Democracy America's Ace Asymmetric Advantage

The United States of America has long enjoyed a standard of living that has been the envy of the world. A recent Atlantic article titled the U. S. Economy Reaches Superstar Status illustrates the idea with objective data like "from the end of 2019 to the end of 2023, U.S. GDP grew by 8.2 percent - nearly twice as fast as Canada's, three times as fast as the European Union's..." Perhaps Democracy may be one of the asymmetric advantages that has led to America's enduring success.? Alexis De Tocqueville is universally regarded as having written the definitive book on the subject - Democracy in America in 1840.? Alexis admired what was then regarded as “an extraordinary experiment”.? However novel one thing was clear to De Tocqueville – the American democracy was an advanced example of principles over power that emerged out of free and fair elections representing the people's will.? For the Frenchman reared in the tyranny of an Absolute Monarchy - America was a dream come true.

All other nations seem to have nearly reached their natural limits, and they have only to maintain their power; but these are still in the act of growth. All the others have stopped, or continue to advance with extreme difficulty; these alone are proceeding with ease and celerity along a path to which no limit can be perceived.? Alexis de Tocqueville,?Democracy in America

He observed that elections are rough and tumble affair that can be all consuming.?

For a long while before the appointed time has come, the election becomes the important and, so to speak, the all-engrossing topic of discussion. Factional ardor is redoubled, and all the artificial passions which the imagination can create in a happy and peaceful land are agitated and brought to light… Alexis de Tocqueville,?Democracy in America

… and fraught with the potential crisis of fractious discord

As the election draws near, the activity of intrigue and the agitation of the populace increase; the citizens are divided into hostile camps, each of which assumes the name of its favorite candidate; the whole nation glows with feverish excitement... Alexis de Tocqueville,?Democracy in America

As professional capital allocators we must objectively entertain all potential electoral outcomes as well as their implications for our clients.? Many professionals and ultra-high net worth investors like billionaire Stanley Druckenmiller, say Market is ‘Very Convinced’ of a Trump win.? He is not alone, 538’s Nate Silver argues here: “My gut says’ Trump will win”.

Let us explore the countervailing view.

Vice President Kamala Harris may become the United States next President for the following three reasons.?

1)?? Demographics – the number of voters whose ideals align with the Vice President’s hope filled agenda grow every day.?

2)?? According to Allan Lichtman elections are referendums on the current administration’s efficacy.? ?President Biden’s administration ended Covid, tamed inflation and has presided over a marked increase in American prosperity.

3)?? The American electorate’s decided preference for hope and change.? The preponderance of the electorate tends to embrace the candidate most closely aligned with the dominant American ideals in the hearts and minds of its people at any given time.

Demographics

Ben Hunt correctly predicted the 2016 election by saying Donald Trump would win notwithstanding popular public opinion and polls that had Hillary Clinton cruising to a victory.? This cycle he argues that Vice President Kamala Harris will win because of her capability to better turn out her base.

“I think Kamala Harris is going to win the election this November. ?I think this for the same reason that?I thought Trump would win in 2016: modern Presidential elections are turn-out elections … they’re not about ‘winning over’ undecided voters but about turning out a supermajority of your core voters in your core districts … and I think Harris is beating Trump pretty handily in this regard, almost as badly as Trump was trouncing Biden a few months ago. There is authentic voter enthusiasm out there?for?Harris in Team Blue”

The former republican President Donald Trump’s resonant demographic dwindles daily.? Extending a pattern that stretches back decades, White voters without a college degree, the cornerstone of the modern GOP coalition, have declined by a little more than 2 percentage points as a share of eligible voters since 2020, falling below 40% of the eligible voting pool for the first time ever, according to CNN Fault Lines article of October 22, 2024.

Vice President Kamala Harris has earned the hearts of an emerging generation who see her policies as more closely aligned with their interests.? “Contrary to Republican messaging about Kamala Harris being a DEI hire, young people seem more excited about her candidacy because of the tone and substance of her campaign rather than because of her race, ethnicity or gender,” said Alisha Hines, the center’s director of research and lead author of the study. “This finding makes sense in light of previous research from our?2023 Teens and Screens Report,?which showed that young people are overwhelmingly interested in stories of hope — a defining mood of the Harris campaign.” - Gen Zers who follow politics and media trend toward Kamala Harris, study finds

Demographics at the heart of Republican Alicia Preston’s argument here: Trump will lose.?

