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This week: One-Termer Irony; Mr. Play It Safe; Coronavirus Cliff; Reading List.
The Iran hostage crisis of 1979-80 that bedeviled President Carter and ended his re-election chances was resolved when the hostages were finally released on January 20, 1980,… also date of President Reagan’s inauguration speech. The allegedly bad economy (remember, “it’s the economy, stupid!”) that damaged George H. W. Bush’s re-election… delivered 4.4% real GDP growth in the fourth quarter of 1992, the same quarter that elevated Bill Clinton. And now, the news of a vaccine comes… one week after Election Day and is of little use to President Trump in his drive for a second term. Isn’t it ironic, Alanis Morissette once sang.
Without getting into the current imbroglio of contested ballots, would Pfizer’s announcement of a 90% effective vaccine have helped President Trump hold back the thin margins that Joe Biden secured in Pennsylvania, Wisconsin and Michigan? No one can know for sure but it is possible.
If Biden’s win is certified by the states, he will have won mainly because Trump fell behind in the suburbs and exurbs. See the chart in this WSJ article. Trump won the exurbs and working-class suburbs by a smaller margin than in 2016. And Biden won the urban suburbs by a bigger margin than Hillary did in 2016. Given how close the vote was in some key states, a little cheer from the vaccine front against the backdrop of a stock market rally might have improved Trump’s last minute chances just enough to keep him on top. Maybe.
MORE >>> See election certification dates by state. Last two battleground states (NV and WI) have to certify by December 1st.
Mr. Play It Safe
To use Morissette’s sardonic phrase, if Biden is confirmed, America will have elected Mister Play it Safe, the known quantity and safe pair of hands. That implies good things and less good things. The good things could be (no one can be sure) a less acrimonious climate in Washington and an attempt to heal the country. Biden’s long tenure in the Senate could serve him well here, if McConnell and others are willing to work with him. They may have no choice if the Georgia run-off elections for the state’s two senate seats both go the Democrats’ way on January 5th.
Playing it safe carries its own risks however. Trump reduced the country’s involvement in foreign wars and deterred actions by rogue foreign actors mainly by being unpredictable and by intimating, whether true or not, that he could react to provocations irrationally. Restoring former relationships and rejoining global organizations bring back a level of predictability that is salutary in many ways but that may at rare times work against us. Dozens of congratulatory messages from overseas to Biden indicate that most prefer the predictable. That is good for friends, less good with foes.
Back home, the electorate is famously polarized. But it seems like the market could not care less who is President of the United States, so long as government remains divided and the Senate does not flip to the Democrats.
In the past month, the incidence of new confirmed cases has almost gone vertical, with the daily number more than doubling from about 50,000 on October 11th to nearly 125,000 yesterday (7-day averages). So far the wave looks like a cliff and we are climbing. The number of daily deaths has just passed 1,000 again and will climb to well over 1,500 unless the ratio of deaths to 21-day ago cases falls from its current 1.6% (second chart below). So in theory, we will be averaging 2,000 deaths per day at the close of November with more than three months left in the fall and winter seasons.
The speed of the rise seems to have surprised even the University of Washington’s IHME, causing them to raise their February 1st estimate of total US deaths to 399,000 from 390,000 previously on their median scenario, and to 366,000 from 315,00 previously on their universal mask-wearing scenario. The difference between these two scenarios has shrunk from 75,000 to 33,000 in the three weeks since our 21st of October Wednesday Briefs.
Previous waves lasted five to seven weeks from onset to apex, which would place the peak of the current one at some date between now and Thanksgiving. But who can make this prediction with confidence?
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