The Election is Over, Economically and Politically, What's Next?

Mish

Like it or not, the election is over. An overwhelming majority think their side won, but Biden will be in the White House. What's next?

Politically Speaking

  1. Democrats were projected to win the Senate. They won't. Even if Democrats win two Senate seats in Georgia runoffs (very unlikely), that would only make the score 50-50. 
  2. Democrats were expected to pick up seats in the House. Instead, Republicans picked up 5.
  3. Republicans gained two new state trifectas in New Hampshire and Montana, after the GOP ran up majorities in the New Hampshire House and Senate. A state trifecta is when a single party controls both chambers of the legislature and the governorship. 
  4. Republicans flipped the Montana governorship. 

No Silent Support For Trump

The above 4 points show why Republicans lost the presidential election. 

The one word synopsis is "Trump". 

If you would have asked me to guess the outcome of the election based on those points, I would have guessed wrong.

Add it all up, and voters were sick enough of Trump to replace him. The silent majority disliked Trump so much they voted him out with split-ticket voting. 

Excellent Speech by Biden

"All those of you who voted for President Trump, I understand the disappointment tonight.  I've lost a couple time myself. But now, let's give each other a chance."

Best speech Biden even made.

AOC Threatens to Resign

Business Insider reports AOC said she might quit politics, as some centrist Democrats blame progressives for House losses.

I have no doubt the addition of Kamala Harris to Biden's ticket was a huge mistake. I said so at the time.

The Blue Wave fizzled due to progressives and the Red Wave fizzled because of Trump.

If AOC were to resign, I have but two words "Good Riddance".

Progressives are delusional if they believe the election would have been better for them if only Biden were more progressive.

Judging from the results, Trump might have won.

Delusion is rampant on both sides.

Economic Gridlock 

Voters wanted gridlock (or at least no progressive nonsense). Gridlock they will get.

Biden will struggle getting much of his agenda passed in Congress.

No Progressive Shift

  1. No progressive shift on taxes.
  2. No AOC-fueled green shift except the minimum Biden can do by mandate.
  3. No Supreme Court packing. 
  4. No progressive Covid giveaway.
  5. No total bailouts of corrupt states like Illinois. 

Covid Relief

There will be another Covid package, but it will be bipartisan not an insane giveaway. That's a good thing. 

Deficits Out of Sight

In regards to point 1, deficits will balloon out of sight. 

Increasing deficits would have happened under Trump as well, but it will be more pronounced under Biden.

Drug Policy

It's time for legalized drugs. We don't have them now primarily because of Trump.

If nothing else, Biden can undo some of Trump's policy by mandate. Better yet, we may see direct legislation.

Iran

Iran is another area where Biden can make a difference for the better.

It's time for the US to end these economic sanctions. 

Realistically they are an act of war by Trump on Iran. Trump's economic blockade, forcing the entire world to go along, was far worse than any naval blockade in history. And naval blockades are an act of war.

Every US ally and even the US military said Iran was honoring the terms of Obama's nuclear accord. 

Covid

Biden will support more testing and that is a good thing, 

Yet, it is very difficult to predict with any certainty the future economic impact of Covid. Will there be a vaccine? That works? Will states opt for more lockdowns? 

6 Key Economic Takeaways 

  1. There is nothing more the Fed can do. Stimulus is up to Congress but it will be governed by compromise. See The Fed is Stuck On Interest Rates, Unable to Do Anything
  2. The progressive agenda is dead for now. 
  3. An end to the Iran economic embargo rates to negatively impact oil prices.
  4. Deficits will soar.
  5. Soaring deficits rate to be good for gold and hurt the dollar, albeit not as much as a full progressive state bailout.
  6. No one can say when the stock market bubble will pop. I long ago gave up trying.

Mish

Comments (137)
No. 1-50
Robertmp
Robertmp

Thought decision was electoral college, early December, press not mentioned in Constitution

EGW
EGW

It looks like Biden has it in the bag. If Republicans find enough fraud and get the state legislatures to certify Trump as the winner, then maybe Trump will get his 2nd term. I see that as highly unlikely, but not impossible. Since there will be gridlock, it doesn't matter too much who is President.

QTPie
QTPie

50-50 split in the Senate DOES mean democratic control of the Senate given that Harris will cast the deciding vote. That said, Democrats’ chances of winning both seats in GA are not high.

Scooot
Scooot

Maybe he could overhaul the election process so there isn’t another farce like this one.

ColoradoAccountant
ColoradoAccountant

Mish is the only other person I am aware of that has stated that blockades are acts of war, other than me and the Geneva Convention.

