The negative factors that Trump must turn around to secure re-election.

The news …

Since the opening of the 2020 U.S. Presidential Vote Share Market contract on 7 February 2019, the Iowa Electronic Markets has Democrats taking the greater share of votes in the November 2020 presidential elections.  The purchase price of a win by the Democratic presidential candidate has increased by 15.2%, from $.50 per share on 7 February 2019 to $.576 per share as of 17 June 2019.

Meanwhile, the price of a win by the Republican presidential candidate has decreased by 4.71%, from $.467 per share on 7 February 2019 to $.445 per share as of 17 June 2019.

With just over 16 months left until the general elections, there is still time and opportunity for changes in these prices, driven particularly by who is chosen by the Democratic party to vie for the presidency.  During this time period the expected Republican nominee, President Donald Trump, will be expected to work on the negative aspects of his narrative given his unpopularity among the American electorate.  Here are some negative factors that traders in the political prediction markets should expect to see Mr. Trump to make an effort to improve on.

Mr. Trump’s overall approval rating and the areas he has to target….

After 860 days in office, Mr. Trump’s approval rating is at 40%, according to Gallup poll data.  But as Shannon Pettypiece and Mike Dorning point out in a piece for Bloomberg, no president since 1952 has won re-election polling under 48%.  Mr. Trump, according to the article, has never polled above 46%.

To start driving up the value of his electoral stock, Mr. Trump’s management team will have to reassure farm states like Iowa that his trade policies will eventually pan out for them.  Politic prediction market traders should be concerned if they see no movement in this area.

Another area, more along the line of political optics, is Mr. Trump’s activity on Twitter.  As Ryan Girdusky notes, Mr. Trump’s addiction to Twitter is “toxic.”  Both Democrats and Republicans want Mr. Trump to stop using the micro-blog service.  His detractors and some of his supporters express that Mr. Trump’s Twitter activity makes him look petty.  Mr. Trump pushes back on this argument by asserting that social media is an effective way of communicating his policy positions.

Traders should be looking for changes in this political behavior over the next few months as the change in optics may be reflected in prices.

Mr. Girdusky also adds that Mr. Trump has a media problem and that whether stories are true or baseless, the media paints him as corrupt, incompetent, or both.  Mr. Trump’s activities feed this perception.

While the economy is strong, with unemployment falling below the historic full employment rate of four percent, the 2017 tax cut that Mr. Trump credits with spurring economic growth is viewed as unpopular by most Americans, writes Ben White of Politico.  The majority of Americans don’t believe they benefited from tax relief under the law.  Again, Mr. Trump will have to use the next few months persuading the American public that their perception is wrong.

One last area traders will have to look for movement on by the Trump team is the President’s perceived embrace of bigotry.  Marc Thiessen raises the point that the public is not enthused by the Trump administration’s policy of separating children from their families.  In addition, Mr. Trump has, according to Mr. Thiessen, not done enough to separate himself from “ethno-nationalists.”

Searching for the “surprise”….

The new information that traders should be looking for is political behavior on the part of the Trump campaign that seeks to turn the above negative factors onto positive ones; that describe the factors either as strengths or transmitting benefits to the electorate.  Mr. Trump will have to be seen as spinning these narratives into political packages the electorate is willing to purchase with the vote.

 

 

 

 

 

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Blacks need a new political law game

The political battle between the Executive and the Congress has been intense to say the least over the last twenty-seven months since Donald Trump took office.  With post-Mueller report hearings ramping up next week, the saga only promises to continue way into campaign season.

My friends and family have expressed varying degrees of interest, with a significant number of opinions fueled more by emotion and less by critical thinking.  For example, the constant reference to “collusion”, a term that has no legal meaning, is disconcerting because it provides an example of how people are ignoring the particulars (even when readily available for examination) and rolling with the globs of misinformation thrown onto the plate most times by the mainstream media.

Black congressional leadership wasting political power …

What should also be disturbing is how two of the highest ranking blacks in the Congress, Maxine Waters and Elijah Cummings, are spearheading the charge in the impeachment debate.  Their distaste for the sitting president is evident, but what is less evident is how the use of a potent political law instrument as impeachment is supposed to translate into any increase in political power, wealth, or capital for black people.

If anything, House Speaker Nancy Pelosi has expressed caution about pursuing impeachment, appreciating the argument from some inside her party that pursuing impeachment could have a negative impact on the Democrats’ ability to oust Donald Trump from the Oval Office in November 2020.  Mrs. Pelosi’s hesitancy on impeachment should have provided Ms. Waters and Mr. Cummings an opening to show leadership and go against the impeachment grain, not because it would be in line with Speaker Pelosi’s sentiment, but as a signal that the energy expenditure behind impeachment does nothing for their prime constituency: black people.

When you are marginalized, you agitate …

With at least 51 voting members in the U.S. House, blacks in the Congress are in a position to be the pivotal swing vote on a number of issues including impeachment. Numerically, black members of the House, where articles of impeachment would originate, could clog the wheel by holding back approximately 20% of the Democratic vote.  With this leverage, black congressmen could attempt concessions from either the House leadership or from President Trump, though it is less likely that the black caucus would try to negotiate with the President for fear of becoming a pariah in the Democratic Party.

Therein lies a telling dilemma. If the premier block of black congressmen cannot leverage numerical strength without fear of reprisal, what good is their strength?  Another irony is that for a group of congressman that represent a marginalized group, their fear of marginalization within Congress does not put them in a position to do more for their black constituents.

Maybe the answer is to stay outside the box …

On the other hand, maybe blacks, particularly those who embrace their status as marginalized, need an approach to political law that allows them to carve out their own independent niche; one that unapologetically finds the seams or openings in the political economy in order to access capital or create substantive platforms for constructing true communities. Current black leadership is too afraid to do that.