Our record on Presidential Elections predictions is quite good.
Since we spelled-out our current stance on the markets and economy in our weekend piece...and since there isn't a lot of market moving new-news this morning...we thought we touch-on a political issue. Long-time readers know that we have been quite good in predicting the nominees for each party quite early in the process…as well as predicting who will win. We predicted John Kerry would win the nomination in 2004 when he was in the low single digits in the polls. We predicted that Barak Obama would defeat Hillary Clinton for the nomination n 2008. We predicted Mitt Romney would be the GOP nominee at this point in the process in 2012 when his campaign was faltering. Finally, we said that Donald Trump had a much better chance than anybody thought at winning the nomination at this point in 2015. (We do, however, readily admit that we wrongly predicted that Romney would defeat Obama in 2012.
NYC Mayors have a LOUSY record winning higher office.
This brings us to the newest entrant into the political fray this year, Michael Bloomberg. Mayor Bloomberg officially announced his candidacy for President of the United States over the weekend. The question is whether the former Mayor of NYC can win election to a higher office...when no former Mayor of NYC has been elected to ANY office after leaving the head of NYC in well over 100 years. (You have to go back to the 19th century...when one former Mayor was elected to Congress. Other than that, the office of Mayor of NCY has been a dead-end job for future political success.)
Our goal here has nothing to do with whether we think Mayor Bloomberg SHOULD win the Democratic nomination for President...or whether he SHOULD be elected the next president. We merely want try to give our view as to whether he has a good chance of becoming the nominee and/or the next president.
Very simply, we do think he has a very good chance on both counts. It will be a bit of a long-shot attempt...and it won't be easy (as it never is for anybody)...but we believe there is definitely a lane to success for Mr. Bloomberg in both races.
It will be an uphill battle for Mr. Bloomberg
There's no question that he will have some issues to overcome. 1) He is a billionaire...at a time when billionaires have (successfully) been vilified by other candidates. 2) It will be tough to build the kind of campaign infrastructure in many states at this late date to be effective. 3) He can sometimes come across as arrogant. That doesn’t help when many voters like to vote for people they can relate to. 4) Finally, the Mayor does not have much charisma. As we've pointed out many times in the past, EVERY single Presidential election since 1932 (when electronic media began having an impact on elections...with the radio) has been won by the candidate with the most charisma. No, people like Truman, Nixon and both Bush's did not exude charisma...but they ran against people with even LESS charisma (Dewey, Humphry, Dukakis, Gore and Kerry).
However, Mayor Bloomberg has many things in his favor
However, he also has several things on his side. 1) He has a very successful business man was not handed anything. He came from a middle class background and succeeded on his own. 2) He built a business employs more than 19,000 around the globe. 3) He is pro-business…which will help him attract the moderate voters from his own party…AND from outside his party. (More on this below…as it is a VERY important part of the equation) 4) He was also a successful mayor…as the issues of economic development and crime continued to improve during his three terms. 5) Finally, he has as much money has he wants to spend. Yes, he will be accused of trying to “buy the Presidency,” but a bottomless pit of money (and the fact that he won’t have to spend time raising any money) is something EVERY presidential candidate dreams about every single night!!!
Moderates (from both parties) can and do win their party's nomination
Ok, so the real question is whether Mr. Bloomberg can actually win enough votes to win the nomination and the general election. It is commonly believed that most moderates have a tough time winning their party's nomination (in both parties). Yes, Obama (liberal) and Reagan (conservative) were not moderates, but Presidents Bush I, Clinton, Bush II and even Trump were generally considered quite moderate on many/most issues. So, as you can see, moderates can and do win their party’s nomination quite often.
An election like no other
Of course, President Trump's unique presidency makes this upcoming election very different than any other of our life time. Most candidates spend a lot of time trying to look more “Presidential” than the other candidates. However, this will be even more important this time around...because Mr. Trump spends much of the time acting in a very un-presidential manner. In other words, the charisma we talked about above could very well take a back seat to "competence" and "integrity" in the upcoming race. (Have you seen the political signs that read, “Any Responsible Adult.”?)
Two dozen "open primaries" will help Mr. Bloomberg.
The reason we highlight this is because Mr. Bloomberg's background will give him A LOT of credibility with pro-business voters...from BOTH parties. To take this thought one step further, we'd note that about two dozen of the Democratic primaries are "open primaries"...where independents and Republicans can vote in the Democratic primary. (Since Trump is not facing a serious challenge...at least not yet...many GOP voters could be compelled to vote in the Democratic side of those primaries. Therefore, if there is a serious number of pro-business GOP and independent voters who like the President Trump’s economic policies...but are sick and tired of his antics...they just might be willing to help Mayor Bloomberg gain the Democratic nomination.)
Early momentum won't be as important this time around.
Of course, another item that works against Mayor Bloomberg is that he is not contesting any of the first four primaries. That would usually be a non-starter for any candidate…because history shows that a candidate NEEDS a lot of momentum coming out of Iowa and New Hampshire to win the nomination. However, the main reason they NEED that momentum is because it helps them raise money for the remaining primaries. Mr. Bloomberg will not have to worry about that…he already has all the money he needs to stay in the race as long as he wants to run!…..Also, since he won’t be running in those states, any lack of momentum coming out of the early primaries will not be a problem…as long as he is doing well in the polls of the states that come after those first four primaries.
In the end, the election will be a referendum on President Trump.
What we’re really saying is that as different as the upcoming Presidential year will be a lot different than any previous election year…it will ALSO be very much the SAME as many other election years in one VERY IMPORTANT respect. As it always is when a President is running for re-election, it is a referendum on the sitting President’s first term. Therefore, in the end, voters will be voting on whether they want “four more years” of President Trump.
Where the difference will come-in this time around is that many voters from outside the challenging party (in this case, the Democratic Party) will have a hand in who the challenging party nominates to take-on the sitting President. In other words, if enough Republicans from out side of President Trump’s strong base have the same opinion as former White House Chief of Staff Andrew Carr has…where they agree with many of the President’s policies, but don’t want to deal with the baggage that will come with another term in the Trump Presidency…they just might be compelled to help another pro-business politician win the Democratic nomination and the general election. This is also something many independents just might be willing to do. (President Trump’s base is very strong, but he will once again need a lot more than those voters to win a second term.)
We do indeed believe that this is the case…and that a lot of voters like Mr. Trump’s policies, but are getting tired of his antics. Therefore, we believe Michael Bloomberg has a very good chance of winning both his party’s nomination and the general election next year………...Again, this analysis has nothing to do with whether we think Mr. Bloomberg should win either the nomination or the general election. We just believe his chances of success are quite good.
Matthew J. Maley
Chief Market Strategist
Miller Tabak + Co., LLC
Founder, The Maley Report
275 Grove St. Suite 2-400
Newton, MA 02466
Although the information contained in this report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This report is for informational purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Any recommendation contained in this report may not be appropriate for all investors. Trading options is not suitable for all investors and may involve risk of loss. Additional information is available upon request or by contacting us at Miller Tabak + Co., LLC, 200 Park Ave. Suite 1700, New York, NY 10166.