SGH Hosts US Elections Call with Political Expert Dr. Wendy Schiller

October 13, 2020

Sassan Ghahramaani:       I think people will be slowly hopping on, but why don’t we get started and I can start with the introductions, which is the part that people will not mind missing if they come a little bit late, and I’m sure they want to hear your talk.

But I wanted to thank everybody. Welcome to the SGH Macro Advisors Call with Professor Wendy Schiller. I would like to thank everybody who is joining us on the call for taking part of their valuable day. It’s going to prove to be a very interesting discussion I’m sure. But most of all, I want to thank Professor Schiller for agreeing to do this call for our friends and clients here in the U.S. and overseas.

In a different time and date, we would be doing a round table maybe over a couple glasses of wine, but we have discovered this Zoom thing, which actually works quite well for getting different time zones, so hopefully we will carry it on without a glitch. Thank you very much Rachel from SGH for organizing and coordinating the whole event.

So let me start with a brief bio of Wendy Schiller. You received the bios in the invitation, so I’m not going to really repeat a lot of what’s in there. But first and foremost, I have to say by just from a personal perspective, I have seen Wendy speak on various news organizations and in the media. I had a chance to join a call with some alumni at Brown University a little while ago. And I was always very impressed by her objective analysis, which I think is extremely important these days, and really appreciated that she has agreed to do this call for us.

Wendy is the Chair of the Political Science Department at Brown University, my alma mater. She has taught there since ’94-’95 I believe, which is after I left, so it tells you how long ago I was there. I did not have the opportunity to learn from her while there, but many students are very fortunate to have that opportunity. She has a PhD from University of Rochester, actually her PhD in political science, and her concentrations are congress, political parties and elections, and political philosophy.

I also looked at some of the courses that she teaches at Brown, which is very interesting and very appropriate to our discussions now. The American Presidency, American Political Process, American Politics, American Institutions, increasingly important to all of us here, Parties and Interest Groups, Philosophy of the Founding Congress, and Public Policy.

Anyways, just a matter of housekeeping, we have set the call up so that Wendy and I are live and you can hear us and Rachel as cohost, everybody else is on mute. That is just so that we don’t pick up any extraneous noise, I hope you appreciate that.

We have received some questions, but we wanted to have this interactive to the extent that we can in this day and age of technology. And so, we welcome you after her talk to send questions via the chat function. The chat function, I’m a little bit of a neophyte, but if you look down on your screen, some screens it will show up. If it doesn’t show up, if you hit More, I believe it will show up there, and you can just hit Chat. When you hit Chat, you can choose the recipient, and I believe just make sure that it doesn’t go to everyone. I mean if you don’t mind, but just people for the sake of privacy [inaudible 00:04:26], you just click onto myself and I can read off your questions as they come in.

So anyways, thank you very much again Wendy. As I was saying before the call, we look forward to hearing all the answers from her on who’s going to win the presidency, what states, by what margins, and the Senate, and how long it’s going to take, and what’s going to happen to the markets. Anyways, all kidding aside, thank you very much. I’m going to turn it over to you and put myself on mute while you speak.

Wendy Schiller:                 Okay great. I thought I would try to sum all those things up in about 20 minutes so we have plenty of time for Q&A, and I just want to sort of set the stage, particularly since this is an audience that has people from all over the world and in the States just in terms of how do you sift through what to know or what’s happening now.

One of the most fundamental things in terms of the outcome, so we’ll just work backwards, traditionally November 3rd, or the first Tuesday in November, has always been this D-Day for elections. We think at the end of the day, maybe 2:00 in the morning, at the latest 3:00 in the morning with the exception of the year 2000, we’d know who won the presidency. The media outlets used exit polling typically to call elections. Sometimes that goes correctly, sometimes it doesn’t as we’ve seen in history, but that’s the way we think about the election. Who’s going to win? Who’s winning? Who’s losing?

This year is really fundamentally different even from 2016, and it’s fundamentally different because of the enormous broadening of early voting. And I want to sort of explain exactly what that is because it’s happening now, and so we have to think about the dynamics of this election in terms of what votes are being cast and when.

Typically we think, “Oh, there’ll be an October surprise. There’ll be something the weekend before the election,” like the Comey letter for example in 2016. But now we’ve got a circumstance because of COVID, and also because of some electoral changes in key states since 2016, that have opened up early voting, early voting in two ways.

One is what we call vote by mail. Vote by mail is essentially absentee balloting. They’re pretty much the same, there’s some differences this year in criteria and procedure, but essentially it’s a paper ballot. It is mailed to somebody, they mail it back. And I’ll get to that in one second in thinking about what happens in figuring out who’s going to win.

Early in person voting. There was early in person voting, not extensively, but a pretty good amount in 2012. It certainly helped President Obama in some key states, particularly in Ohio. And 2016 saw the contraction of early in person voting. And when I say contraction, I mean you went from two weeks let’s say in Ohio to 10 days.

And why would that make a difference, and why has it changed for 2020? It makes a difference because if you think about how we count votes in America and how we award delegates in electoral college, and I’ll talk a little bit about that in a minute. What happens is you count up all of the states votes, and with the exception of Maine and Nebraska, whoever wins the most votes, a plurality in the state, or a majority but you can win with a plurality, you get all of the electoral college delegates, and you need 270 to win, so you need those.

So turnout in key counties is essentially extraordinarily important. You saw this in 2016, Trump turned out the vote in rural counties much higher than anybody had expected, and turnout in more urban and more city-based counties, that was down. So that hurt Hillary and it helped Donald Trump.

With early voting, let’s take Cleveland. Cleveland is a heavily African American city. It tends to be in a county that votes democratic. Going from two weeks to 10 days eliminates a Sunday? Why is that important? Because black churches are fundamental to turnout in American politics, and black churches would bus their parishioners after services on Sunday to the polls. They would provide transportation all day long and make it part of the event, and then people would go and vote.