Six000mileyear
Six000mileyear

I'm pleased with gridlock as the election outcome. Both parties have been digging the country into a deep hole, so gridlock takes away the shovel until centrists are elected.

caradoc-again
caradoc-again

In time Biden will regret winning as would Trump.

There is no gracious way out of this mess that is likely to become much worse before improving. Only unity of purpose will speed recovery.

PecuniaNonOlet
PecuniaNonOlet

What’s next? Coronavirus is a wildfire now, 2021 will likely be far worse economically and we may end up with 500,000 dead (mostly boomers).

Until covid is “resolved” there is nothing else on the docket.

Mish
Mish

Editor

"Thought decision was electoral college, early December, press not mentioned in Constitution"

So why the flying F did Trump twice proclaim he won big?

Eddie_T
Eddie_T

Thanks for the report.....my random-*ss thoughts below. Corrections welcomed

If the Democrats were to get both Georgia seats (admittedly unlikely) then they’d have VP Harris to break a tie and give the Dems a de facto majority in the Senate...that might temper some of your expectations.

AOC won’t quit. That would be too much luck to ask for......And Ilhan Omar won with 57% of the vote in her district...That part of the party is here to stay.....Biden won’t cater to them...other than probably giving women and minorities most of the cabinet positions.

The dollar will stay stubbornly stronger than it deserves. Dollar milkshake theory.

Gold could make a good run.....but central banks have an interest in it not going wild.....and they have the means, still, to do something about it, imho.

Stocks will go up as long as the Fed supports that, I hope. If they lose control a whole lot of people will get killed. Likewise RE in growth areas.

Many small bits of good news on COVID, like the preventive nasal spray. Hope that works...but it’s still months....probably a year or more away. No vaccine before the spring....best case. Will we get one? I’d say it’s unlikely, in spite of all the money gifted to Big Pharma. But maybe...if we’re lucky.

We could be hit really hard before the winter is over. Lockdowns will have to happen if enough people are sick and dying. Hopefully we won’t lock down.....were in deep enough doo-doo as it is, economically speaking.

It could be that we won’t see 2019 levels of economic health for a long time....and it will hurt some other countries worse than us.

Mish
Mish

Editor

Anyone posting any more bullshit from Distributed News or any other ridiculous conspiratorial source will be banned.

AnotherJoe
AnotherJoe

Mish I think your analysis is wrong. I identify 3 voting groups:

  1. Disenfranchised blue collar no college degree
  2. Real Republican conservatives (fiscal, social conservative)
  3. Liberals.

I think group 1 voted for Trump and Republicans in general
Group 2 voted against Trump (Biden, Libertarian, blank) but Republican for the rest
Group 3 mostly Democrat (President and down ballot)

There was massive voting of all groups. That helps Republican down votes and helps Biden

Now why do I think this? Look Florida easy win for the Republicans. Their fighting call was "Biden = Socialism". That motivated groups 1 & 2.
Yet, the increase of the minimum wage to $15 was won (%61) of the votes. Now who can argue that setting a minimum wage is not Socialist?

Also you say the following: " Gridlock they will get." but later you say: "Deficits will soar" How can they soar if you have gridlock? Also do you really think that Americans know how budgets are created and approved? Americans in general blame the presidents when there are deficits so I doubt that they know in general

Mish
Mish

Editor

Mish
Mish

Editor

njbr
njbr

2-1/2 months of nothing but deterioration due to Trumps herd immunity pursuit--by the time inaguartion day happens, this country will be on its knees.

What happens after that entirely depends on the Georgia run-off.

Mish
Mish

Editor

davebarnes2
davebarnes2

"It's time for legalized drugs. We don't have them now primarily because of Trump."
I HATE Fat Donnie from Queens®, but he is not the primary cause. It is chicken-shit politicians of both major parties. No one wants to be labeled "soft on drugs".

LewisM
LewisM

Mish writes: "Increasing deficits would have happened under Trump as well, but it will be more pronounced under Biden."

This conventional wisdom never fails to amuse me. Republicans since Reagan have run up huge deficits - they've always come down under Democratic presidents. Hell, Clinton almost balanced the budget in two terms - and then along came Shrub with his tax cuts and 4 trillion dollar Middle East adventures and we've been in a tailspin ever since.

njbr
njbr

“By the time the president-elect takes office we’ll probably be at the apex of what we’re going through right now,”
@ScottGottliebMD
predicts about the current #COVID19 trajectory.