Economics

President Bill Clinton’s chief strategist is famous for saying, “it’s the economy stupid” as his rationale for winning in the 1992 election. ?Historian Professor Alan Lichtman forecasts Kamala Harris’s will win because elections are mandates on the incumbent administration.? He demonstrates that President Joe Biden’s administration has - among other achievements - ?presided over one of the most robust economies in history.? The following articles underscore his claim.

1)?? Fact check: Biden, not Trump, has the record lows for Black unemployment and poverty.

2)?? America’s economy is bigger and better than ever according to the Economist the very envy of the world.?

3)?? According to market watch America is doing better than the media or our politicians tells us.? Here’s proof.?

The natural retort to the assertions above is that ??“American economic pessimism has been bafflingly persistent despite major indicators showing that the?economy?is actually strong. ?Feelings are not facts.? Unemployment is low, inflation is significantly down from its 2022 peak (if sticky?and?ticking up?in the last month), wages are up, the?stock market?is hitting new all-time highs, and it looks like the Federal Reserve might be able to keep the US out of a recession.”? There are four charts from Biden’s vs. Trump’s economy.?

1)?? US economic growth is exceeding expectations.

2)?? Wages are catching up with inflation.

3)?? Unemployment is back to pre-pandemic levels.

4)?? The stock market hit new all-time highs under Biden.

If the enlightenment ideals of life liberty and the pursuit of happiness comprise our country’s womb.? No taxation without representation was America’s inseminating statement.? Conceived in protest to England’s tyranny of taxation; America is essentially a dream of right over might realized again and again as its citizens strive to perfect its founders' unprecedented experiment in self-governance.

Governing oneself is an impossibly challenging task.? Think of the last time you successfully governed yourself to the successful conclusion of an important asymmetric advantage – a new capability attaining a healthy weight.? It is hard.? This is why selling the electorate on being the catalytic change that enables it to seize its cherished dreams has historically been the prerequisite to success.? Kamala has seized the novelty associated with being the change candidate.

There is no more compelling testament to Vice President Kamala Harris’s efficacy than her success winning support from over 200 republicans.? For Harris-Walz, Its Morning in America as they have the halcyon vibes of the republican icon Ronald Reagan’s appeal.?

“Kamala Harris and Tim Walz are promoting joy, freedom, and a hopeful future for America. Their optimistic tenor about the nation’s present and future echoes Ronald Reagan’s 1984 re-election campaign”, BeyondChron.

The strength of this appeal is less partisan than it is American.? Vice President has (deserved or not) seized the narrative of being the good that America needs now, and this is an asymmetric advantage that may well see her through to becoming Americas next President.

This potential outcome and others are explored here in Ed Mills article Final stretch before election day: Everything and nothing has changed.

In conclusion, I’d say that the American electorate remains a powerful testament to the nation's enduring ideals and aspirations. Democracy, as observed by Alexis de Tocqueville, is not a static construct but a dynamic and often turbulent process. It reflects the complexities of governance, and the vitality of a citizenry engaged in shaping its future. As the political landscape continues to evolve, the pivotal question is not simply who will win, but what each outcome means for the country's asymmetric advantage.

Whether the nation's next chapter is marked by a continuation of past policies or a shift towards new leadership, one thing remains clear: the pursuit of life, liberty, and the fulfillment of America's promise will be at the heart of every decision made. This enduring commitment to self-governance and the continual refinement of democratic ideals is what solidifies America's place as a global leader and an ongoing experiment in the power of the people's voice.

O God! This American nation is worthy of Thy favors and is deserving of Thy mercy. Make it precious and near to Thee through Thy bounty and bestowal. ~?‘Abdu’l-Bahá

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Russell Ballew and not necessarily those of Raymond James. Expressions of opinion are of this date and are subject to change without notice. The forgoing is not a recommendation to buy or sell any individual security or any combination of securities. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance does not guarantee future results.