Election Fraud Hysteria Grips Washington

by Greg Valliere, AGF Management Ltd.

TIME TO CALM DOWN: Donald Trump’s strongest supporters are claiming the election was stolen, while on the left there’s paranoia about a coup. Take a deep breath, we say, and let the courts determine the facts.

THERE UNDOUBTEDLY WERE IRREGULARITIES in the voting; there have been irregularities for ever and there always will be — it’s not a perfect process. Some ballots were damaged, some votes were from dead people. The key is whether there were enough irregularities to change the outcome in any state — and the answer appears to be no.

TRUMP’S CONGRESSIONAL SUPPORTERS are eager to show the party’s angry base that they will support probes. This makes sense because Republicans from, say, South Carolina who turn against Trump this week will surely lose their next primary. Trump won about 71 million votes; his base needs to vent.

CHRIS CHRISTIE, WHO’S A BLUNT former GOP federal prosecutor, has stressed in recent days that this will boil down to facts. Most of the claims of fraud are baseless, easily disproved, so why not let the process play itself out, transparently, in the courts?

WITHIN THE WHITE HOUSE, there’s a resignation that Trump lost and that legal appeals are very, very long shots. The president and his close advisers already are thinking about the future — according to this morning’s New York Times, Trump may form a political action committee that will keep him very much in the public limelight after Joe Biden’s inauguration.

THE LIKELY SCENARIO between now and year-end is that Trump will not win in the courts and will have to step down — but that doesn’t mean the next few weeks will be smooth.

THE PRESIDENT WILL CONTINUE HIS PURGE: He clashed repeatedly with Defense Secretary Mike Esper, who Trump said was “terminated” yesterday. This prompted rumors about Trump taking over the military, but we think the move was strictly vengeful, with no greater implications.

BUT MORE FIRINGS ARE LIKELY: FBI Director Christopher Wray and CIA Director Gina Haspel are widely believed to be next. Even Attorney General William Barr is
vulnerable, despite his controversial pledge yesterday to authorize Justice Department attorneys to investigate voter fraud. The lead attorney in such an effort resigned last night.

TRUMP WON’T ALLOW THE GOVERNMENT to provide normal transition aid to the Biden camp, and that issue might not be resolved until the Electoral College votes on Dec. 14. There will be other controversies — perhaps involving pardons — between now and the Jan. 20 inauguration.

FOR THE FINANCIAL MARKETS, which were justifiably jubilant yesterday because of a Covid-19 vaccine breakthrough, only a true Constitutional crisis would dampen the upbeat mood. Trump supporters will get their hearing in court, but it still appears that Biden won in Pennsylvania, Wisconsin, Arizona, etc. Let the facts come out and there won’t be a Constitutional crisis.

THIS WOULD GIVE PLENTY OF COVER for Mitch McConnell and other Republicans. They can let the process play out, and then they can tell the 71 million Trump voters that they did everything they could. One important casualty could be Biden’s legitimacy as president, which the Trump base will never accept.

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.