When you eliminate an entire Sunday from that endeavor, you eliminate voting. You don’t suppress it necessarily, but you eliminate that edge.

So think about the various mechanics of turnout in every single county in let’s just say seven or eight swing states. This year, Ohio just started early voting. They have minimally three weeks of early in person voting, in addition to vote by mail. Three weeks of in person voting, that’s three Sundays, and that’s also available in a lot of other states now.

Georgia, you might’ve seen some articles about Georgia started in person voting. Michigan, Minnesota. North Carolina starts next week. Arizona’s already started. When you think about that, that has changed the nature of what we think about November 3rd. The election isn’t November 3rd, the election is today. The election is tomorrow, the election’s yesterday.

And now I’m echoing, but I guess we’re back. Okay, great.

So when you think about that, that’s what’s so crucial about guessing who’s going to win and where is now we’ve moved to the mechanics of turnout. Who is turning out? Who is mailing back their ballots? And later on in the Q&A, I’ll show you a website, U.S. Elections Project, that tracks the early voting. There are more than 10 million early votes having been cast already, it’s only October 13th. And in some cases, close to a quarter of the entire turnout in 2016 already happened today.

So this really makes you think, “Okay, does it really make sense to say somebody’s leading in the polls and they’re winning.”? I always reject that, I resist that. Nobody is winning until the votes are actually counted. That’s the second part of this procedural process, it’s really crucial to understanding swing states in particular.

When you think about who counts votes and when they count votes, and you think about the Trump majority in some of these states, this is really important, so I’m just going to give you just a little bit of reading off a slide. So there are Florida, Ohio, Michigan, Pennsylvania, Wisconsin, Minnesota, North Carolina, Arizona, Iowa. That’s essentially the large set of swing states.

So Trump, as many of you may recall, he won Florida, he won Ohio, he won Michigan, he won Pennsylvania, he won Wisconsin, he won North Carolina, he won Arizona in 2016. Now he won by razor thin margins in some of these more Midwest industrial states, which would be Michigan. He won by a pretty big margin in Pennsylvania, and Wisconsin was pretty tight.

Why does it make a difference? So right now it says Biden is leading, he’s leading by 10 points in Wisconsin. He’s leading by eight points in Michigan. I am extraordinarily skeptical of these state polls simply because of the experience of 2016, that’s the basic fact. And I just remember Hilary leading by this amount as well about three weeks before the election in these states. That’s why she never went to Wisconsin, she thought it was in the bag. I mean that’s the classic campaign mistake, but still that’s something you think about.

Why do we think Biden won’t suffer the same fate as Hilary? These overestimated polls, more people get out the door for Trump than do Hilary Clinton? Well, early voting, early in person and of course COVID-induced extension of vote by mail. This changes so much about what we think happens on Election Day versus what’s happening now.

When do they count the votes? This is mechanics and people think, “This may not matter to me.” If you want to know, if you’re curious, when each state counts their votes, how do they process vote by mail? Early voting is processed immediately. So that is processed, your vote is recorded, and it’s counted. It’s kept solid, nobody releases those until after the polls close on Election Day, but that vote has been tallied. That’s done, that’s not going to cause any delays, all these extra early in person votes. Not at all, that’s being done.

The absentee, the mail in ballots. For most states, the process begins minimally about three to five days before Election Day. And in some cases, like Rhode Island for example, as soon as they get the ballot, they open it, they certify it, they count it. They record it, it’s done, they don’t have to wait until Election Day to count it.

So you have variation across states as to when they actually count these absentee ballots. Like I said, millions of people have already voted. Requests are now tallying at 67 million absentee vote by mail ballots. 67 million. That’s about 45% of the entire turnout of 2016, which was 136.7 million votes cast for president, 138 million votes cast altogether. Some people chose not to vote for president.

When you think about that number, it is more than two times the number that voted by mail in 2016. About 30 million people voted by mail in 2016, a lot of people voted by mail then. But this is at least double, or two and a half times the size. So it’s a huge burden.

However, many of these states that I’ve just mentioned, Arizona for example, starts opening and counting vote by mail ballots about seven days before the election. So they already do this, and they’ve had vote by mail for a long time. They have a snowbird population, people who live in Arizona a couple of months a year, six months or so, and then they go back up north. So if they’re not home, they actually can get it mailed to them automatically, they don’t even have to ask for it.

My mother happens to be one of those people, so I know this for a fact, she doesn’t have to ask for it. She gets it automatically in Arizona, and they start counting seven days earlier. So it’s a western time zone and you may think, “Oh, they’ll come in late.” Well, they’ll come in late by east coast standards, but it should not be an issue for them to be counting the ballots that come in by mail.

However, Pennsylvania and Wisconsin. Pennsylvania, and I’m not going to share my screen right now, but I’ll do it later, Pennsylvania in terms of mail ballots requested, 2.6 million mail ballots requested in Pennsylvania. And in Wisconsin, 1.3 million mail ballots requested. What does that tell you? 2.6, 1.3. Neither state counts or processes, even verifies their absentee ballots before Election Day. One of them does it starting at 7:00 in the morning on Election Day, one of them does it only after the polls close. Millions of ballots don’t get verified and don’t get counted in two crucially important swing states.

So that is mechanics, that’s the way we do things in the States. I have a long conversation about whether that’s good or bad. And so when you think about that, people are worried about legal challenges. We can talk about that in the Q&A. It’s mechanical vote challenges, how do you certify that many votes?

And some states have absentee ballots where you can only put your drivers license signature. In other words, they count it against your drivers license, and then they look at your signature on your ballot. How many of us sign differently? Who knows when you got your license? Maybe you signed it in a hurry. It may or may not look anything like what you’re signing on your ballot.

