Thursday 02/04/2020

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Don’t mention the Donald

Chief Economist

The US election campaign has been drawing a great deal of attention. As things stand, Mrs Clinton is leading the race to the White House. Barring any accident, she will succeed Mr. Obama and become the 45th President of the United States.

Whereas election polls were close around the timing of the Republican Party convention in July, Mrs Clinton is currently leading by around by 4-5 percentage points. At this point in the campaign, no single candidate has ever been able to reverse this kind of losing streak into a win. Of course things may be different this time. The race tightened somewhat over the last week. What’s more, Mrs Clinton isn’t particularly popular and November 8 is still more than two months away. Who knows what will happen between now and then?

Nevertheless, at this stage, any comparison with the Brexit campaign seems off the mark as polls back then clearly suggested that the race was extremely close. As a result, predicting the outcome ahead of the June 23 Brexit referendum felt like tossing up a coin as we pointed out here. This is clearly not the case right now. Anyway, arguably the best place to keep a close eye on US political developments is Nate Silver’s FiveThirtyEight website. The American statistician has built up an outstanding track-record in forecasting the performance and career development of baseball players. And in the 2008 presidential election, he successfully predicted the outcome in 49 of the 50 states. Based on polls, the state of the economy and historical data, his model now states that Mrs Clinton’s chance of winning the elections stands at 70%.

Barring any accident, she will become the next president of the United States. What the implications will be for the US economy and the world is another question. Mrs Clinton’s economic program contains lots of measures that make sense, ranging from a fairer tax system over fixing America’s infrastructure and slashing carbon pollution. But what she will be able to achieve in a country where bipartisanship has become increasingly rare remains to be seen. Furthermore, as always, the political agenda will be largely determined by occurring events. This reminds us of former British Prime Minister Macmillan’s response when asked what is most likely to blow governments off course: ‘Events, dear boy, events’.