by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
MEMBERS OF BOTH PARTIES increasingly believe that Joe Biden will not seek a second term as president.
HIS CLOSE ALLIES will not concede this, because Biden would become an instant lame duck if it appears that he won’t run again. But his chances for re-election have slipped dramatically in recent weeks, as many in Washington now acknowledge. The debate is whether he runs and loses or — more likely — whether he chooses not to run.
A SCENARIO WE HEAR FREQUENTLY is that dramatic losses for Democrats in the Nov. 8 elections will be a likely catalyst. Republicans are favored to easily re-capture the House, and they possibly could take the Senate as well. The likelihood of steep losses for the Democrats will require a scapegoat — Biden.
IT’S IMPOSSIBLE TO OVER-STATE the sense of doom among most Democrats, who concede — in private — that Biden’s shockingly low poll numbers (and his persistent gaffes) are unlikely to reverse as he grapples with several major crises:
Inflation: This is the biggest single albatross for the Democrats. Polls show overwhelming opposition to Biden’s handling of inflation, which many voters believe has spiked because of massive federal spending. Even if food and fuel prices begin to decrease by summer, the damage will have been done to Biden’s polls.
Urban crime: It’s out of control in Atlanta, San Francisco, Washington, Chicago and dozens of other cities, as thousands move to Charlotte, Nashville, Austin and elsewhere. Biden has never embraced the “defund the police” message, but Republicans know they have a potent issue.
Illegal immigration: Even Biden’s new budget proposal calls for more border enforcement but he will be on the defensive as Republicans cut new TV aids claiming that two million illegal immigrants are likely to enter the U.S. this year. Nothing motivates Donald Trump’s base like this issue.
Ukraine: We think Biden did a great job of uniting NATO allies, but the public thinks he has moved too slowly and could do more to help Ukrainian patriots. Biden’s polls on his handling of foreign policy began to plummet after the inept U.S. withdrawal from Afghanistan last August, and those polls have not recovered.
Hunter Biden: Even the Washington Post is now writing about shady financial dealings between Biden’s son and foreign agents. There’s no certainty that the president profited, but Republicans have an issue that will generate endless hearings if the GOP takes the House. After two more years of pummeling on Hunter’s emails, Biden may lose any remaining enthusiasm for a second term.
THE AGE ISSUE: It simply will not go away; Biden would be 86 at the end of a second term. We’ve encountered him several times over the past few decades, and he always seemed vibrant, but something now looks different. He always had a stutter — no crime there — but he seems frail; his gait sometimes looks unsteady, a common affliction among the aged.
WE HAVE NO IDEA IF BIDEN’S MENTAL ACUITY is slipping (we hear from sources that in private White House meetings, he’s pretty sharp and well-informed). But about half of all Americans think he’s too old now — which makes a 2024 run all the more improbable.
BIDEN’S GREATEST HOPE is that the Republicans over-play their hands on social issues and refuse to distance themselves from Trump, whose obsession is to prove that the 2020 election was fixed. Most of the Republicans in Congress want to move on, and they worry that Trump will continue to be an unwelcome distraction.
AS SPECULATION SWIRLS about Biden not running again, the spotlight will shine harshly on Kamala Harris, who has disappointed even her supporters. The knock on her is that she hasn’t shown much gravitas, and it’s difficult to disagree with that assessment. We hear that at least a dozen Democrats are ready to jump in if Biden steps down.
POLITICS CAN CHANGE IN AN INSTANT, and it’s possible that the Russians will be driven out of Ukraine, inflation will subside, and crime will drop. But Republicans are very likely to win the House — which could set in motion a process that persuades Joe Biden that one term is enough.
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.