So now, particularly the democrats, are giving people instructions on vote by mail to say, “Take out your license. Look at the way you signed your license, and sign it the same way so there’s no verification issue.” Because what happens in verification is if they throw out the ballot or they put it aside, then it takes a couple of days if not a week if not more, contact the voter, give the voter an opportunity to correct the ballot, or in some cases just throw it out, just reject it. This is going on right now in North Carolina.

I know people think, “Well, they’re going to try to corrupt the system. They’ll steal ballots from the drop boxes. They’re going to intimidate voters.” We see a lot of the early in person voting right now, not in Florida by the way which is known for voter intimidation, and we don’t see a lot of this yet. We’re seeing record turnout. Georgia started early voting, and they had record turnout yesterday, just hours and hours of people waiting online to vote.

So I don’t think it’s intimidation that’ll be a problem, particularly on Election Day, when literally in some states it’s estimated that only 20 to 25% of the entire turnout will actually show up on Election Day to vote. So 75% of a lot of states, those voters will have already cast their votes.

So that really shows you how quickly this election is happening. The President is out there really trying to rally the republican base, and he should because they’re very loyal in the way that they vote. They’re very dependable, very reliable. But telling people to wait until Election Day is not the winning electoral strategy this year, with the exception perhaps of Wisconsin and Pennsylvania. But even so, the enormity of that number of ballots means that it’s just highly unlikely.

And I’ll discuss potential scenarios where maybe we would who will win Pennsylvania and Wisconsin, but we’re not going to know for a while. And some of these states, including Ohio for example, as long as your vote by mail is postmarked by Election Day, they will continue to accept and count ballots from anywhere from a week, from a day in Texas for example, to two weeks in places like Ohio.

So when you think about that, you think, “Well, we may not know who won literally without any legal challenges at all, we may not know who won this election before two weeks after November 3rd.” Particularly of a certain generation, we have to really reset how we’re thinking about this election dynamic, and why Biden’s out on the trail, why Trump is out on the trail. He’s going to Iowa for a reason. Iowa started early voting October 5th.

Trump is a lot of things, politically instinctively he’s pretty good. He gets where he has to be. So that’s where I would say to pay the most attention is early voting, returned ballots, and then how and when do they count them. The National Council of State Legislatures is a fantastic website, They have a terrific set of charts on voting. Procedures in every state, how do you challenge, all the things that you want to know if this election comes down to it.

Now remember, there were always absentee ballots. And anyone old enough to remember Bush V. Gore understands that absentee ballots can play a role in any election year. There are always rejected ballots, and there are even sometimes rejected ballots when you vote in person. But I think this is really just important to understand that the enormity of this in particular swing states is what is I think making democrats really concerned about the perception of voting.

Here’s, and I’ll stop talking soon, here’s where things might be different than you would’ve expected in 2016 under the exact same circumstances with COVID and the expansion of early in person voting and the expansion of vote by mail. New Jersey, for example if some of you live in New Jersey, they went all vote by mail.

So here’s one of the things to think about is when you’re worrying about how things are counted, think about North Carolina for example. They are under a consent decree having been sued, a consent decree, and they have a democratic governor. They had a republican governor in 2016, they have a democratic governor who’s running for reelection and is like five to seven points up in North Carolina against his closest rival, so Cooper’s going to get reelected.

So when you think about this and you think, “Okay, how does that work?”, well ballots are rejected, and they’re getting rejected in much higher rates for African Americans than for white voters. There are five states that are still under the Voting Rights Act that still have to report race and gender when you register to vote. You’re required to give these pieces of information, so they actually know what percentage of votes could be cast or returned or rejected by race.

So four times as many black voting by mail are rejected as white. They’re getting that ratio down, they’ve been working on it. They had a rejection rate of almost 5% a week ago. Now the rejection rate is down to about 2.4%. That can make a difference in North Carolina in particular. So when we’re thinking not just about the presidential race but the Senate race, we really want to pay attention to those kind of voting mechanics.

Fortunately, North Carolina has now agreed that they will contact every voter whose ballot’s been rejected and give them an opportunity to mail in a new ballot that can come in as late as November 12th. So even if that’s only 2.4% of a single county, if it’s predominantly black voters who are rejected, and we know that black voters tend to go with democrats, about 88% of all black votes cast are typically for the democratic party, that can make a difference in North Carolina, that they’ve opened it up and allowed people to vote and get those votes counted by November 12th is a change.

The same thing is true of Michigan, Wisconsin. Pennsylvania had a democratic governor in 2016, but Wisconsin and Michigan have democratic governors and democratic attorney generals. So I think that really makes a huge difference in terms of how you see any litigation playing out, how you see the mechanics of the elections accused of being corrupted or tainted, and just thinking about institutional levers and how you “swing an election” or manipulate an election. The republicans had bigger tools to their advantage in Wisconsin and Pennsylvania and Michigan, all three had republican governors in 2016.

I think that’s just crucial. Georgia has a republican governor who was the secretary of state as of 2018. He managed to throw 53,000 people off the rolls a couple weeks before that election. I’m not sure that would’ve meant that he won or lost, but he knows how that system works. And they have touchscreen in Georgia, which apparently is having some problems. But then again, they have massive early voting turnout in person.

So this is what will decide this election. Trump can go on the trail all he wants. Biden can do as many town halls as they want. At this point in time, because everybody is voting now and because states according to the U.S. Constitution control the time, manner, and place of elections, watch what states are doing, watch the ballot input, the ballot counting, the numbers. This is what’s determining the winner of this election.

So just to wrap up, and I’m happy to share my slides, I’m happy to share my sources with you, one thing that is also … Two things to watch for going forward, and this holds for the Senate races in particular, and I’m happy to expand on that in Q&A, and polling.

