What you're not hearing about the economy and the 2020 presidential election

Monday, August 3, 2020
Donald L. Luskin

Our model now shows Trump winning, thanks to the worst-ever GDP report.

Update to Strategic View

How can stocks be flirting with all-time highs with the prospect of Bidenomics replacing Trumponomics? Our quant election model got broken by negative oil prices and unprecedented payroll losses, but as the economy has returned to equilibrium, so has the model. Q2-2020 GDP was the worst ever, but personal income was the best ever thanks to stimulus and enhanced unemployment, and that's weighted more highly in the model. Further stimulus may be off the table, but Q2 stimulus was banked, not spent, in the biggest-ever quarter for personal savings. Q3 could see a spending binge as the economy re-opens, and voters will thank the president whose name was on the stimulus checks. The model now predicts Trump will win by 237 electoral college votes.