William D. Johnston

Chairman

Economic Commentary

We attempted to defer our publishing deadline until the outcome of the 2020 presidential election was determined, but, as you can surmise, as of November 6th the outcome was not known. At this writing, President Trump has won 214 electoral college votes and must be declared the winner in Arizona, Georgia, Nevada, North Carolina and Pennsylvania to secure the necessary 270 electoral college votes required to win the presidency for his second term. Former Vice President Biden has won 253 electoral college votes, is leading in Arizona, Nevada, Georgia and Pennsylvania and must be declared the winner in only two of the states identified to reach the required electoral college requirement. On the surface it seems President Trump has a tougher, if not impossible, pathway to victory. Amplifying that challenge is the fact that all of the states identified are now counting the category of absentee and/or mail-in votes cast. In the 2020 election, voters who either identified as Democrats or leaning Democrat were far more likely to vote absentee or mail-in ballot, mostly out of fear of COVID-19 and long lines. The Democratic Party made their ground game pitch to match their electorate, and encouraged absentee/mail-in voting. The Republican ground game was to turn out their voters on Election Day. Both parties were hugely successful in their ground game strategies. By all analyses and assessments, voter participation in 2020 has been at historically high levels in all categories, including early in-person voting, absentee/mail-in ballot voting and actual in-person Election Day voting.

Reporting of voting results almost always begins with those ballots cast in person, either early or on Election Day. Ohio is the exception, which begins with absentee/mail-in ballots and then reports Election Day or in-person votes. Most states begin processing and scanning absentee and mail-in ballots once they are received at the respective county clerk’s office. It is important to know that in none of those states are results either known or released as the tabulation of the scanned votes does not occur until the polls close in the respective states. Battleground and swing states were well known by both parties and each applied different strategies to earn success. Democrats concentrated on registration, absentee applications and appeals to either mail or deliver the ballots early. Republicans concentrated on rallies and Election Day turnout. Republicans also spent time in states where they also controlled the legislature to prohibit early scanning of ballots. The result has been that in the five battleground states that we are now waiting on, early results only reflected Election Day and early in-person voting and didn’t include the massive amount of absentee and mail-in ballots cast in this election.

As Republicans went to bed Tuesday night, they were probably assured that they would wake up with the news that President Trump had been elected to his second term. He was leading in Arizona, Nevada, Michigan, Wisconsin, Pennsylvania, North Carolina and Georgia — all had been identified as necessary states to win on the pathway to 270 electoral college votes and victory. The President declared victory at 2:30 A.M. on November 4. As the sun rose on the fourth, and results of absentee/mail-in ballots began to be released, the landscape began to shift. The clear Democrat preference for absentee/mail-in ballots began to erode Republican vote leads in those key states. By Thursday morning Michigan and Wisconsin were called for Biden and the likelihood of Arizona and Nevada moving to the former Vice President’s column was becoming clear. Simultaneously, President Trump’s rather robust leads in Georgia, North Carolina and Pennsylvania began to wither as well.

We will not know the outcome of the race until two things happen. First, all ballots must be counted and reported. There is a great probability that this will happen by Friday evening, November 6. With the trends currently in place for absentee/mail-in votes being counted, the higher probability is that former Vice President Biden will earn 270 Electoral College votes and therefore be the next President of the United States. Secondly, there will be legal challenges put forth contesting many separate and distinct portions of votes cast, particularly in these identified battleground states. It is not unusual for these types of legal actions or suits to take place and they almost never result in election results being reversed. Most of these types of challenges have been at the state level and few have made it to state appellate, federal or Supreme Court hearings. The well-known exception, of course, was in 2000 when Florida’s 25 electoral college votes hung in the balance. The winner of Florida, either Bush or Gore, would become President depending on the contested vote results. The Supreme Court of Florida heard arguments from both sides and the arguments were broadcast on live television. The court’s decision was to require a manual recount of the entire state of Florida’s ballots. The process of delivering the ballots to Tallahassee had actually been initiated when the Federal Supreme Court intervened. This was highly unusual because no one had actually petitioned the Federal Supreme Court. Nonetheless, the arguments before the court proceeded and in a 7 – 2 vote the court decided that the recount ordered by the Florida Supreme Court violated the 14th amendment of the Constitution and that the recount could not proceed. Vice President Gore and the Democratic Party were now out of options and Gore conceded, allowing President Bush to become the 43rd President of our country. This history lesson is simply to remind us that courts can get complicated in election results, though the precedent of this Supreme Court decision would not serve anyone requesting a statewide recount well. The other lesson is that, within our history, just two decades ago we had a contested election that was not officially decided until December 12 of 2000.

Given the acrimony and heated levels of challenge in the election of 2000, including through the Supreme Court of the United States, we still were able to achieve a peaceful transfer of power. President Bush served his first term in office challenged almost daily by those who perceived him as an illegitimate President who “stole” the election, yet he later won a second term by a significant electoral college victory, earning substantial political capital in the process.

There is ample opportunity for us to learn many things about the 2020 presidential election if we allow ourselves to learn it. If you love democracy, you have to love and respect the large turnout of citizens expressing their constitutionally guaranteed right to free and fair elections. If you observe the nearly equal numbers who voted for each candidate you must acknowledge the nearly equal divide in the electorate. It is palpable that there is great intensity of passion on both sides of the ballot. If we acknowledge the intensity of the divide, then we must also acknowledge that unification and commonality will be hard to achieve in the near term. The citizens of our country did not get to this place of intense discord by ourselves. Our two political parties and the collective leadership of those parties share much of the responsibility for where we are.

Those that were expecting massive change in political control did not get their expectations met. Control of the Senate remains, at this writing, in the hands of Republicans though with a slimmer margin — and Democrats saw their control of the house be reduced though still retained. If Democrats gain the White House, they will govern with some known realities. The collective house of our country is divided. Citizens in large numbers in both parties feel left out. The pandemic was on the ballot, but has not been defeated by the election. Quick and decisive actions leading to defeating COVID-19, while simultaneously focusing on the quick restoration of our economy, will go some distance towards reducing anxiety and the sting of political wounds that will be raw for some time. Political rhetoric and actions that are ideological in nature, and focused on blaming or demeaning the opposition as enemies, will be self-fulfilling in the reinforcement of the divide that exists.

The message and implication — that some want to make America great while others don’t — cannot win the day. We have the opportunity to make America great for all and, in doing so, search for the value of what each in that great divide want and find a pathway to forming a more perfect union in the process. This will be an especially difficult challenge if each party sees the other as an enemy rather than simply rivals that have mostly moderately different views and sometimes really big ones. Elections usually result in politicians feeling that they have won political capital that they must spend quickly — because they also know political capital erodes in a hurry. Often, we see a President elected who starts with their 100-day agenda. It would be a welcome change to see that 100-day agenda in 2021 be about reconciliation and inclusion, and a philosophy of governing that acknowledges the divide within us and leads toward unity where possible.

COVID-19 Updates

As of November 29

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