So I told you I don’t really buy the Midwest polling, I’m just not confident that it’s accurate. I do actually think the North Carolina and Arizona polling looks pretty good because it makes perfect sense. North Carolina’s totally tied within the margin of error. Arizona keeps shifting, but it’s been shifting ever so slightly towards Biden in the last couple of weeks, which goes with the general polling in Senate races which has the Senate democrat about eight points up to 10 points up over his republican incumbent rival.

So when you think about that you think about the polling, look at senior polling. And there’s two startling statistics. One is that 72% of people over the age of 65 vote. There are a lot of people in this country over the age of 65, and with that kind of ratio, they overpower the voting of young people. When I say young people, I mean people between 18 and 29. 48% of those people vote. They overpower as a whole the demographic of Latino voting. 47.5% of all registered Latinos vote in presidential elections. That’s been the same for a long time.

So thinking about the interests of seniors, in every election for 20 years they have gone to the republicans between 8 and 12%. Republicans have a solid advantage. Mitt Romney had 56% of the senior vote, Barack Obama had 44% in 2012, just as an example. And they did the same thing for Trump versus Hilary Clinton.

This year in every poll, national, local, in the average of polls since June, Biden has been tied with Trump amongst seniors. Tied. Now, margin of error on these polls is usually between 3 and 4%. Some polls have him up 10% or 15%, I’m not really buying that either. But the fact that every poll consistently goes towards this tie means that’s a net loss of an advantage of eight to 12 percentage points among people over the age of 65 for Trump and possibly the republican party.

This will matter a great deal not just in Arizona and Florida, we think of that as large retirement communities, Iowa, Pennsylvania, Ohio also have a significant percentage of their populations that are over the age of 65. So if that actually is accurate, and I think it’s accurate because it’s stayed so stable, and I think we can have a conversation about why seniors would be defecting from Trump at the moment, it probably has a lot to with COVID, but still thinking about that, and that is really something I think those are votes I know will be cast and this is a break with the trend that has not gone up and down, that hasn’t really veered. The latest ABC News polls had Biden up by 1%, that’s kind of within the margin of error. It doesn’t really matter, they’re tied, that’s still a net loss for Trump and the republicans.

And that will matter not only in the states you think it might matter, but across some other really key swing states.

The other statistic that I’ve been looking at all along is disapproval ratings. You want to see how intensely people don’t like the other person running for president. And what’s fascinating is that compared … Trump has a disapproval rating, he’s upside down nationally, it’s considerably higher than his approval rating, but intense negatives on Trump are larger than intense negatives on Biden. So when you say strongly disapprove or just disapprove or you’re neutral.

So Biden has been hovering with the onset of the campaign a little bit higher up in the high 30s at the most for strong disapproval, but basically been anywhere from 28% to about 35% strong disapproval. Hilary was well into the high 40s on strong disapproval. Biden’s been running about 10 points less on strong disapproval.

And what does that tell you? Well, it doesn’t mean that people who are republican are going to vote for Joe Biden. But what it means is that section of the democratic party or independent voters that just couldn’t stand the idea of a Clinton presidency, those people don’t exist this year. They don’t exist. They may not like Kamala Harris or Biden, but they don’t dislike them intensely.

And so that bubble of people who vote in a fairly regular way, I’m talking about relatively well-educated people, suburbans, and even independents without a lot of education, they are not as poised to go against Joe Biden as they were ready and waiting to go against Hilary Clinton, and they won’t hold back from voting. A striking poll just came out saying 78% or 87% or something of democrats were planning to vote for Joe Biden. That’s almost [inaudible 00:29:15] with republicans who are typically between 90 and 93 of all republicans vote for the nominee. That’s much higher than Hilary Clinton.

So these are the specific things I’m looking at right now, and these are the ways that I’m tracking the probabilities of the election. And I’ll finish with this projection since I’ve been asked for projections. I actually still think it’s a tossup. I don’t think anybody’s actually winning or losing, I do, but I think the conditions of the electorate and how we’re voting suggest that if Trump were to win, it would be a very narrow victory. It would be just like 2016, and will probably [inaudible 00:29:50] to very successful challenges to ballots in some of these big swing states.

And if Biden wins, I think Biden … Biden wins by a bigger margin, maybe 3%, maybe 3.5%, maybe coming close to Obama, and here’s why. The latent democratic party coalition is bigger than the latent republican party coalition. When all people who say they either affiliate or have affinity for the democratic party are counted, they outnumber republicans.

So if you have near equal voting rates of loyalty to Biden/Harris that you do for the republicans for Trump, Biden can win. And Biden wins bigger because those turnout numbers have to be bigger, particularly among African Americans, for Biden to even have a chance.

So that’s why I don’t see Biden winning narrowly, why a bigger turnout is good for Biden, and why if Trump wins, which is still I think a fairly decent likelihood of happening depending on what happens in places like Wisconsin and Florida, it will still be narrow, and more narrow than a Biden victory.

So that’s what I have to say at the moment, but I’m happy to answer any questions or share any of my slides or data with you.


Sassan Ghahrama…:       Thank you very much Wendy, sorry about that, I was on mute, for that excellent presentation. I am sure people would appreciate seeing your slides. I don’t know how we effect that.

Wendy Schiller:                 I can show you the slides now, or I can send them to you and you can distribute them. Let me show you the early voting, just to show you where this is. I hope everybody can see it.

This is from the U.S. Elections Project, it’s run by Professor Michael McDonald out of the University of Florida. He’s been tracking elections and turnout for many years. He’s a stand-up person, there isn’t a lot of bias here. He’s very active on Twitter under U.S. Elect Project. He gives updates, you’ll see Sunday’s update.

But this is his map, and this is what I was talking about before. This is total mail ballots returned, and I’m just going to give you some numbers on … He’s got racial breakdown in North Carolina for example. So total mail ballots returned and requested, so this is how many were requested, 75 million, so that’s increased since last week. 75 million people have requested mail in ballots.

