Grinding It Out: The American elections are reaching their final stage

The first Monday in September – Labour Day – is traditionally seen as the final stretch in the US election campaign. Hundreds of millions of dollars more will be spent in the next weeks but as far as the presidential contest is concerned, the evidence suggests that in most cases (1980 was a notable exception), the direction of travel established now will not change much before November. This has, nonetheless, hardly been a conventional election year, so the past may not be much of a precedent. The one assertion that can be made with confidence about the contest between Hillary Clinton and Donald Trump is that it is unlikely to be an edifying spectacle. It will be a brawl to the very bitter end.
A month ago, however, it did not look as if it would be much of a competition whatsoever. The Republican convention that nominated Mr Trump was a surreal affair with a media flap about the extent to which his wife (or to be more exact, her speechwriters) had lifted the words of Michele Obama at the Democratic convention eight years previously dominating initial proceedings, to be followed by a stunning display of dissent from Senator Ted Cruz in refusing to endorse Mr Trump. In the week after that, the candidate himself managed to become embroiled in an unnecessary war of words with the family of a slain Muslim US solider. It finally seemed as if ‘the Donald’ had shot from the lip once too often. Mrs Clinton opened a lead in the polls of around eight points. Game over, surely?
Apparently not. Over the course of the past four weeks that advantage has been cut in half and is at about the same place as it was before the two conventions. Mrs Clinton is the favourite but not by a crushing margin. The evolution of events has come after Mr Trump made a series of changes at the top of his campaign team which seem to have resulted in (relative) discipline at his end, while Mrs Clinton all but disappeared in August, focusing on private fundraisers rather than public events, and the void was filled by yet more negative stories about her misuse of e-mail accounts and even more so late last week by the explanation of her actions that she offered to the FBI.
This saga has been supplemented by evidence that donors to the Clinton Foundation found that their kindness was rewarded not merely in Heaven but at the State Department while Mrs Clinton ruled the roost there. The Democratic contender now has an ‘approval’ rating of minus 14 percentage points. This would normally be fatal for an aspirant to the White House except that in this instance her rival has a score of minus 24 percentage points, an almost catastrophic position to be in, were he not running against her. One has to hand it to American democracy. It is some system which out of 320 million citizens has managed to find the two most polarising people in the nation to choose between for the presidency.
The presidential battle thus cannot be declared over. If Mrs Clinton thought that she could just run down the clock and await Mr Trump to blow himself up, then she would be mistaken. Her opponent is the one making the news. The normal rules do not apply to him. His trip to Mexico last week, for example, although it had a slapstick quality to it, allowed him to look faintly statesmanlike and to reinforce the message that he was the man who cared about illegal immigration and would act on it. The betting markets suggest that he has only a 24% chance of entering the Oval Office. The same markets had Leave as low as 15% on the very day of the UK referendum on EU membership.
Despite a poor August, a Clinton victory is still the likely outcome
Yet for all her flaws as a candidate (not necessarily as a President, which is a different story), the most likely result is a Clinton victory, albeit by a margin that most foreigners will regard as almost incomprehensibly modest. The current four-point spread looks like her floor and his ceiling. The demographics of the electorate in presidential election years tilts towards the Democrats as the white percentage of voters falls consistently over time and the Hispanic proportion of it rises (it is a different matter in mid-term elections where the turnout is much lower and much whiter).
Her electoral college strategy is also straightforward. She simply has to hold all the states that Barack Obama won when re-elected in 2012 and look to add the odd state that went once to her husband in the 1990s such as Arizona, Georgia and North Carolina. She has vastly outraised Mr Trump and at this rate will outspend him by a huge margin unless he suddenly turns on the taps of his own bank account (assuming that he has not wildly overstated exactly how wealthy he is).
The three debates between the two rivals on 26 September, 4 October and 19 October will play to her strengths and enable her to pitch to younger, more metropolitan and secular Republicans, who while they would normally prefer their own party’s message on low tax, may recoil from Mr Trump out of sheer embarrassment as many of the same voters did when confronted with Sarah Palin in 2008. It is probably more a case of grinding it out than suddenly turning around her own popularity rating but if sheer persistence makes for a great occupant of the Oval Office then she is a Lincoln in-waiting. The relevant concern is whether victory would allow her any mandate other than not being him.
The Republicans are likely to survive a Trump defeat in the congressional elections
Much of the mainstream Republican Party will spend the coming two months paying lip service to support for the Trump campaign while concentrating on retaining control of the US Congress. In theory, this should not be that difficult an exercise. The Republicans did exceptionally well in the 2014 mid-term elections (aided by a particularly low turnout) and enjoy majorities of 247-188 in the House of Representatives and 54-46 in the Senate. The fear was that if Mr Trump were to lose by a substantial margin (10 points or more), he might drag down congressional Republicans with him.
That concern is not so intense today. Almost no-one believes that the Republicans will lose their majority in the House of Representatives although it is highly likely that they will lose some seats. The most probable outcome is that they will be somewhere in the 232-237 seat range, a setback but not of a scale to prevent them holding a de facto veto over much of domestic policy. It would mean that any tax increases (including on carried interest) proposed by Mrs Clinton would be rejected.
The struggle over the Senate is more unpredictable. Whereas the whole of the US House is elected every two years, only one-third of Senators (who serve six-year terms) is contested each cycle. The states that cast ballots this year last did so in 2010 which was a strong mid-term election for the Republicans who made a net advance of six seats in the chamber. As a consequence, 24 of the 34 Senate seats available this time are being defended by Republicans, including some in states such as Illinois and Wisconsin which Mrs Clinton is expected to win comparatively easily. Losses of some form are hence close to inevitable. The question is will the Republicans lose control of the Senate? Even if the Democrats held it by the smallest possible margin (50-50 with the casting vote held by Tim Kaine if he is Vice President) the impact would be seismic, not least on the argument, which has been deferred until after 8 November, as to who will succeed Anton Scalia on the Supreme Court. The numbers in the Senate will also have influence over the conduct of US foreign and trade policy.
It is still a tough call but the Republicans have reasons to be hopeful. It looks as if they will hang on in Florida and Ohio. This still leaves them vulnerable in Indiana, New Hampshire, North Carolina and Pennsylvania (Illinois and Wisconsin are all but lost) with a chance of a gain of their own in Nevada. If so, then the ultimate scenario to emerge from these elections will be renewed (perhaps enhanced) stalemate in Washington. Which might be the best one for business and the broader US economy.