Source: Barron's
Author: Matt Peterson
On Thursday (May 30) local time, former US President Trump was found guilty in the “sealing fee” case, beginning a new era full of uncertainty in American politics.
The New York Manhattan jury found all 34 counts of falsifying business records against Trump, and the relevant sentences will be handed down on July 11.
Prior to that, there were some situations in US politics this year that could disrupt people's traditional views. For example, opinion polls showed that voters were unwilling to attribute the increase in average living standards to the current president.
Voters are more supportive of leaders who have made them materially richer used to be one of the clearest analytical guides in American politics. Now, voters have to face the fact that another major party candidate has been convicted. This is the first time this has happened on the eve of a presidential election.
Trump is expected to appeal the ruling.
Investors' most recent concern is probably whether to buy or sell Nvidia (NVDA) rather than whether Trump has been convicted. However, the difficulty of predicting the November election results and the huge differences in policy between the two presidential candidates increased the risk of a political storm in November.
It is normal for uncertainty in the election year to put pressure on economic growth. If the White House changes hands, this will indicate that federal policy may change, thereby reducing the willingness of companies to make long-term spending decisions. Trump's conviction may exacerbate the impact of this factor, as it will be some time before we know how the incident will unfold, making it more difficult to predict what the potential “Trump 2.0” will look like.
In recent months, polling agencies have been trying to determine whether Trump's conviction would bring new information to voters. According to a poll released by Quinnipiac University (Quinnipiac University) on May 22, 70% of voters are at least somewhat closely watching news related to the trial, and only 6% of voters who support Trump say they are unlikely to vote for him if he is convicted. In contrast, 24% of voters say they are more likely to vote for Trump if he is convicted.
Will this be enough to influence the win rate of the swing states that will determine the election results? It should be pointed out that the prosecution is based on the theory that Trump's team believes his actions are important to voters. According to the government, adult film star Stormy Daniels (Stormy Daniels) was paid to keep the public aware of Trump's relationship with her until November 2016. Furthermore, Trump's public image has been damaged by the “Access Hollywood” (Access Hollywood) video that discriminates against women. (Trump previously stated that payments to key witness Cohen were for legal services and denied having had an affair with Daniels.)
Voters are already aware of the above two stories in 2020, when Trump lost the election by a narrow margin. Furthermore, after the trial began, ugly stories about Trump's actions made headlines for weeks, but he still slightly led the national polls.
One reason for this situation may be that national opinion polls do not reflect well how voters will react in November, especially now that there are still a few months until the general election.
National opinion polls don't give a good picture of how voters will react in November because trying to understand the changes that will take place in the lives of hundreds of millions of Americans in the next four years through a “yes” or “no” decision made in November is too high. Of course, Americans will continue to do this.
John Dickerson (John Dickerson), a well-known journalist from CBS (CBS), explained his views on what he called an “impossible president” in 2018. He wrote, “America is a country obsessed with a president, so much so that we are undermining our own ideals of constitutional democracy.” No one person, whether physically, mentally, or logistically, can undertake all the tasks the President is required to undertake. “No one, male or female, can represent the competing interests of the 327 million American citizens,” Dickson wrote. (The current US population is 337 million.)
Some people definitely think that their vote is a recognition of one person's morality; left-wing voters who threatened to abandon Biden because they support Israel acted in accordance with this idea.
But in the literal sense of the word, “a vote for president” (a vote for president) means far more than giving a candidate the right to sleep in the Lincoln Bedroom (Lincoln Bedroom) of the White House; with it comes command of the military, control over administrative agencies, nomination of judges, countless regulatory powers, etc. Victory is also a recognition of Americans' loyalty to society — we all want to support teams that can win.
In this sense, it is easy to conclude that voters should not support a damaged candidate. In addition to this, Trump promoted the malicious idea that “court results are the result of politically-driven political persecution.” An appeal is also likely to change the final outcome. Anyone who believes in America's strong legal system needs to take into account that this system may also make mistakes due to good intentions.
This is not to say that being convicted means that Trump will win or lose the election. Everything is still undecided. Only when polls continue to show that public opinion is taking a decisive step in one direction or another can a more clear analytical judgment be made, and realistically speaking, that point will not arrive until November 5.
But that's not to say convictions aren't important. If Trump loses, some voters will think it is because political elites are joining forces against him. In an already “calcified” political system like America, it is difficult to determine what this angry energy will bring, although it is easy to see where the pressure points are. The US Congress has played little role this year, and is still on the brink of default. If voters continue to support candidates who refuse to cut their debts, then this situation will be difficult to improve.
What if Trump wins? The rule of law supports the health of the market and the rich returns brought by the market in recent years. The S&P 500 index is made up of “profit machines” that thrive in difficult environments, and they will not be easily eliminated. Once a president like Trump thinks the legal system has been “weaponized” to deal with his own presidents, the ability of American companies to thrive will be tested; however, these effects may not be immediately apparent.
The most important thing is how American companies will be affected. For the broader political system and the US economy, the outcome of this defining moment of Trump's legal issues will be uncertainty.
Editor/jayden