Adds, “This isn’t going to be over in 2021" but predicts next year will be much better than 2020

Sechel
Sechel

The people spoke. They wanted Republicans but not Donald Trump. This has to sting. Voters weren't rejecting the Republican party but they did reject Donald Trump. Jim Clyburn lays the blame on "Defund the Police" and the progressives. Clyburn's been around the block before. He knows the political landscape. AOC and the progressives had this idea that they would hijack the Biden presidency. Biden is not a progressive and left wing cabinet members will not get Senate confirmation. AOC is just throwing a tantrum.

We will see Democratic Centrist Biden administration. He'll resort to executive orders to accomplish much of his agenda now that the Senate seems out of reach. Biden has laid out his agenda, Paris Accord, rejoin the WHO reinstate the environmental regulations Trump axed and while hasn't said so I suspect a new look at Iran.

Boris Johnson's goose is cooked. While Biden will continue to value a strong U.S.-U.K. military relationship Biden will look to economic ties with the Continent feeling the U.K. became less relevant after Brexit. Biden also will not look kindly if the U.K. doesn't respect the Good Friday agreement.

AOC is a lot like Donald Trump. She tweets too much. Values social media more than rolling up her sleeves, writing , sponsoring and getting legislation passed. Seems to me she just tries to add her star power to other people's work. She already signaled she's getting bored with the House and wants to move to the Senate. I think that's far fetched. NY is not ruled by a progressive base, Democrat yes, but not progressive.

Sechel
Sechel

Biden has said his first agenda is Covid. He's already building a task force to translate his agenda into an action plan

Mish
Mish

Editor

@LewisM "this conventional wisdom never fails to amuse me"

Then please think.
What are the odds of tax hikes?
What are the odds of more Covid stimulus.

It really gets tiring refuting blatant silliness when I laid it out in the article.

Sechel
Sechel

Iran wants the U.S. back onto the accords. I'm in favor but I'd like to see Biden extract a concession. A pull back from their proxy wards in Syria , Lebanon and Yemen would be a good start. Maybe an agreement on their missiles. Biden could have some leverage.

numike
numike

By trusting in its scientists, Australia is down to zero new COVID-19 cases

'Regardless of who you vote for, most Australians would agree their leaders have a real care for their constituents and a following of science' https://nationalpost.com/news/world/by-trusting-in-their-scientists-australia-is-down-to-zero-new-covid-19-cases

LewisM
LewisM

Biden will assuredly rejoin the Iran nuclear deal. It was one of the main foreign policy triumphs of the Obama-Biden administration. The Europeans will offer some face-saving "clarifications" and we'll be back regardless of how big of a hissy fit Netanyahu throws.

As for Brexit, Boris has no more leverage. Biden won't look the other way while the UK shreds the Good Friday agreement. It'll be a hard border down the Irish sea and a unified Ireland sooner rather than later.

Sechel
Sechel

We left out the dreamers are back.

Wish the editing function was back. I'd prefer adding to previous comments

Sechel
Sechel

pretty amazing how many nations are welcoming Biden. Japan, Continental Europe, China, Iran all view Biden as being positive. Losers will be Russia, Israel Saudi Arabia, U.K.

Greenmountain
Greenmountain

Surprised none of you have commented on the poison pill hanging there. In order to get the tax cuts for corporations, it included only temp tax cuts for individuals so those tax hikes need to be addressed in the next year or so - Another little gift from our current leader. This gives both sides some leverage to bargain - interesting times.

Realist
Realist

What comes next for the economy, the stock market, the pandemic:

The pandemic: It is going to get much worse for the two months left in Trump’s tenure. Expect record daily cases many times over the next two months. In spite of better treatments and care, expect deaths to skyrocket in areas where hospitals become overrun.

Once Biden is in charge, expect a plan to deal with the pandemic that will finally bring numbers down during 2021. Then expect the first vaccines sometime in 2021, which will further help being numbers down.

How about the economy and stock market? What are the historical stats? What is reality?

GDP – since 1945, GDP growth averaged 4.35% under Democratic presidents, and 2.54% under Republican presidents

GDP – breaking down GDP growth into 3 different categories

  1. Democrat president and legislature – 5.2%

  2. Split president and legislature – 2.3%

  3. Republican president and legislature – 1.2%

Quote from Trump in 2004- "I've been around for a long time and it just seems that the economy does better under the Democrats than the Republicans."

Recessions

  1. Every Republican president over the last 100 years ( since Teddy Roosevelt in the early 1900s) has had a recession in their first term. Four Republican presidents suffered through 2 recessions while in office, and Eisenhower presided over 3.

