In an era of information overload, it is surprising that there are still things that remain undiscussed. Take the upcoming US elections – there is much talk about possible Russian interference, attempts by President Trump to hamper the electoral process, and the role of COVID in suppressing voter turnout. Yet, there is no talk that the FBI could interfere with the elections. This is despite the fact that the FBI played a critical role against Hilary Clinton in the late stages of the 2016 election. Indeed, there is more evidence that the FBI had a bigger impact than any Russian interference in influencing the 2016 election. Could this happen again in 2020?
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In an era of information overload, it is surprising that there are still things that remain undiscussed. Take the upcoming US elections – there is much talk about possible Russian interference, attempts by President Trump to hamper the electoral process, and the role of COVID in suppressing voter turnout. Yet, there is no talk that the FBI could interfere with the elections. This is despite the fact that the FBI played a critical role against Hilary Clinton in the late stages of the 2016 election. Indeed, there is more evidence that the FBI had a bigger impact than any Russian interference in influencing the 2016 election. Could this happen again in 2020?
The 2016 Context
To better understand the impact of the FBI intervention, we need to understand the political dynamics in the lead up to the 2016 election. Most notably, both Hilary Clinton and Donald Trump were deeply disliked candidates. In polling surveys, Clinton had a net favourable rating ranging from -15 to -10 in the months leading up to the election, while Trump had a net favourable rating of -25 to -20. This had the effect of leaving many voters undecided or inclined to go with third party candidates. In fact, the percentage of undecideds was much larger than any lead Hilary ever had over Trump (Chart 1). The election result was therefore especially sensitive to late deciders.
Enter The FBI
Coming out of the summer of 2016, Clinton was gathering momentum. She ‘won’ the first debate against Trump, there were questions over whether Trump had paid taxes, and the infamous ‘groping women’ video was released. Over this period, Clinton’s lead over Trump widened from +1ppt to +7ppt. But, by late October, it had all turned around. The FBI announced it had found new grounds to investigate Clinton’s emails.
This shifted all attention towards the negative for Clinton. Notably, according to the Columbia Journalism Review, ‘in just six days, The New York Times ran as many cover stories about Hillary Clinton’s emails as they did about all policy issues combined in the 69 days leading up to the election’. Our analysis of the news intensity on the subject shows that it coincides with a significant decline in Clinton’s lead – it fell from +7ppt to +2ppt (Chart 2).
The FBI intervention and the subsequent focus on Clinton may likely have significantly impacted the undecided votes. Indeed, later analysis found that late deciders swung massively towards Trump, especially in battleground states. For example, early voters in Wisconsin voted 47% for Trump and 49% for Clinton, but later deciders voted 59% for Trump and 30% for Clinton. The fact that the FBI dropped the investigation two days before the election was likely lost among most voters.
What Does This Mean For the 2020 Election?
At this stage, it seems unlikely that the FBI will make as public an intervention in the election as they did in 2016. However, there remains the question of whether the FBI will be willing to investigate any possible malfeasance when it comes to the electoral process. This could impact the eventual election outcome.
But even outside of the FBI, the 2016 episode does reveal some important differences to 2020. The most important one is that later deciders will be unlikely to determine this election. For one, Joe Biden has much better favourability ratings than Hilary Clinton did, and these are currently better than Trump’s. Biden’s net favourability ratings have ranged from -2 to +2, while Trump’s have hovered around the -15 mark. Therefore, unlike the 2016 one, this election is not between two disliked candidates.
Moreover, there are fewer undecided voters. Biden’s lead is almost as large as the number of undecideds, while Clinton’s lead never reached the level of the undecideds (Chart 1). This suggests that many have already made their decision and will avoid waiting for last-minute developments to make up their minds. This also means that Biden needs only to capture a small proportion of undecideds to win the election, unlike Clinton, who had a much bigger task.
So, in light of all the talk of 2020 being a re-run of 2016 where polls got it wrong, we note that the dynamics today are very different. They suggest that, with current polling, Biden could well be in a good position to win the election.
Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.
(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.)