Handicapping the US 2024 Election
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*Not financial advice, merely pointing out political trends*
We are usually not shy about offering predictions about elections, and are often very accurate too. But we will be the first to completely throw up our hands at any concrete predictions on the US 2024 election: We have no idea what the final outcome will be. There are simply too many variables and wild outcomes possible in the next twelve months. We see a 50% chance for each side that their current candidate (Trump and Biden respectively) is not on the ticket by Election Day. And a few black and gray swan events could also sway the election balance. Our gut says that based on historical patterns and Biden’s current approval rating, a Republican will take the White House. But it’s far more complicated than prior elections where an unpopular incumbent was voted out (1992, 1980, 1968).
The first votes to pick the candidates will be on January 15th with the Iowa Caucus. We should know the main candidates by the Super Tuesday election date, but, there is the possibility that there are changes with the summer party conventions.
We are going to go through a variety of the different variables and scenarios to give people a better understanding now of where we could be in November. The conventional Trump vs. Biden narrative, a 2020 rematch with a close outcome, we think is unlikely. But the stakes are very high. The establishment Republicans and Democratic party cannot lose this time- Trump, and to a lesser extent Vivek and RFK, has publicly stated he will go to war with them if he is President again. We are talking mass firings, funding cut off, and jail time for many Washington players. The Democrats and their allies are pulling out all the stops to keep an outsider (Trump, Vivek, RFK) from up-ending the race. It’s going to be an interesting year.
The Two Front-Runners and The Polls
Conventional wisdom is that 2024 is going to be a 2020 repeat, with a rematch of President Joe Biden and former President Trump. According to the polls now, Trump would easily win that scenario- his polling numbers have been rising for the past several months. A 2 or 3% point edge in the general populace translates into an electoral college win.
Speaking of the electoral college, polling shows Trump with a comfortable lead in all six battleground states, including ones he lost last time (Pennsylvania, Michigan, Arizona). Florida was formerly considered a swing state but has swung solidly Republican in the past eight years.
Using 270towin’s interactive map, these numbers give Trump a comfortable 306 electoral votes, more than the 270 required for victory.
In the media’s base case, it looks like a clean Trump win at this point. Biden’s approval rating has slumped with the economy and immigration issues. And many continue to be drawn to Trump because they believe he is being politically persecuted. But will it be Trump versus Biden? We are not so sure. We will go through several of the variables that could cause either or both of these candidates to be replaced as their party’s front-runner.
Trump – In Jail or Not?
Trump now has a commanding lead of over 50% in the polls for the Republican primary. If he is out of jail, he wins the nomination. The big question for Trump, is will he be in jail or not? While the US has had a third party candidate run before from jail (Eugene Debs one hundred years ago), it has not had a major candidate attempt it. Trump’s campaign style was to do five rallies in a day and numerous press appearances, which would be impossible if he is in jail.
We will not go into the specifics of his many trials, it’s simply too much for this column. But a couple of them could result in his serving jail time. And the others could result in a massive financial penalty. If the outcome of the classified documents scandal or the Jan 6th investigation results in jail time by summer, then obviously the Republicans will have to pick a new nominee.
While the legal merits of the case are by no means a slam dunk on the facts, this is not about the law, it’s about power. Rudy Giuliani had a trial for defamation and election interference in Georgia (we will spare you the specifics) but it resulted in a $148m judgement against him, forcing him into bankruptcy. Jurors in the trial gleefully said it’s not about the merits of the specific case, but sending a message. We imagine that New York jurors or DC jurors will think the same versus Trump. All in all, we place perhaps 50% odds that Trump is knocked out of the race by his legal issues. If not Trump, then who?
The Republican Field: Vivek, DeSantis, Haley
After Trump, the three highest polling in the Republican field are Vivek Ramaswamy, Ron DeSantis, and Nikki Haley. According to Real Clear Politics, none of them are anywhere close to Trump. If Trump were out of the race, it looks like Ron DeSantis would be slightly the front-runner. But he has lost a lot of steam in the past few months, and now Nikki Haley may be the most popular.
