The Democrat Biden Problem – Who Can Replace Him?

Knowing what we do today, the person who emerges with the Democratic nomination nine months from now will almost certainly be a Progressive. Do moderate candidates even stand a chance? A couple of days ago the answer was simple: a resounding ‘no’. But enter Michael Bloomberg, who has just raised the tantalizing possibility that – depending on how things go for Joe Biden – he might enter the race.

For what they’re worth, as I am writing, political betting markets put Bloomberg’s odds of winning the Democratic nomination at a humbling 500 to 1. That seems extreme, and likely to improve. But the message from the betting markets will probably stay much the same: Bloomberg is a long shot.

The Numbers Favour Progressives

Let’s take a closer look at how the numbers are shaking out. The latest Economist/You Gov poll taken just before the latest debate puts Elizabeth Warren at 29%, Joe Biden at 25%, Bernie Sanders at 13%, and Pete Buttigieg at 7%. Those four together total 74%. Another nine candidates total 17%, implying 9% of the poll is undecided or backing other candidates. In the early voting states, those four are polling at 79% in Iowa, 80% in New Hampshire, and 81% in South Carolina.

Granted, anything can happen. But seriously, it is hard to imagine more than one of the stragglers emerging as a viable candidate for the nomination. As they drop out, will their backers turn to a progressive or a moderate?

The progressives are Elizabeth Warren, Bernie Sanders, Tom Strayer, and Cory Booker. There are only two genuine moderates – Joe Biden and Amy Klobuchar. The other candidates are more vaguely placed on the liberal spectrum. Left to their own devices they would probably identify more with progressive policies. But political realities push hard and are leading them to try and appeal to the moderate wing of the party.

The problem is that the progressives together are already hitting near 50% across many polls while the two genuine moderates are in the low to mid 20% range. That’s a big gap.

Could Michael Bloomberg close it?

He has publicly stated that he will not run unless it becomes apparent that support for Biden is fading to the point where he is no longer a viable candidate – preferably before voting begins.

What About Biden?

His strongest card is his extensive political experience and, perhaps, his promise to put the Trump years behind while returning to Obama-era policies. But both of these things are double-edged swords, which might put off some more moderate voters who would otherwise support him.

To cite one example, Biden’s experience includes dismissing Anita Hill’s allegation of sexual harassment and essentially throwing her to the wolves during Clarence Thomas’s Supreme Court hearings in 1991.Whatever the circumstances were back then, that does not play well in today’s #MeToo era.

And many people have enough common sense to avoid falling for the nostalgia angle. Too much has changed even in the past four years including climate change, income inequality, and geopolitics. Biden may have been able to work across the aisle during his Senate days, but given how polarized Congress has become since then, his promise to return to bipartisanship governing sounds hopelessly naïve.

Given this baggage, it is easy to hold Biden’s age against him, especially in light of Bernie Sander’s recent heart attack.

Bloomberg Has Issues Too

All that said, Bloomberg could have a difficult time stepping into any vacuum that Biden might leave.

To start with the obvious, Bloomberg is 77. If he were elected, he would turn 79 on Valentine’s Day 2021, shortly after Inauguration Day. If he started to make a serious run it would be just a matter of time before that becomes a campaign issue.

Bloomberg gets solid marks for his tenure as New York City mayor. But it is also fair to say that he exhibited some of the more authoritarian tendencies that Trump does. There was, for example, his effort to ban sugary drinks bigger than 16 ounces by regulatory fiat (eventually overturned by the New York State Supreme Court).

There is room for rival candidates to cherry-pick Bloomberg’s record as mayor and gain points with voters angry at Trump’s governing style.

And finally, there is time. Today Biden is close to Warren in most polls. The big exception is the early voting state of South Carolina where Biden leads Warren 43% to 18%. Even if Biden slips in national polls, if he can hang on and manage solid showing in the South Carolina primary he will probably still have the momentum to stay in the race long enough to give Bloomberg little time to enter.

If Bloomberg wants to run for president, either Biden has to fade soon, or he has to run in competition with Biden. Even if he does enter and shows promise, overcoming the Progressive momentum will be a tall order.

Of course, whether a Progressive nominee can take the White House is another question altogether.

Over a 30-year career as a sell side analyst, John Tierney covered the structured finance and credit markets before serving as a corporate market strategist. In recent years, he has moved into a global strategist role.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)