The First Election Debate Could Change Everything

There is real potential that this presidential election could close dramatically and register as a huge shock to the markets. This shock would create a sudden a recognition that, in these very complacent financial markets, everything is up for grabs.  It could signal that policy could change dramatically and that what has carried on for 30 years may be coming to an abrupt end.

September 26th could be a major turning point in this shock. That date is important because it is the first presidential debate. While I don’t know how the debate will turn out, I do think that the outcome could be surprisingly favorable to Trump. If this is the result, the polls could tighten dramatically.

I’ve seen that happen time after time in the past – most memorably in the 1980’s.

In late August, the polls are practically meaningless.  To emphasize the point look at history.  In August of 1988, Dukakis was 18 points ahead of George Bush at the time. It was considered a shoo-in. The election was over. It was all done. Then George Bush won.

Likewise in August of 2000, George W. Bush was 17 points ahead of Al Gore. Of course, we know how that election came out. We didn’t know the full answer until December. As it turned out, Gore actually won the popular vote.

My point is that anything can happen — especially in presidential debates. They can be decisive, in fact.

One of the great personal experiences I’ve had in life was being chosen in 1980 to be Ronald Reagan’s sparring partner as he prepared for the presidential debates. I was a Congressman for Michigan at the time but had worked for John Anderson, the Congressman from Illinois who was an independent presidential candidate for the election. The first presidential debate was between Reagan and Anderson, not Carter.

Reagan needed to prepare…

They thought that I might understand where Anderson would be coming from, and so I spent a week debating Governor Reagan at the time, and preparing him for a very successful debate with John Anderson.

The outcome was that once the more crucial debate arose in Cleveland late in October, I was asked to spend a week in a mock studio to prepare with Reagan.  This was spent in rehearsals spanning mornings, afternoons and sometimes even into the evening where I functioned as “Jimmy Carter” as a debate sparring partner. As it turns out, it was one of my harder assignments because I don’t think anyone would relish having to pretend they were Jimmy Carter for a debate.

Carter v Reagan

Ultimately, Reagan won the debate overwhelmingly. Moreover, from that debate performance, he won the election, but it wasn’t based on how much he knew. Jimmy Carter knew 3 or 4 times more than Ronald Reagan knew at the time. It was more about a decisive moment in that debate where Ronald Reagan caught the spirit of the country, caught the vulnerability of the very unpopular president, and delivered lines that made all of the difference.

While I do not know whether Donald Trump is going to be prepared to seize the opportunity in the way that Ronald Reagan did in 1980, I do think it’s possible. I do think it is very probable that he will do well because he is an outsider. He’s not been schooled in 30 years of political etiquette and politeness. He will take the debate right to Hillary Clinton, and he will try to make it a referendum, not only on her career, but the last 30 years of what I call the “Clinton-Bush policy of failure” in this country.

We may be in for a big surprise on the morning of the 27th, when the post-debate polls come in. While, I’m not in the prognostication business on things as volatile as presidential debates, I am in the probability business. I think the probabilities are good that this election race is going to close dramatically, that the inflection point may be September 26th.

If the election gets close and uncertainty is high, the path over the last 30 years in policy could comes into question. There could well be a major unexpected upheaval in the market.


David Stockman
for The Daily Reckoning

P.S. You can preorder a copy of my latest book “Trumped! A Nation on the Brink of Ruin… And How to Bring It Back.” The upheaval and crossroads represented by Donald Trump’s candidacy spell economic disaster or resurgence, depending on 10 essential steps America needs to take immediately.


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