Internal Democratic and Republican party polls taken over the last few days all show the same devastating impact of GOP presidential nominee Donald Trump’s campaign implosion since last Friday: the national four-way and two way polls, and across all the polls of all 13 battleground states, Democratic presidential nominee Hillary Clinton is ahead by at least four points and as much as eleven points.
Hers is an “everywhere win” that will be hugely difficult to close in the remaining 26 days until election day on November 8 – especially in Trump’s double down appeal to his core base in attacking both Clinton and Republican House Speaker Paul Ryan.
But even more dramatic may be the implications of the Democratic gains extending from the White House to possible control of the Senate and at least narrowing down the GOP House majority. It may be too early to assert with any certainty on just what that may mean for economic and regulatory policy issues, but the market may prove to be just as unprepared for the consequences of a Clinton win as it was previously for a Trump victory.
Trump’s Damage Down-Ticket
Pre-implosion, there was a relative sense of optimism for the down ticket GOP candidates who might benefit from Trump at the top of the ticket. Even if they declined campaign appearances with Trump – and no Republican, either Senate or House member, in battleground states has appeared with Trump – they could still gain ground against Democratic opponents in the groundswell of new voters being brought to the voting booth by Trump’s high energy, unorthodox campaign.
Instead, the opposite of such a coat-tail effect looks to be developing. The internal party polls are showing that a too large for comfort share of traditional Republican voters, especially those in the suburbs, are now inclined not to show up to vote at all in revolt against Trump. That also means they are not voting for the down ticket candidates. Even if they vote for Clinton, however reluctantly, they tend not to split the ticket on their ballot.
For now, the most recent GOP internal polls show the GOP losing at least a net four Senate seats, in Illinois, Pennsylvania, New Hampshire, and Wisconsin, with both Missouri and North Carolina as toss-ups. That means a threadbare return to a GOP-controlled Senate and Kentucky’s Mitch McConnell as Senate Majority Leader. The polls likewise show Ryan keeping his seat as House Speaker with the GOP 59 seat majority cut to perhaps as narrow as a ten seat majority.
But both those assessments presume no further bleeding of GOP support in the numerous close races in purple or blue states…or red states, for that matter. The once safely Republican Senate seat in Indiana, Vice Presidential candidate Mike Pence’s home state, is now too close to call and could go to Democratic challenger Evan Bayh.
Perhaps more consequential in the election scenario unfolding is what it would mean, not just for a Clinton victory to take the White House, but what would it mean if the Democrats re-took the Senate, or even the House, or even came close to winning back either or both?
Democrats would naturally cite the winning ways of Hillary’s coat-tails, spinning a Democratic “wave” and a new, emboldened governing mandate, a mandate that could more easily than not lean hard to a progressive agenda that would satisfy the party’s left-leaning base and high profile members like Massachusetts Senator Elizabeth Warren or Vermont’s Bernie Sanders.
But if the Democrats show anything like the Senate and House success under the emerging scenario of Republican civil war, it would not necessarily be due to Hillary Clinton’s coat-tails, but the reverse coat-tail effects of the turn-out problem in Trump’s war against the GOP in a large no-show of GOP voters. It is not that Hillary is winning, but she is losing less slowly than Trump.
Democrats have long worried that Hillary in fact has or had a potentially serious turn-out problem in failing to get out the vote of the African American and Hispanic voters of the “Obama coalition.” But Trump, in effect, is solving the Democratic turn-out problem for her by creating an even larger turn-out problem for the Republicans, especially for those closely-fought down ticket races in blue and purple states.
What Kind of Mandate?
More to the point is what this might mean for a Clinton Administration’s economic policy agenda under the electoral scenario that seems to be unfolding. President Clinton’s instincts might be to govern more from the center. But at least in the first two years under such a scenario, that may prove difficult. For one, her agenda may get skewed to her left by an emboldened Democratic party base.
But equally, Senate and House Republicans, whether as a majority or minority on Capitol Hill, are likely to engage in something equal to a “scorched earth” defensive legislative stance; partisan roadblocks, in other words, to either force a Clinton White House to the center or to hold out for major electoral gains in 2018.
With such a scenario now fast developing into a base case outlook for the US elections, the market reaction may prove as volatile and uncertain as it was expecting to be in response to an unexpected Trump win.