are foreseeable to some extent and some are not, although none are certain to happen. Probably the biggest foreseeable ("known unknown") would be another vacancy on the Supreme Court between now and the election (particularly if it involves replacing a liberal justice). Such a development would totally rile both sides and turn up the heat of public discourse to an almost unbelievable degree.  Other "known unknowns" would include the possibility of the economy falling into a recession or a significant increase in military operations in the Middle East or on the Korean peninsula.

Then there are also the questions concerning (in Donald Rumsfeld's famous formulation) "the unknown unknowns" which require tremendous levels of imagination to get even potentially close to anticipating them.  I have always liked the comment about "the economist who predicted 9 out of the last 2 recessions!"  I think that all but a few futurists (and writers of fiction) have similar records in this respect which are about as good as the economists.  

There is also the story about the economist who when asked the for answer to a question posed by a policymaker was reported to have replied, "well what do you want it to be?" While funny to some....(but certainly not to economists) this story does serve to illustrate what is often called "confirmation bias." In my experience, most analysts deal with these risks either not at all....or by generally discounting the degree of certainty with which they view the rest of the environment (or political playing field).

Finally, it is always good to remember that the only thing that approaches certainty in this area is that some things which are unexpected and important to the 2020 election outcome will come to pass!....and that in today's world, change is the only constant!

Charles Schott is a Senior Adviser at the Center for Financial Stability in New York and is a former Deputy Assistant Secretary of the Treasury for International Trade and Investment and a former FCC Chief of Staff.  The opinions contained in this article are strictly those of Mr. Schott and not those of the Center for Financial Stability.