Can Trump Rally?

Can Trump Rally?

Dear Reader,

The world is a very different place in 2020, and the upcoming US election isn’t getting the same sort of attention it normally would.

Trump still has a chance of re-election in November. Despite Trump’s many blunders, and Biden’s solid lead in the polls, there is cause for optimism in the Trump camp, says Jim Rickards.

It all comes down to whether Trump is able — and willing — to make a few key changes. Read on to find out more…

The Case for Trump

We begin with a look at Trump’s job approval ratings, shown below. This chart puts Trump’s approval at 41.9% and his disapproval at 55.9%. That’s a huge 14-point spread against Trump.

But, as with the Right Direction/Wrong Track poll shown in a previous Daily Reckoning Australia edition, these results are volatile.

The negative spread was higher (about 21 points) in late 2017 at the height of the Russiagate hoax hysteria. The negative spread was quite narrow (only about two points) as recently as late March. Trump can narrow this spread and gain support if he demonstrates the kind of leadership he did in the early days of the COVID-19 pandemic.

Port Phillip Publishing

Source: RealClearPolitics

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As important as the spread is the base. Despite volatility in the ‘Disapprove’ category, Trump has shown resiliency in the ‘Approve’ category. His base level of support has not dipped below 40% since early 2018 and has frequently been higher.

The 40% approval level is not quite enough to win the election, but it is a rock-solid foundation on which to build. With 40% to count on, Trump only needs to add about 8% of the voters to win. (Trump can win with less than 50% of the total votes provided he wins key states. This is what he did in 2016.) An 8% pick-up is a tall order, but not too much to accomplish if Trump can steady his campaign and stay focused.

Can Trump rally?

As for the campaign, journalist Byron York of the Washington Examiner offered this inside look at the Trump campaign’s frustrations and deliberations in an article on Wednesday, 15 July 2020:

At his Rose Garden news conference Tuesday, it was more than clear that the coronavirus issue just eats away at President Trump every day. He talks frequently about how well things were going before the disease came to America. The economy was strong. Democrats had thrown everything they had at him during impeachment — and lost. Democratic strategists openly talked of Trump winning a second term.

“Then the virus came in, and the world is a different place,” Trump said wistfully to a small group of socially-distanced journalists. Coronavirus brought 139,000 US deaths (so far), along with economic devastation. Then came the Black Lives Matter protests. And then came the polls showing Democrat Joe Biden leading Trump nationally and in some key states. And that is with Biden doing little traditional campaigning — or “hiding in the basement,” as Trump supporters say. […]

Now, though, Trump has to find a new way. He has no choice. […]

The rallies that characterized Trump’s 2016 campaign will not be returning this summer, and possibly not at all before election day. Trump and Biden will have to come up with alternative ways to reach voters on a day-in, day-out basis. For Trump, there will be no substitutes for those packed, occasionally wild, rallies of 2016. Tuesday at the White House was a glimpse of his future campaign.

Trump has taken concrete steps to address some of his campaign’s deficiencies. On 15 July 2020, Trump removed Brad Parscale as his Campaign Manager and replaced him with Bill Stepien, who was the Deputy Campaign Manager. Parscale will remain with the Trump campaign as senior adviser for data and digital operations, essentially the same role he performed successfully in the 2016 Trump campaign.

Parscale is brilliant at social media marketing, but he was in over his head as a campaign manager. Stepien is a more seasoned political professional who helped Chris Christie win a tight race for Governor of New Jersey in 2009 and worked in the Trump campaign war room in 2016. With Stepien in the lead role and Parscale remaining in his social media niche, this represents a significant improvement in the Trump campaign’s prospects.

This necessity for a new approach by Trump was echoed by reporters Josh Wingrove and Mario Parker in an article from Bloomberg News on Tuesday, 14 July 2020:

President Donald Trump swept to power by championing the hardships of forgotten men and women, but his re-election bid has so far centered on the plight of just one person: himself. Trump is struggling to respond to a resurgent pandemic, an economic downturn and nationwide protests for racial justice. The coronavirus has weakened the central plank of his campaign — the economy — while mostly scuttling the rallies that he thrives on. […]

Trump’s frequent complaints of mistreatment show a leader unwilling to change tactics, even as polls show him trailing Democrat Joe Biden and even at risk of losing his Republican Party’s Senate majority. His poll numbers and approval rating have dropped as the concurrent crises focused attention on Trump and his response. Undaunted, he has continued to bend the narrative around himself personally even as Americans worry about the pandemic’s rising toll. […]

His campaign and administration continue to search for a way to adapt to the pandemic era.

Market expert Shae Russell predicts five knock-on effects of the recent market crash that could be even bigger threats to the average investor’s wealth than the crash itself.

Where Trump leads

Trump retains several distinct advantages.

The first is money. As of the end of May 2020 (most recent date for which confirmed data is available), the Trump campaign has US$108 million compared to only US$82 million for the Biden campaign.

The Republican National Committee has US$82 million on hand compared to only US$40 million for the Democratic National Committee.

Looking at the major political action committees, the Trump Make America Great Again Committee has US$33 million and the Trump Victory Committee has US$50 million, while the Biden Action Fund has US$11 million and the Biden Victory Fund has US$81 million.

Combining all sources reveals that Trump has access to US$273 million of immediately available funds, while the comparable amount for Biden is US$214 million, giving Trump a US$59 million advantage.

Of course, both campaigns are raising money at a furious pace and these totals will change, but for now the advantage clearly goes to Trump.

Trump also has a larger database and a more sophisticated digital media operation. In 2000 and 2004, George W Bush won with a superior ground game (door-to-door canvassing) organised by Karl Rove. In 2008 and 2012, Obama had a superior first-wave tech advantage using text messaging and mobile phone communications.

In 2016, Trump leapfrogged the Democrats with a second-wave tech advantage involving targeted ads on Facebook and Google with micro-tagging that reached down to individual streets and homes. The Democrats have tried to catch up, but for now the Republicans maintain the edge and this will work to Trump’s advantage in closely contested swing states such as Michigan, Pennsylvania, and Wisconsin.

Trump has advantages in money, technology, incumbency, and a more energetic campaign style. His disadvantages include his handling of the pandemic and the recession, and his inability to use his natural advantage in the mass rally format due to pandemic lockdowns.

Trump can overcome these disadvantages with a clear message about his plans for a second term. If he can articulate those plans and maintain a messaging focus beginning immediately, he can win a close election. If not, he will probably lose.

All the best,

Jim Rickards Signature

Jim Rickards,
Strategist, The Daily Reckoning Australia