  2. The last time a recession began under a Democrat president was Jimmy Carter in the 1970s.

Stock Market – since 1947, stock market growth averaged 10.8% during Democratic administrations, but only 5.6% under Republican administrations

I do not know if history will repeat. But since I expect Biden to actually deal with the pandemic, I also expect the economy and markets to do better with Biden, then they would have with Trump.

Casual_Observer
Casual_Observer

Trump is toast after January 20th. Multiple cases lined up in federal and state courts agaisnt Trump and Trump organization. No wonder Deutsche Bank wants to pull their loans and seize his properties.

amigator
amigator

I disagree...
I am confused.... 50-50 split in senate is a Win for the White House does not VP break ties?

No progressive shift on taxes.
Biden will raise taxes. I think that is the one thing he said he would do.

No AOC-fueled green shift except the minimum Biden can do by mandate.
Agree just because much makes no sense!

No Supreme Court packing.
I think you have to wait and see. Any big decision that go against JB's buddies will put a lot of heat on the man.

No progressive Covid giveaway.
What is this ? Are we not going to have another bailout?

No total bailouts of corrupt states like Illinois.
JB will bailout any and all states that is what he has been doing for the last 47 years!
Ok maybe not a direct bailout but many of the policies has participated in for has led us to the condition we are today!

Mish
Mish

Editor

"I am confused.... 50-50 split in senate is a Win for the White House does not VP break ties?"

Yes but

  1. Democrats only have a chance in one of those seats
  2. Assume a miracle
  3. There are several Democrat senators who are fiscally responsible so any of those votes will not get to 50-50 for there to be a tie-break

Most likely way legislation would pass is bipartisan not a tie-break ram through

JJ Johnson
JJ Johnson

Has Maduro come out and said the real president is Sanders yet?

Greggg
Greggg

You missed a big one Mish. My biggest dream come true - Jared Kushner is out an his ass.

XZBD
XZBD

Mish & others, really do you slam youngsters whenever they think out of the box and their idea is not perfectly formulated? AOC is just a youngster who has the right general idea that fossil fuels are on their death bed (conventional peaked ~ 2005 and extracting oil out of the source rock hasn't shown itself to be all that profitable ~ - $240 billion of resources that could have gone to our children's future). Yes it could be framed better and yes solar and wind by themselves are not going to replace oil, but they do extend its usefulness and when we finally admit Weinberg was right that scaling up reactors designed for submarines was a dumb idea, as he warned us in the 60s, and small MSRE are the way to go, micro grids will become even more viable then they already are. If the government is going to spend money it needs to do so on things that are going to be productive in the future and generate income so rather then spend that money on welfare, creating jobs and training for those people so they can have useful lives seems like the right way to go. And how does anyone expect US businesses to compete on a world market when they have to cover the ridiculous healthcare costs of their employees? Yes, I agree with you, the plan needs to be critiqued and should be carefully watched as it develops to encourage a more reasonable implementation. I just believe all the wisdom you have garnered could be disseminated in a way that would actually help her formulate a real strategy rather then default back to supporting the status quo, which you have to admit doesn't look all that promising with the current crowd running the show.

nzyank
nzyank

Mish writes: "Increasing deficits would have happened under Trump as well, but it will be more pronounced under Biden."
So why do deficits matter? Deficit spending should be more pronounced right now to mitigate economic damage caused by virus. I agree a tax hike right now would be stupid and is not on the table. Deficit spending is good as long as it is sensible - e.g. not on border walls, war on drugs, military exess. Infrastructure, job creation and education spending are what is needed. Inflation won't occur unless there is a significant pick-up in demand, which I don't see happening for a long time.
Republicans want Biden to fail, so they can take back the white house. To do this, they will do everything possible to block spending, so that the economy and stock market tanks. They will justify this with fear-mongering about debt levels, just as they did with Obama. Voters fall into three camps:

  1. Those that understand that deficit spending benefits the economy but want a republican white house at all costs, so support senate blocking spending even if it is bad for the economy.
  2. Those that really believe deficit spending and debt is bad. This is a group the Republican party nurtures very effectively.
  3. Those that realize deficit spending is appropriate when economic conditions are poor - this group is seems effective at selling its case.
Johnson1
Johnson1
  • Change the child tax credit from 2k to 4k
    Forgive student debt up to 10k per person. Bernie wants all but the $10k might just happen.
  • Increase the next stimulus from $500 billion proposal $2 Trillon.
  • Rent subsidies for families who do not fall under section 8. If your rent is over 30% of you income, the government will subsidize some of your rent
  • $15k tax credit for new home buyers and add even more benefits on top for people in the public sector like teachers and first responders. Additional incentives if you are a public employee. You know the ones that make about 20k more than the average private employee and has a pension fund.
  • Families making less than $125k should not have to pay for a their child's education at public colleges.
  • Provide more tax credits for ACA for low income people
Sechel
Sechel

