U.S. elections – No More Bets
As we enter the last hours before the election day in the United States, it is worth having a look at what is at stake in the 2020 American elections. Also, the discrepancy between different polls resembles the difficulty the market had to predict the winner in 2016. It looks like this is similar, with the mentioning that more Americans voted so far than in 2016 and even more registered to vote today.
The chart below shows the evolution of the poll average for the past year. We see the gap between the two shrinking since July, but Biden remains the favorite.
However, this is a national poll. In 2016, all national polls have Hillary as a winner. More precisely, all but one – Trafalgar Group. This was the only poll that gave Trump a winner in 2016. Guess what their forecast for the 2020 election is? Trump!
Where the Two Candidates Stand on Critical Issues
We are not here to predict who is winning but to point some facts ahead of this critical vote. Why is it critical, and how come that the entire world is watching America’s election day?
To start with, the US dollar is the world’s reserve currency, and it is expected to react dramatically to the outcome of the election, rising in the case of a Trump’s win and falling in the case of a Biden’s win.
Next, the US is the largest economy in the world. Trump’s policies emphasized protectionism, isolationism and favored America above everything else. Therefore, Trump’s win means more of the same from the largest economy in the world, something that many other countries are keen to avoid due to tariffs and ongoing trade wars. On the other hand, a Biden win would likely put America back on the international stage as a leader to the free world, with trade tensions giving way to more international cooperation.
Therefore, only judging by these two metrics, today’s elections are crucial for the world’s politics in the years to come. Trump does not intend to shut down the economy due to the coronavirus pandemic, while Biden was vague about it. Trump also promised a vaccine, and many critics argue that he is solely responsible for mismanaging the pandemic. Biden, on the other hand, was more prudent, paying more attention to scientific evidence.
All in all, the discrepancies between the two show, once again, a divided America. If Trump wins again, America will not only remain divided, but isolated too. If Biden wins, it will take time to reverse the course of Trump’s decisions in the last four years.
As for the surveys, they lose their importance from the moment the vote starts. We have seen surprises in the past, so no one should discount surprises in the future.