The order of topics in US presidential debates reflects the importance of issues that American voters are concerned about, with economic and inflation issues ranking first, followed by immigration issues and foreign policy, which are related to the core interests of Americans. Traditional values such as abortion and gun rights are less emphasized, reflecting to some extent the "understanding" of the two parties: focusing on the main contradictions that affect core interests and reducing the priority of vague and unreal "value cognition" issues.

According to Gallup's statistics, 36% of Americans believe that economic issues are the most important concern, far higher than 9% during the 2020 election and 27% during the 2016 election. In terms of specific concerns about the economy, inflation is the most prominent because it directly affects the quality of life and economic security of the American people. Although from a macro perspective, the growth rate of the US economy and corporate profits are both performing well, the underlying structure exhibits significant differentiation.

Large and small enterprises face completely different situations, with the former experiencing income growth and the latter facing headwinds. There is also differentiation within the residential sector. Some residents benefit from the dual increase of stock and real estate asset income, but the middle and lower classes without additional asset income or debt, young people just entering society, and non-employed groups who need to take care of their families, all bear more economic pressure from inflation.

Compared to before the pandemic, US residents' labor income increased by 24.7%, property income by 26.7%, and transfer income by 35.2%; among them, rental income increased by 40.3%, dividend income by 37.0%, and social welfare transfer payment by 33.5%. This reflects that residents at both ends of the wealth spectrum (the top 1% and the bottom 50%) account for a higher proportion of total social wealth, but the discontent among the middle class with the current situation has increased. US economic survey data shows that there is a significant difference between public perception of the economy and the actual economic situation, a phenomenon known as "atmospheric recession."

Current President Biden does not have an advantage in handling inflation issues. Since the end of 2021, inflation has become one of the focal issues of public attention, which is undoubtedly a huge challenge for Biden. After each inflation report is released, the White House will promptly comment on it, something that never happened during the Trump administration, and it reflects Biden's clear understanding of the importance of stabilizing inflation for his approval rating. Former President Trump cleverly used the differences in the inflation burden of different ethnic groups to point out that minority groups such as African Americans and Hispanics are more affected by inflation.

Trump's active outreach to traditional Democratic supporters is not "beating the egg against the stone" but a targeted move to stimulate the increasingly complicated "identity politics" labels in the US. Today's American voters are no longer limited by traditional single labels (regional, racial, class), but rather have more complex and diverse identities and political orientations, and capturing different "identity political" labels is the essence of US politics.

Interestingly, "identity politics" as a product of the post-modern turn of the Western left wing began with the new social movement of radical left wing and ended with the institutionalization and performance of center-left parties in the globalization era, ultimately leading to a resurgence of right-wing populism and the collapse of the liberal foundation. Today, the left, center, and right of the political spectrum are all undergoing mild reforms: the Republican Party begins to sympathize with ethnic minorities, and the Democratic Party begins to build walls against immigration, while the primacy of political positioning is blurred by the primacy of votes.

After eight years of political baptism, Trump no longer shows his extreme populist side and no longer emphasizes the difference between himself and the "traditional politician" in debates, as he did in 2016. Over the past eight years, Trump has already become the mainstream representative of the Republican Party and has become increasingly familiar with the interest-exchange thinking of the "traditional politicians" he despised.

For the current US President, the television debate is a double-edged sword, and they are more often defenders who need to first defend their policies, while their competitors are relatively relaxed and only need to focus on attacking the weaknesses of the incumbent. Although Biden's performance in the television debate was not satisfactory, we cannot ignore the incumbent's election advantages, which can be seen from the recent French elections.

After experiencing a disastrous defeat in the European Parliament elections, Macron chose to dissolve the French parliament for early elections. Although the election prospects were not favored by public opinion polls, the election results showed a "counterattack from a desperate situation." The second round of voting results in the French parliament on July 7 showed that the far-right seats were far lower than expected, which reflects the incumbent president's significant advantage in negotiations and coordination between political parties.

In today's Western society that is politically insensitive, it is difficult to accurately evaluate the support rate of incumbents in Western countries. Many elections remind us that the advantages of incumbents are often underestimated. As the incumbent president, Biden always has more policy tools at his disposal than his opponents, especially when the economy and stock market are performing well, he has even greater policy space to use. The large fiscal deficit and seasonal spikes in May and the high growth in government employment in June are evidence of Biden's determination.

However, current polling data in swing states is not optimistic for Biden. The latest polling shows that Biden is behind in all seven swing states and is behind by an average of 4 percentage points. Trump won the 2016 election by attracting support from independent voters, but his failure in swing states in 2020 was also a key factor in his defeat.

But we still need to be cautious about the outcome of the election and should not draw conclusions too early. The formation of swing states is closely related to their economic and demographic structures. The economic structures in these areas have blended old and new, making the issues that swing state voters pay attention to more diverse, and their identity political labels are also more complex. At the critical moment of the election, every sudden issue may trigger different identity political labels, thereby affecting the direction of the election. For example, in 2016, Hillary led in the major polls but ultimately lost due to the email scandal. In 2020, Trump faced the sudden challenge of the pandemic. There are many issues that may affect the outcome of the election this year, such as Biden's son's crime, Trump's criminal prosecution, oil prices, and the Israeli-Palestinian conflict. We cannot predict the key time before the 2024 election when a sudden label is triggered, leading the American election to develop in an unpredictable direction.

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For bystanders, the US election is a chaotic system with an unpredictable direction.

The current stagflation in the US economy has been contributed to by both former President Trump and current President Biden. Trump's contribution to stagflation is mainly on the supply side, by maintaining the interests of traditional US manufacturing industry through tactics such as trade decoupling and tariffs, resulting in the rise in the cost of living for residents and production costs for enterprises. Biden's contribution to stagflation is mainly on the demand side, through transfer payments to low- and middle-income groups, and industry subsidies for weak sectors (manufacturing and infrastructure), which also increases inflationary pressure and damages economic efficiency.

Both presidents are two sides of the same coin. Although they have different policy orientations and values, they face the same challenges, such as widening income disparities, outdated infrastructure, and deindustrialization. They both support expansionary fiscal policies, with Trump inclined to promote the economy by cutting taxes and deregulation, while Biden prefers to support vulnerable groups and inefficient sectors through fiscal subsidies.

Therefore, whoever is elected, it will not change the already-opened era of large-scale government finance in the US, nor will it change the new inflationary cycle that the US economy has entered. The low-interest rate era before 2018 has gone forever. Trump had a positive attitude towards US stocks during his term, and Biden's performance on the US stock market during his term was also relatively strong, so the election results seem to have limited risks for US stocks, unless the losing party fails to recognize the election results as in 2020, as the market prefers certainty.

Risk warning:

There may be statistical deviation in US opinion polls, unexpected weakness in the US economy, the US Federal Reserve's monetary policy exceeds expectations, and an unexpected increase in household debt pressure on US residents.

Edited by Jeffrey