The coronavirus pandemic has pushed the Democratic race for the White House from the headlines and rocked financial markets, pushing the S&P 500 into the first bear market since the financial crisis. While diseases are not inherently political, the media is doing its best to turn the current pandemic into a political football. We see several potential political scenarios.
Conventional wisdom on CNN and MSNBC is that the coronavirus is likely to lead to Trump’s defeat in November. The rationale goes something like this. Trump has bungled the response to the coronavirus by not having sufficient testing available. Coronavirus is likely to lead to a recession, thousands of deaths, and voters will punish Trump. It is certainly a possible scenario and we take it seriously.
The alternative scenario is that Trump has acted aggressively to cut off plane flights from China and now Europe. That Trump is also moving to harness the full resources of the US Government and declared a national emergency today. Voters will see a vigorous President and that the virus is likely to peak in the next two to three months. The economy will take a hit but it will then come roaring back. Finally, voters will see this as a foreign “Wuhan” virus that came from outside America and that Trump helped America overcome it. We believe that this is also a possible outcome.
Joe Biden has attempted to upstage the President giving his own address to the nation on coronavirus. That said, we think that the coronavirus is tricky for Biden. First, the pandemic has allowed Trump to gather most of the attention. Second, the virus reminds voters that Biden is old and at risk (just as Trump is but even more so) to the virus. Third, the virus brings up the issue of immigration. Biden (as would Sanders) has been forced to support open borders which plays right into Trump’s hands when it comes to his characterization of the virus as a foreign invasion that he has tried to block and one that Biden would let in.
It’s very challenging to know what will occur over the next 6 months with respect to the virus. Our hopes and prayers are that the pandemic will abate and spare many lives. Whether the course of the pandemic follows a more severe path or is more benign will impact the course of the election. It could go either way, but we don’t think this is the slam dunk for Biden that much of the popular press is suggesting. We note that in the PredictIt Markets, the race is neck and neck between Trump and Biden. We believe that accurately captures the current state. It’s too early to know how the coronavirus will play out and its impact on the Presidential race.
NewEnglandPolitics.com 