This is what we’ve turned out so far in America, 10.7 million. Look at Florida, 1.78 million people in Florida have already voted, and let’s compare that to the mail ballots requested in Florida, 5.6 million. So think about that ratio, and it’s only October 13th. So it’s really important to think about this.

But let’s look at the turnout already as a percentage of 2016. Florida, nearly 19% of the turnout in 2016 has already voted. And in Michigan, it’s 20%, and Wisconsin’s 23%. And in Virginia, it’s almost 25%. So when you think about that, 25% of the turnout in 2016, which was not as high as previous years, but it’s only October 13th, and that’s really what’s striking to me is the enormous number of votes cast.

Sassan Ghahrama…:       And is it a fair assumption, Wendy, I think the conventional thinking is that most of the mail in ballots democrat, is that-

Wendy Schiller:                 Thinking about this, let me just go back to North Carolina here just to make this point. I would be cautious if I were somebody thinking about that. Let me see if I get you … North Carolina is 478,000 ballots have already been returned. And when we think about the requests in North Carolina, 1.3 million requests.

What does that tell you? In 2016, democrats returned more than two to one. About 250,000 ballots cast in North Carolina, and more than two to one had been early voters, the democrats. And Hilary lost North Carolina by a decent margin in 2016. So let me just show you what Hilary Clinton lost North Carolina by, and [inaudible 00:34:21]. So here’s North Carolina, Trump won 50.5 to 46.8%.

So people were thinking, “Oh, look at all those early return ballots. Democrats are going to win North Carolina.” Wrong because republicans tend to vote on Election Day, but this is what early voting in person changes because when you think about this demographic, democrats are going to plan to vote by mail. Yes, more democrats have technically requested vote by mail ballots, that’s for sure. In 2016, you saw a drop-off in loyalty. In other words, some democrats voted for Donald Trump, and some people didn’t return their ballots.

And the second thing is that now with early in person voting, you may have republicans who plan to vote early. They may not be voting by mail, but they’re going to get their vote in early in North Carolina.

So I don’t think anybody should take the early voting numbers as any kind of indication that the democrats are winning.

Sassan Ghahrama…:       Following on that, can I press you a little bit on the notion of the upper Midwest, which was so critical to Trump’s election victory in 2016, and again if you can expand on why you are a little bit more cautious about the polling there in particular as opposed to some of the other states?

And maybe if you could talk about the road to 270. Some people in the Trump campaign are talking about a western strategy now, which I don’t know, it doesn’t seem to me like it really adds up. But what are the real swing states right now? I think we look at kind of a big list of them, and where should we be looking I guess-

Wendy Schiller:                 Well let’s look … So I’m just going to share my screen for a second. Let’s look at what happened in 2016. It’s a little hard to see each of these states, but republicans win more states than democrats generally in these elections. And we look at Pennsylvania, Wisconsin, Michigan in terms of the votes there.

So one of the reasons I’m wary of the Midwest polling is that … And then an associate of mine is pretty high up in terms of polling, and he said that getting core Trump supporters to answer the phone is very hard to tell. Cell phone or landline, hard to do. People who respond to online polls, such as YouGov, which is an enormously large online polling, they tend to be better educated or they tend to be more progressive, and so that’s a little bit slanted. And then getting them to answer the phone.

So if you think about it Fox News, if they poll and they identify, you want to look at Fox News polling because you think to yourself, “Well, if they’re introducing themselves as Fox News, a diehard republican Trump supporter will likely give them their answer, or a republican in general, or rural voters, or older voters who tend to watch Fox News and who might support Trump, although not this year as we’re seeing.”

So I just think they may be missing people who very much intend to vote. And what we’ll see though is that given the numbers of absentee ballots requested in Wisconsin, they may not vote on Election Day. People talk about this blue shift after Election Day, but I am thinking that Trump voters who are older who may be worried about COVID, they’ll get their ballot in early. They’ll figure out a way to vote earlier rather than wait until Election Day.

So I still think that the polls are missing voters who are mistrustful or don’t want to come out and say that they’re voting for Trump, or just not answering the phone. As hard as polling companies work to do this, it’s hard to do, it’s hard to get people to respond that way. So I think that’s one of the things I’m concerned about.

What offsets my concern? If you say to yourself, “Well why are you so worried?”, what offsets it? What offsets it is the polling among women across the country has been very consistent. Since June, women particularly who live in suburbs who have fairly high turnout, remember women are 53% of the voting population, men are 47% of the voting population in terms of turnout, women in the suburbs all over the country, North Carolina, Wisconsin, Pennsylvania, Michigan, all across the country have been shifting towards Biden since June, and there isn’t the animosity towards Hilary.

You don’t hear a lot of women saying, “I’m not voting for her. I don’t like her.” So because of that, the suburban vote gap between republicans and the democrats in terms of women is huge, it’s historic. Recent polls in some states have it at 24%, that’s Wisconsin’s most recent number, polling in the suburbs in Wisconsin women are divided 24% more in favor of Biden/Harris than Trump. That to me maybe driving that Biden number in the polls in Michigan and Wisconsin and Pennsylvania.

So then you think to yourself, “Okay, those women will vote, and women tend to vote more than men do, but it could be that men are waiting to vote on Election Day and they’re not answering the phone.” So I think that those numbers for Biden are driven by women. Women are reliable voters, and you have seen in 2018 that women change the entire electoral playing field by getting out the door. And the women who voted for Trump, many of them voted for democratic candidates in 2018.

So that may be driving those bigger numbers, which is a reliable indicator. But then you think what if men simply just wait and get out the door and vote who aren’t answering the polls and vote on Election Day for Trump.