But we have to remind readers that by far the one whose views are closest to Trump (pro economic reform, pro restrictions on immigration, anti war) is Vivek Ramaswamy. He is also a very good campaigner and debater, and is strong on social media. If Trump were to drop out, many in his base would quickly migrate to Vivek, making it a three way race. Who wins the nomination would depend on funding and early primary success.
The other question is if Trump stays in, who would he pick as a running mate? A recent trial balloon to pick Nikki Haley resulted in a revolt among Trump supporters. As of now, there has been no discussion of DeSantis for VP. We think that Vivek would be a good pick for Trump as VP. And we hear that DeSantis is angling for Attorney General. Another small possibility is that Trump picks Robert F Kennedy Jr on a national unity ticket.
The Dems- Biden, Newsom and Kamala
As of now, President Biden is the Democrat’s candidate. But the dissent among the Democratic party ranks is rising rapidly. Innumerable prominent Democrats have called for him to step down from the 2024 election – citing his age, popularity, or some other factor. Young Democrats in particular are not thrilled about Biden running.
So we are certain that behind the scenes, certain segments of the Democratic party are looking for a way to replace him. They’ve already found their guy: Gavin Newsom, governor of California. Newsom has done numerous public appearances on behalf of the administration, such as a Fox News debate with Gov. DeSantis. But all the while he has claimed he’s not running. That’s technically true- he has not registered as a candidate in any state. But he has been spending the better part of two years campaigning for the job in the public eye. The family that has backed his career, the Getty family of California, has committed in private to putting up $200m to his campaign. It’s obvious that youthful, energetic Newsom will eventually take over the spot from Biden, the question is how.
We think we have the mechanics of this will play out. Kamala Harris, the current VP, would take over if Biden resigned tomorrow. That would create a mess for everyone – she would be in over her head on the job, and she would lose badly to any Republican candidate in the general election. She also has no real desire at this point to be President or to continue on in her VP role – she can have an easier life and make way more money in the private sector now.
We hear that she is likely to resign early in 2024, and Gavin Newsom be appointed VP. From there, either Biden could resign in 2024 if his approval rating is sagging and have Newsom run for the Presidency. If Biden’s popularity recovers, he could be re-elected and then have Newsom take over some time in 2025/6, giving Newsom the ability to govern up to ten years.
What are the odds of Newsom taking over for Biden in this fashion? We are going to say 30 or 40%. The idea has been floated and supported for almost two years now. This path we outlined is basically the only way that Newsom could end up on the ballot in November at this point. The Democratic party knows that for whatever Newsom’s failings as governor, he is a slick, energetic campaigner and a favorite of their donors.
Events That Could Swing the Race
As we enter the 10 months before the race, there are a variety of major issues that are playing out in the media. All of these will have an impact on the race in one direction or another.
The RFK Factor
Over the summer, lawyer Robert F Kennedy Jr. announced his candidacy for President. A life long Democrat he started his campaign for the Democrat nomination. He polled almost 20% among Democrats. But over time, as the party refused to have open debates and changed its nominating process, he decided to run as an independent.
As an independent, he probably would get under 10% of the popular vote and no electoral college votes. But the real question is whether he would be pulling from Democrat or Republican voters. On some of his positions, such as being anti-war, pro border wall, and anti-lockdowns, he has a Trumpian view. Other issues, like reparations or the environment, he is quite liberal. If RFK can tilt his message to pull more Dem voters to him, it would cement a Trump or other Republican win. If he pulls more Republican moderates towards him, it would make this race a tie. Another wrinkle is that RFK Jr may not actually be able to get on the ballots in some states like Georgia, which would probably help Trump and make Trump more competitive in more left wing and populist states like New Hampshire.
The other possibility, which he has denied, is that he could drop his campaign and become Trump’s running mate- and run on a national unity, pro-reform ticket. Both are dedicated anti-war candidates and would move immediately for peace in Ukraine and the Middle East. Both could say that they have been unfairly persecuted by the establishment for their views and actions. Both are certainly not beholden to the big corporate donors like Newsom or Haley. We are not sure if that would happen, but it is one scenario on the table given the similarity in their views.
