The Black Swan is Black Swanned
Donald Trump’s 2016 election qualified as a political “Black Swan” — a highly improbable and unexpected event that also proves to be highly influential. It was such a surprise that some people still have not accepted the result! Those holdouts can take comfort that Trump himself is being Black Swanned by the first global pandemic in over a century.
In January 2020, Trump’s re-election looked not only realistic but probable, despite a rocky and controversial tenure. His economic record was very strong with growth, good jobs and rising incomes. Quarterly G.D.P. growth averaged 2.5%, slightly above the last two Presidents. Unemployment fell to 3.5% of the labor force, the lowest measure in fifty years, with strong gains in the manufacturing sector. Median household income had grown 6.8% in 2019, according to the Census Bureau, the largest annual increase on record; notably, Black and Latino workers were seeing the highest gains.
As he had promised in his campaign, Trump achieved these results by defying the conventional wisdom which had long asserted that a lower than normal unemployment rate would bring high and damaging inflation, but inflation under Trump remained low at a little over one percent.
New wealth was also growing. Since Trump took office, the Dow and S&P 500 indices had both risen almost 50% and the Nasdaq was up almost 70%. Home prices had gained almost 20% in value, and consumer confidence and corporate profits were both high. These economic results were often overshadowed by Trump’s public statements and governance style, but if the winning political strategy “it’s the economy, stupid” held true, it would have been stupid to bet against Trump. In fact, political betting firms had a Trump victory at 4:5 odds in mid-January.
The coronavirus changed all that in a matter of weeks. U.S. G.D.P. fell almost a third in the second quarter and overall national unemployment rose to almost 15% before falling back to 7.9% in September. 12.6 million workers still remain unemployed. The data may show the U.S. is no worse off than others — the U.K. economy saw gross domestic product plunge over 20% in the second quarter, roughly double the rate of the U.S. and Germany — but relative performance won’t matter to a voter out of work and out of money.
Trump’s reelection path now looks very narrow, but not impossible. The electoral map shows twelve “toss up” states: the industrial block that Trump narrowly won in 2016 (Ohio, Michigan, Wisconsin, Iowa, and Pennsylvania), potential flips from Trump to Biden (Arizona, Florida, Georgia, North Carolina, and Texas), and potential pickups for Trump (Minnesota and Nevada). Together these represent 195 of 538 electoral votes. To win, Trump will need to outperform in specific voting blocks, as he did in 2016 (at that time with non-college educated white men and women), and focus on winning those battleground states where the virus and its aftermath are weakest.
This year Latinos are expected to be the nation’s largest racial or ethnic minority in a U.S. presidential election, with 32 million projected to be eligible to vote. If Trump can perform well with Latino voters — or Biden fails to generate enthusiasm, as some polls are showing — Trump may be able to retain Texas and Arizona, where Latino voters comprise 30% and 24% of the electorate respectively, and hold onto Florida with its prized 29 electoral votes and where Latinos comprise 23% of eligible voters.
In the industrial belt, Trump appears likely to lose Pennsylvania and Michigan which were badly damaged by the pandemic and saw unemployment spike to 16% and 24% of the workforce. But Trump has a chance of winning where the virus has been less deadly and employment has improved — Iowa and Ohio — and he could likewise pull off a surprise in Minnesota or Wisconsin. If he picked up one of those states, Trump’s victory path would then need to rely on historic Republican strength in the South to keep North Carolina and Georgia on his side.
If he pulled it off Trump would once again beat the odds. He would win 269 electoral votes — the exact same figure as Joe Biden.
No candidate would have reached the 270 electoral vote threshold, and the presidential election would be decided in the House of Representatives for the first time since 1837. Each state’s congressional delegation would have one vote and whichever candidate, Trump or Biden, won the majority of states, would become president. The U.S. Senate would elect the new vice president, deciding by a simple majority between Kamala Harris and Mike Pence.
The result could be a split between a Democrat and Republican in the top jobs of the new administration. And that would be one Black Swan too many.