Sassan Ghahrama…:       So would you say … I think people look at 2016, and there’s a narrative that the miss wasn’t that big, which to me is a little bit silly because the miss on electoral colleges miss in the final result, which is what really matters. And I think there’s an assumption that the polling firms have tried to compensate for the hidden vote so to speak.

But your sense is that granted there are these very strong dynamics which are steady and real with the female vote and the suburban and all that. But that as far as polling methodology that we really probably haven’t corrected for that, or it’s just very difficult to-

Wendy Schiller:                 It’s very difficult to correct for. The New York Times will run, Nick Cohen will run, a table, will say here’s the polling now, here’s where if we figure out how wrong we were in 2016, here’s what the polling would look like. In other words, when you update for inflation, what’s the actual numbers that Biden’s leading, and you look at that and it’s much smaller. It’s really probably somewhere between two and five points in most places that Biden is leading. That’s probably his lead, and again that’s still a margin of error of three percentage points.

So it’s still narrow for Biden, which is why Biden’s pushing turnout. If you get turnout that’s corresponding to some of these poll leads even if it’s 5%, if that’s a big lead and that turnout goes up … For example, African American turnout. If it is 64% or higher, Biden wins. Flat out, that’s just the way it is. If you look at everybody since Clinton and Carter, but really Clinton in terms of vote turnout, when the African American vote is that high, it offsets the loss of the democrats among white men. They’re down to about 44% I think of white men who intend to vote for Biden/Harris. But African American voting, if it’s 64% turnout, pushes all those numbers up.

And so that’s another thing in the Midwest. We have a lot of cities with high concentrations of African American voters. In Milwaukee in 2016, 4% decline in vote. In Pittsburgh and Philadelphia in Pennsylvania, 4 to 5% decline in African American vote. If the polling and the vote turnout on African Americans matches up this year, I think the process for Biden in the Midwest will be much better. And we’ll see some of that right now in Michigan for example in early voting.

Sassan Ghahrama…:       Great, thank you. Switching gears a little bit Wendy, this is by [inaudible 00:42:47] a group of investors, financial market participants, and so there’s a lot of interest in both the presidential race and the congressional race, the Senate in particular. The narrative as we were chatting before in the markets, for example on the fiscal stimulus package, has been that the larger Biden’s lead is in the polls and the more the likelihood of actually getting a democratic sweep in the Senate, that we have a higher likelihood of a very large fiscal package in February.

So maybe you could just share your thoughts with us on the Senate, and the chances of the Senate switching control from republican to democratic, and what your thoughts are there. I think people are aware there’s some tight races and even people like Lindsey Graham and so on who were thought to be safe seats. But what are your thoughts on that and-

Wendy Schiller:                 That’s a great question. So I do think … So when you think about what … So the long game. Let’s think about the long game in the Senate. So let’s talk about if the Senate stays republican, I think it stays republican 51 to 49, and I’ll tell you why. And I think even if the democrats win, it probably only shifts to 51/49.

When you think about the Senate races, it’s a combination of national forces and turnout among democrats, but it’s also unpopular incumbents before Trump. So that’s something to think about. Cory Gardner in Colorado, for example, has just never been all that popular. He’s running against a governor who’s popular, Hickenlooper, who’s raised a lot of money. And Colorado just elected a married gay man with children as governor in 2018, so Colorado is shifting blue. I think those trends are going to just wash over Cory Gardner.

And Susan Collins is losing by about 3.5 to four percentage points in Maine. I think she loses because she’s lost women. I think the Bret Cavanaugh vote, for whatever you think about the hearings, that cost her amongst a really crucial voting populous. And she’s got Sara Gideon as an opponent, who is the Speaker of the House in Maine and sort of a younger version of Susan Collins actually in a lot of ways.

So I think that seat’s gone, I think Colorado’s gone for the republicans. And I think in Arizona, the fact that Kyrsten Sinema pulled that out in 2018 very closely in that Senate race, and the fact that Arizona’s done things like expanded Medicaid under Obamacare for example, Arizona is shifting. Seniors in Arizona this year will make a difference because they tend to be more conservative, and there’s a lot of them. And women in Arizona. And you’ve got Mark Kelly, who has not talked about abortion really much but is talking about healthcare a lot, against Martha McSally who’s walked away from being pro-Trump and she’s starting to talk about what she’s done for Arizona in the last three years being in office. She may still pull it out, but it just looks really hard with the momentum that Biden has.

Coattails all matter. I don’t think she’s intensely disliked, but I think Mark Kelly is a very attractive candidate and he may win by winning both women on choice issues and also men. And so I think that’s why Mark Kelly has an advantage.

So I think those three seats are not gone completely, but pretty much gone for the republicans. What you’re seeing in Montana is that Steve Daines is republican is actually starting to break out and maintain an advantage over Bullock. That’s a red state that will go for Trump, so I think that’s a hard climb for the republicans.

Kansas, Bollier was a very good candidate, a woman who used to be a republican, now she’s a democratic candidate. But she’s running against somebody who’s conservative, but I don’t think so conservative that Kansas won’t elect him, so I think that’s a tough pick up for the democrats.

I think they’ll lose in Alabama. Tommy Tuberville has financial problems. I don’t care, it’s Alabama. And the more people in very red states think Trump might lose, if they let themselves believe that, they are far more inclined to vote for a republican to keep that balance.

So the same dynamic in Kentucky, can you knock off Mitch McConnell? He just debated Amy McGrath and said, “Listen, I’m the majority leader of the Senate. I can bring all this stuff back to Kentucky.” He didn’t mention that Kentucky has 300,000 people on Obamacare, which might need some help. But nonetheless, he’s got a strong argument to make. I think he keeps his seat.