Ukraine
A Ukraine peace deal is seeing more and more pressure from the White House. If there’s no peace deal, Ukraine will simply collapse by the end of next summer- no military and no money. How would the electorate respond to a settlement after two and half years and $100bn+ spent? If Ukraine is routed and/or Zelensky replaced, how would voters react? We imagine it’s a black eye for the Democrats who have been so invested in Ukraine, but again, not 100% sure. Voters may cheer a peace deal after two years of military stalemate.
Taiwan
This column has often highlighted China’s desire, and the many steps it has taken towards a Taiwanese invasion. If the Jan 17th election in Taiwan doesn’t go the way it wants, China would have a great window this year politically – in a weak transition year for the US. How would voters react to a Taiwan takeover? Likely Democrat negative. Alternatively, if the US Navy enters the conflict and suffers a ‘Pearl Harbor’ moment because of hypersonic missiles, that would surely result in a surge to the anti-war candidates- Trump, Vivek and RFK Jr.
Economy
Indicators all look recessionary as we have pointed out. If the economy enters a recession and unemployment rises 2 or 3%, it would certainly hurt the Democrats’ chances.
Panic Event
What if there is a new pandemic and lockdown cycle? A nasty cyber attack that shuts everything down? Would that help or hinder the incumbent party?
The Black and Gray Swans
The 2024 Election has a few factors that have a low percentage chance of occurring, but would produce major changes in voting patterns if they did. We will go through these possible gray swans and black swans as we call them, all of which are bubbling below the surface now. Whether or not they play out fully is a matter of speculation, but the chances are not zero.
Illegal Immigration – Will We See Militias?
Nearly 4m illegal immigrants have entered the country under Biden, and the strains on the country from this migration have popped up everywhere. A Wall St Journall poll from early December showed it’s the #2 issue for voters. A NewsNation poll showed 2/3rd of voters disapprove of current policy.
Democratic strongholds like New York are pleading for help and a change in policy. Mayor Eric Adams has repeatedly called on Biden to fix the process and to stop overloading his city. Other states and cities have begun to say similar things. Governors in border states, particularly Texas, say they are overwhelmed.
This issue is clearly hurting Democrats, and many Democrats may gravitate to RFK Jr and his perceived fixes to the problem. Formerly Democratic voters may switch votes this election because of this issue or not turn out. It won’t make a difference in New York or California, but it could be enough to tip Nevada or Arizona.
But we want to bring up another point related to the border issues. What if private sector groups like militias took control of the situation they perceived to be out of control? Several groups have tried to patrol parts of the Southern Border but were shooed away by the National Guard.
If there is a real increase in militia activity, how would Biden react ? Would he crack down on states that okay’d this? Would there be a conflict? Would it highlight the incompetence of the administration? Would a violent conflict hurt Republicans’ chances? We don’t know the answers, but we think you should watch this issue in 2024.
The Courts
As of this writing, Trump had been kicked off the ballot in Maine and in Colorado. This is a real wild card beyond the issue of Trump going to jail or not. He may be the nominee, and skirt serving time, but be removed from the ballot in several states. Would blue states team up to keep him off the ballot? Would the Supreme Court uphold these or reverse it nationally? The Dems would only need to remove Trump or a Republican candidate from or two key states (Pennsylvania, Michigan etc) to tip the balance back to the Democrats.
The Military
Historically, the US military has had next to no involvement in US elections. The only possible exception would be the 1864 election held during the Civil War. But we see the potential that the military will play a role in this election.
First off, there is the scenario that if the US is dragged into multiple hot wars at once (Ukraine, Gaza, Syria, Lebanon, Taiwan) that the military could just declare a national emergency and postpone or cancel the election in the interest of continuity. Again, we assign a very low chance of this but are putting it on the table.
But the military now plays a more direct role in elections and election supervision than at any time in the past. An Exeuctive Order enacted under Trump and renewed under Biden allowed the intelligence community and military to examine elections for evidence of foreign interference. And it has a process for financial sanctions for groups or countries deemed to have interfered. Another group under Homeland security, CISA, coordinates best practices on election security with the states and audits the results [In the US, the states are responsible for managing elections, even for President].
What if the Russians intervene on behalf of Trump? The Iranians, Chinese or North Koreans on behalf of Biden? What if a third party tries to crash the system? We don’t know. But, the military could just call the whole election moot and move to a new alternative.