by Greg Valliere, AGF Management Ltd.
IN A YEAR UNLIKE ANY OTHER, the Nov. 3 presidential election could continue this stretch of unprecedented events. In late spring, we began to warn of a disputed election, and our concern has only increased in the subsequent months.
THERE ARE THREE TROUBLING SCENARIOS THAT COULD UNFOLD:
First, Could the election get postponed? Donald Trump has suggested this, and Joe Biden frequently says he fears it. But Congress controls election logistics, and there’s no way the liberal House would agree to postpone the voting, even if Covid-19 cases are still elevated. Could Trump seek an injunction to delay the vote? He can try but he won’t succeed. Chances of a delayed election: very remote, the election will be held on Nov. 3.
Second, Could it take days — or even weeks — of counting ballots before there’s a
winner? A flood of mail-in ballots could take weeks to count, as we saw in New York State this summer, where it took over a month to declare winners. Not only is the Post Office unprepared (and under-funded) for a tidal wave of ballots, there aren’t enough ballot counters. Chances of a delayed result: surprisingly high; don’t expect to know the winner on the night of Nov. 3.
Third, Could several state results that are highly reliant on mail-in ballots — and have razor-thin results — prompt Trump to claim fraud? This is the great fear, and with a president as litigious as Trump, we could see him fighting right up to the Supreme Court to invalidate a result that hinges on mail-in ballots. He already is hinting that this will happen. Chances of a disputed result: at least 30%.
THE SOLUTION, OF COURSE, would be a clear blowout by either Trump or — more likely — Biden, which would make recounts and legal challenges irrelevant. But the race has tightened in recent weeks; Biden leads this morning by 7.5 points in the Realclearpolitics aggregate of all polls, and his margins in battleground states have slipped.
WE THINK THE POLLS WILL TIGHTEN THIS FALL as Trump relentlessly attacks Biden’s mental acuity and his agenda, which has veered to the left. If the candidates are separated by only 2 or 3 points on Nov. 3, a disputed result will become even more likely.
WHAT IF TRUMP REFUSES TO LEAVE? Could he claim fraud and refuse to vacate the White House? Incredibly, we hear from clients and our sources in Washington that this scenario is not totally out of the question. But the Constitution is explicit: the Chief Executive’s term ends at noon on Jan. 20, 2021 if the Electoral College has determined, in early December, that the president has lost. Top Pentagon officials, many of whom who loathe Trump, would enforce that.
BOTTOM LINE: As long as Trump insists that the election will be rigged, the threat of a disputed election will not dissipate. A delayed result is quite possible, then all bets are off if Attorney General William Barr contests those results. The 2000 election was decided by the Supreme Court, and this election could be also.
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.
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This post was first published at the AGF Perspectives Blog.