So I think that’s the problem for the democrats is that this narrative that Biden blue wave going to win, that just makes people who are independent may say to themselves, “I don’t want Trump, I’m willing to take Biden. But I don’t want a unified democratic government.” So I think that is shifting some of the margins in those states that seemed out of reach but possible.

Iowa, Joni Ernst for some reason is not liked in Iowa. I haven’t figured out why she’s not exactly wrong, but they don’t seem to like her. So Theresa Greenfield is running, and she is raising a ton of money, $27 million in the last quarter for Iowa, tons of money. She’s up by four or five percentage points, that’s a lot in Iowa. And they’re two women running, so there really isn’t a gender dynamic.

This is personal. There seems to just be an antipathy. I think that’s the democrats’ best chance for that extra seat, which would still only bring them 50/50, and they’d need to win the White House with Kamala Harris as the presiding officer. When you break a tie, when it’s 50/50 like this, we had this circumstance in the Senate in 2001 after that election just for about six months, you have to divide things up kind of weirdly. But the democrats will have all the rulings of a chair and control the chamber.

That’s how tight I see this, and I do see this as a disadvantage to the democrats that the perception is moving more and more towards Biden winning. I think that pushes some people that might have wanted to thwart Trump with a democratic Senate now saying, “Nope. I know there’ll be a democratic house. There might be a White House that’s democratic.” I think markets probably want a unified government so you can get things done.

But even if you have a 51/49 republican Senate, they’re looking to 2022 immediately. If they win and hold on, Mitch McConnell is still leader, 78 years old, still leader. He is going to want to win again in 2022. It’s a good year for republicans. The math, they’re going to want to do things that attract support from investors and from the general public, so I don’t see them blocking a stimulus package.

Besides by this point, if nothing happens and COVID stays the same, we’ve got some real job loss, and they’re going to be worrying about 2022 as soon as 2020 is over. So that’s why I’m still optimistic, even though you have some hardcore republicans who don’t want to raise the deficit, I think you’ll see people like Lisa Murkowsky who’s up for reelection in 2022 from Alaska going over to the democratic side in the Senate. So that leaves it as 50/50, again Kamala Harris would break that tie.

So if you’ve got a 51/49 republican Senate but a Biden/Kamala Harris White House, you’re still going to have a lot of things go through that the democrats want, particularly to stimulate the economy.

Sassan Ghahrama…:       Very interesting, thank you. That brings the issue of the filibuster also in light. There’s been some chatter about removing the filibuster, which is going to be very important for the passage of legislation. I believe that for budgetary matters, there’s one vote a year that can be passed by 51 [inaudible 00:50:33]-

Wendy Schiller:                 So the Senate rules are … There’s a ton of Senate rules, but the package called reconciliation, which is usually the vehicle that is required to make any changes in the tax code because you cannot actually change revenues without changing outlays and you have to do it in a reconciliation bill. You could do it in a tax bill, but the tax bill’s actually sometimes, parts of it are housed in a reconciliation bill. That cannot be filibustered, and that can pass by 51 votes, the only thing. Appropriations bills can be filibustered.

So you’ll have some senators who want to look really good on the deficit, and they’ll all be gearing up to run for election for president in ’24. Tom Cotton for example, Ted Cruz, among others. So you’re going to have that jockeying of dynamics.

The filibuster is a generational thing, and Joe Biden is pretty old. He’s an old senator, that’s what he really is. He’s Vice President, but he’s an old senator. And they want to hold on to the filibuster because it’s sort of the only thing standing that could possibly block the republicans from doing things. And it has made a difference, we’ve seen this. We’ve seen in [inaudible 00:51:41] votes. We’ve seen in all sorts of votes.

So I think I’d be surprised if they eliminated the filibuster. I know Elizabeth Warren has said let’s get rid of it, and Barack Obama has said it’s a Civil War remnant, but I think those that have been around long enough may say to themselves, “Why would I want to give up my individual Senate power to block something in the Senate?”

I tell people the story of Harry Reid, the former majority leader of Nevada. He blocked nuclear waste being dumped on Yucca Mountain in Nevada for almost 20 years, almost 20 years, simply through the filibuster. So it’s a powerful tool for individual senators, I don’t think they’re going to want to give it up.

Sassan Ghahrama…:       Okay, thank you, that’s very interesting. Going back to the presidential election, we have a question related to contested election. I remember I shared a piece a while back on competing electors and the possibility of that. What are your feelings on that and the chance that we actually are faced with a situation like that that could I guess put the process in turmoil, maybe even through year end?

Wendy Schiller:                 I think that’s certainly something that the Trump campaign has been floating. I’m just going to share my screen with you about the electoral college. This is a long violation of PowerPoint, but what the electoral college is supposed to do, this is what the electoral college does. Electors are appointed by electoral votes per start or the number of senators plus the number of representatives. The total if 538, you need 270 to win.

Electors pledge now that when they are selected, they will vote for the candidate that wins the state, winner take all. The pledge that. So what’s important is that that pledge is relatively new. For most of the country’s history, the electoral college was a power without practice, you could overturn the election but they didn’t. And now, I think you can’t, especially in this day and age. But most states did not put this requirement in writing for electors, they just electors go and said we trust that you’re going to do what you’re going to do. This is typically done for most of the history of the country through political parties.

But the Supreme Court has now said as of July of 2020 in Chapwell vs Washington that states basically can enforce your pledge. So the Court writes, “The states have devised mechanisms to ensure that the electors they appoint for the presidential candidate their citizens have preferred.” So with two partial exceptions, every state appoints a slate of electors, and most states compel electors to pledge support for the nominee of that party. And 15 states have sanctions against you if you are a faceless elector. So they held nine to zero that a state may enforce electors’ pledge to support the party’s nominee in the state voters’ choice for president.

