by Greg Valliere, AGF Management Ltd.
THE MAIN EVENT obviously is the still-undecided presidential election, but on Capitol Hill the big story is the growing frustration among Democrats after their lame performance on Tuesday night. Nancy Pelosi and Chuck Schumer are the targets.
FIRST, THE PRESIDENTIAL RACE: Thereās still a narrow path for Donald Trump to win re-election, but voting trends in Pennsylvania, Nevada and Arizona donāt look good for him. Joe Biden is likely to become president, but thatās not certain.
PLAYING WITH FIRE: Trump and allies like Rudy Giuliani will argue that thereās voter fraud; they may stir up protests that could get out of control. It could take weeks before recounts and legal challenges are resolved, as anger grows on the right and the left.
AT SOME POINT, THE NATIONāS ESTABLISHMENT ELITE ā generals, business leaders and top Republicans on Capitol Hill ā may have to urge President Trump to drop the legal challenges and accept the inevitable. But it wonāt be easy to get to that point; he and his allies believe the election is being stolen.
WE WROTE, RELUCTANTLY, LAST WEEK that the threat of violence is in the air, and yesterdayās protests at ballot counting centers may be the precursor of unrest. A resolution of this election may not be imminent, as tension mounts.
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IN THE MEANTIME, SHOCK WAVES are still reverberating on Capitol Hill, where Democrats lost several seats in the House ā with Republicans apparently maintaining control of the Senate. These developments were not expected by the pathetically inept polltakers.
PREDICTABLY, THERE ARE TWO NARRATIVES from reeling Democrats: Progressives say the partyās agenda was too timid; moderates say that their constituents have no stomach for socialism. Both factions agree on one point: fresh leadership is needed.
ITāS TIME FOR NANCY PELOSI TO GO: She couldnāt take āyesā on a stimulus package, and she was an albatross in election battles that saw several veteran Democrats defeated. Sheās 80 and wants one more term, but we anticipate a vigorous challenge to her in coming weeks.
CHUCK SCHUMER, WHO TURNS 70 LATER THIS MONTH, faces an intriguing race for for his New York Senate seat in 2022, with Socialist firebrand Alexandria Ocasio Cortez a likely challenger. Schumer had expected to be Senate Majority Leader next year, but the Democrats lost at least two key races on Tuesday night. The wily obstructionist, Mitch McConnell, will continue to rule the Senate.
IF JOE BIDEN BECOMES PRESIDENT, he will be thwarted repeatedly by McConnell, who favors only a modest stimulus bill ($1.5 trillion is the upper limit). And McConnell has no desire for tax hikes, which may pass in the House ā only to die in the Senate.
BOTTOM LINE: Democrats we talked with yesterday were thrilled at the prospect of getting rid of Trump, but they acknowledge that their disastrous congressional elections will thwart the party for at least two more years. Republicans we talked with didnāt mourn Trumpās likely defeat; after all, they will largely control the agenda.
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This post was first published at the AGF Perspectives Blog.