A Memorable Week Ahead, With the Senate Up For Grabs

by Greg Valliere, AGF Management Ltd.

THERE ARE SO MANY STORIES we’d rather cover as this new year begins — tensions with Iran, the emergence of a tough new antitrust policy, the likelihood of a dramatic shift in U.S. energy use — but those and many other themes will have to wait.

THE BOMBSHELL IS THAT DONALD TRUMP GOT CAUGHT YESTERDAY, making threats which many legal experts say is a potential felony — the solicitation of election fraud. Someone got Trump on tape, and it’s not fake news.

THIS WILL FURTHER SCRAMBLE the outlook for tomorrow’s two Georgia senate races, where a slight Republican lead a month ago seemingly has narrowed. The Trump tape didn’t help the GOP and now both elections are too close to call, perhaps headed for recounts and still more disputes.

TWO KEY POINTS: First, even if the Democrats win both seats — and, therefore, the Senate, there are at least a couple of moderate Democrats who will not consistently vote with their party.

Second, the Electoral College challenge on Wednesday is largely theater; it won’t change Joe Biden’s victory — there was no significant fraud, as William Barr and dozens of judges have asserted.

BUT THIS IS WASHINGTON, where there’s already an intense focus on the NEXT presidential election. The lean and hungry Sen. Josh Hawley (R-Mo.) has poorly concealed his ferocious ambition to inherit the Trump base; he and Ted Cruz will launch a last-ditch effort to block Biden on Wednesday. To their credit, neither Lindsey Graham nor Marco Rubio nor Tom Cotton have joined the rebels.

SO THERE WILL BE HOURS AND HOURS of debate on Wednesday, starting at 1 p.m. and probably lasting well into the night. And there probably will be clashes in the streets as Proud Boys battle leftists. But by the end of this week, the temperature will begin returning to normal, with Biden and Mitch McConnell discussing legislative plans.

BIDEN WILL HAVE TO CONTEND with a deeply divided electorate; well over half of all Republicans believe the election was stolen. Trump, who’s also eyeing 2024, will continue to brand Biden’s presidency as “illegitimate.”

TRUMP WILL REMAIN A FOCUS of endless controversy, of course; what can you say about a president who claimed yesterday that 350,000 U.S. Covid-19 fatalities are exaggerated and “fake news?” The post-Christmas surge in Covid cases will continue for weeks; the economy will stay in a soft patch until spring.

ALL THE HAND-WRINGING about damage to American institutions seems over-done; the country will move on and the markets are looking forward to a robust second half.

THE REAL FOCUS should be on the virus and vaccines; the initial rollout has been extremely disappointing. Millions of people need to be inoculated, fast — that’s the biggest issue, not a brazen effort by Josh Hawley and Ted Cruz to jump-start their presidential campaigns.

This post was first published at the AGF Perspectives Blog.