It may not be over. Seems Trump wants to raise doubt. Ben Ginsberg believes Trump wants to slow down the process , attempt to stop the electoral college from certifying and then calling on state legislatures to overturn cast votes. its extremely probable this fails but its not a 100% certainty and Trump doesn't care what chaos he sows

FromBrussels
FromBrussels

...all kind of songs pop up in my mind these days.....yesterday during Biden's moving speech it was 'Reunited' (Peaches & Herb) and right now it is 'Gridlock Holiday' (10cc) ...or was it Dreadlock.....well, never mind it will last 4 years, anyhow....

KidHorn
KidHorn

I don't think the election is over. Trump still has a chance. A small chance. Probably < 10%.

There's cheating in every election, but I think it's possible the democrats went way over the line in this one.

sharonsj
sharonsj

"The Blue Wave fizzled due to progressives and the Red Wave fizzled because of Trump." I disagree. The blue wave fizzled because of (a) centrist Democrats with no clear policy and (b) ads saying that Biden "cared" but with no clear policy. Apparently there was a red wave because Republican turnout surged. Finally, exit polling was a real eye-opener with even Fox viewers saying they wanted Medicare for all, a $15 minimum wage, and something done about climate change (all progressive agendas).

kicka55
kicka55

What happened to you? - you once were a decent read - your hate for Trump and pro lockdowns, contract tracing (loss of basic rights) disappointing. You really have lost the plot and my support. Enjoy the ride to socialism....

silverdog148
silverdog148

The most surprising outcomes of this election are not whom won, but rather the reactions to the election and how social media is impacting and shaping the thoughts of the electorate and the public at large especially on the right.

It is my firm belief that social media will be heavily regulated/curtailed/censored in the coming years within the USA/Worldwide by governments both the left and the right. I don't think they realized the Pandoras box that has been opened, by opening the door to scalable tribalism, in the past the danger was nationalism, but we've atomized smaller now to the smaller tribal level, right now it's holding together on the right to a national movement but it will no doubt atomize further and when it does watch the fireworks(literally).

If allowed to play out I don't believe any stagnant country can stay together medium term under unfettered social media, it just encourages social level atomization as that's what appeals and drives engagement, it hits you directly. We see this currently with Trump supporters but it's not a Trump specific phenomena which most on the left believe, it's a human phenomena.

I was out this weekend near a major downtown this weekend and saw the Trump supporters first hand contesting the vote, they are pretty real and what is driving them is not actually Trump but rather a firm belief that they are right and everyone else is wrong, you may laugh but this is very real, this type of available behavior is going to be seized on more and more by amoral political personalities(which is 95%+ percent of most politicians).

Interesting Times Ahead

CEOoftheSOFA
CEOoftheSOFA

I think the Senate will be purple. The democrats should be able to find a couple RINOs to vote for nearly everything they want.

BobSmith
BobSmith

While I think there is a 99% chance of Biden becoming president, 2020 might give us more surprises. Biden dies from Covid? Trump resigns? The Senate President disqualifies Biden electors from contested states on December 14th which would lead to a major constitutional crisis?

Gordionknot
Gordionknot

Existential Fear and Trembling are the facts of this undecided election. We fear the botched election was a result of unconstitutional mail ballots that had attempted to steal the landslide of President Trump. And the trembling is on the Democrats who know a fake media, fake polls, fake software hacking, and fake social platforms could not create a blue wave. There are pitfalls to a premature, fake coronation. Dec 8 is the date we will know the truth, Mish. As Yogi Berra said, It ain't over until the fat lady sings!

chimpun
chimpun

@Mish why do you think the deficit will increase more under Biden than under Trump -- because of a next-round covid handout? Trump did plenty to increase the deficit even before the pandemic...see his 2017 Tax cuts

Captain Ahab
Captain Ahab

To answer Mish's question, what is next? Buyers' remorse!

CEOoftheSOFA
CEOoftheSOFA

I suspect the Democrats can find a couple RINOs in the Senate to pass all but the most radical parts of their agenda.