So I think there’ll be challenges in states that are trying to actually replace the whole set of electors that have not been chosen by the voters indirectly. I think that’s going to be subject to a lot of challenges. And we’ve seen that the Pennsylvania state Supreme Court right now is very interesting on voting. They have wiped out districts saying that they were gerrymandered. They have forced Pennsylvania to redo their districts before the election, unlike North Carolina which is waiting until after the election.

So when you think about the Pennsylvania state Supreme Court, I don’t see them upholding a wholesale replacement of state legislative electors. It’s possible … And you also need state legislators. Now these will be the lame duck session of state legislators, it’s not going to be the new people, but they have to get reelected in 2022 also. They have to go before the people again. And even though you may want Trump to win, I don’t know that every republican in Pennsylvania … And the state republican leader in Pennsylvania, GOP leader, floated this idea, is going to support this go around of the voter.

We have until essentially December 8th and December 14th to resolve this election and go to Congress, have it certified, go to the electoral college, and I think it would take an extraordinary coordination game, those of you who’ve studied this in business school, it would really take a big coordination to do this in multiple states. It’s a hard challenge to do. And if the popular vote is five or six million in favor of Biden, it becomes electorally even less tenable to do.

So remember, they all have to go before the people, except for the lame duck members, they have to get reelected as well. So I’m not persuaded this would happen in enough states to swing the election.

I do see legal challenges. I think republicans are always better at this than the democrats. I’ve heard rumors the democrats are recruiting lawyers and paying for lawyers and trying to get their teams ready. I’m not sure how this would go to the Supreme Court. In the same way that people think Bush v Gore the Court overstepped, states regulate the time, manner, and place of elections. So if it’s an electoral dispute, that ought to be resolved by state supreme courts.

And unless you are violating one man one vote or violating the 14th Amendment, I just don’t know how the Court takes the case and decides it. So that’s another sort of question mark in my mind.

Sassan Ghahrama…:       One final question related to that. I see three broad elements to the elections. One is the presidential election itself, the other we touched on was the Congress. And the third one, which we’re talking about here, is really the mechanics, we talked a lot about the mail in ballots, sort of the cone of uncertainty around November 3rd, the date, as you started out your talk, that we’re so used to getting our results.

So let’s say thankfully that we can at least say that there’s a maybe negligible chance of having the real nuclear situation of competing electors and all that. Can’t rule it out, but would have to have a lot of things lining up a certain way. As far as the actual results, and you touched on this earlier, what’s your view … I mean I guess it depends on how close the races are. Is this going to be a question of two or three days? Is it going to be a week? Is it going to be a couple of weeks maybe?

As you can imagine, this has a lot of implications for positioning specifically in addition to kind of how we look at the …

Wendy Schiller:                 Well, I think if it’s tight, as I said, I do think if it’s a tight race, I think Trump probably emerges the winner. But at least two weeks because so many of these states that allow absentee ballots to come in two weeks after Election Day. So the only way that won’t matter is if one of the candidates has such a big lead that the outstanding mail ballots, which they’ll know how many of them are, just couldn’t swing the election either way.

So if they know that, then they don’t have to wait for them to certify the election. And many states have automatic recount if there’s a less than 5,000 vote margin, and so many of these states are automatically recounted, so that could take some time. I think a month is long enough. I don’t think it’s going to take more than a month to count all these ballots, particularly since we’re really only looking there’s eight states that don’t count before Election Day, only two are really considered to be swing, so I think resolving Wisconsin and Pennsylvania will be the focus of attention, and I think they can do that well before the electoral college would meet and well before they have to be certified.

Remember state legislatures, governors certify elections. Secretaries of state certify elections, but governors at the end of the day certify elections. So when Katherine Harris certified the Florida election and took in to the Supreme Court of Florida and they wanted to keep the count going. But if the governor certifies the election, those results go in, they’re sent in.

So I think that’s the thing about having democratic governors of Pennsylvania and Michigan and Wisconsin and North Carolina in 2020, when you did not have democratic governors in 2016. So I think that makes a difference in when these elections will get certified. But as I said, I think it’s not going to be a vast majority of states that have problems, I think it’s really only going to be a few. They happen to be large, they happen to be important in swing.

I don’t see a western strategy, going back to your other question, I don’t see a western strategy for the President right now. I think given previous elections, really 2018, I think you’ve just seen a pretty big shift. Even the fact that Joni Ernst is in trouble in Iowa, even the fact that Bullock and Daines is close in Montana, that just goes to show you that there’s probably not a winning minefield of votes except for a few states like Idaho. If Trump loses Arizona but wins Wisconsin, that will offset that.

A couple of worrying things for the democrats I would say, for absentee ballots so far returned, twice as many older people over the age of 65 have returned their ballots versus fewer than 50% of young people between the ages of 18 and 25 have returned their absentee ballots. That’s something of concern.

So getting them in early, particularly since so many states process them early, or at least the week before the election, is the key I think for people who want to see either Trump or Biden win decisively.

Sassan Ghahrama…:       Okay. Thank you very much Wendy, really appreciate you’re sharing your thoughts and your insight and your analysis and time with us. Great discussion. Thank you everybody for joining the call. We’ve already had some requests for your slides, so if you don’t mind sending it to us, we can forward it on to the participants as well. And we look forward to staying in touch. I guess two weeks to a month is going-

Wendy Schiller:                 A couple weeks. One last quick thing for sources. Real Clear Politics does a nice job of summarizing the polling in Senate races. So they summarize the national polling, but they’re a nice one stop shopping on their home page. You just click on Senate and you can see the averaging of Senate polls. So if you’re really interested in Senate races, I would check that.

Sassan Ghahrama…:       Yeah-

Wendy Schiller:                 Thanks for having me.

Sassan Ghahrama…:       -That would be very interesting. Thank you very much Wendy, really appreciate. Thank you everybody for joining the call, and we’ll conclude at that. Cheers everyone.


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