Reflections on Elections

Nov 10, 2020 | Uncategorized

On Election Day last Tuesday I made the safest non-prediction prediction ever made when I wrote “The sun will come up tomorrow, and it will seem brighter for about half the population and darker for the other half.” In a sharply divided country, that was a pretty safe bet for the presidential election but most of the other results were mixed.

A few observations about last week’s elections.

  • The presidential race was (and still is) a mess. A week later President Trump still has not conceded. That’s all I want to say on that issue.
  • The Democrat ‘blue wave’ did not happen as predicted by the media and pollsters. The left wing of the party had become its voice and face. In a still right-of-center country, riots, anti-racism by advocating racism, defunding police, statue toppling, open advocacy of socialism, and history rewriting is as off-putting for many people as Trump’s macho braggadocio is for others. And, the post-election chatter from the far left about compiling ‘enemies lists’ and ‘reeducation camps’ is not a good look either.
  • Most blacks and Hispanics voted Democrat, but Trump got a lot of minority support.
  • Advocating extreme social and environmental policies at the expense of lunch pail issues like a strong economy and jobs may not be a winning strategy for Democrats. For evidence, look at what happened to Congress, governorships, and state legislatures where status quo prevailed with a small tilt toward Republicans:
    • The Democrat majority shrank in the U.S. House by a still-to-be-determined margin but 6 seats at this writing. This is certainly not the Democrat supermajority some predicted.
    • At this writing with two races pending, Republicans still control the U.S. Senate.
    • Beginning in 2021 Republicans will hold 27 governorships compared to 23 for Democrats after picking up a seat.
    • There are 99 state legislative chambers in the country. (Remember that Nebraska has just one legislative chamber.) Going into the 2020 elections, Republicans held 59 chambers compared to 39 for the Democrats. At this writing two more chambers became Republican controlled.
  • So what to make of all that? After all the sound and fury, hundreds of millions of dollars being spent, family and friend relationships being stranded, except for President – which may be enough, if you’re a Democrat – not much really changed. There does not appear to be a mandate for a Biden agenda (except that he’s not Trump), so it will be interesting to see how he tries to govern (again, assuming his current lead holds up).
  • The state political scene stayed firmly Democrat but status quo, meaning the ‘blue wave’ of 2018 did not repeat itself. They picked up a seat in the state Senate and no gains in the House. The biggest pick up for Democrats was the U.S. Senate seat by John Hickenlooper.
  • Regarding state ballot measures, Coloradoans voted for Proposition 116 to decrease the state income tax rate; passed Amendment B to repeal the Gallagher Amendment (effectively stopping a significant cut in residential property tax rate); passed Proposition 118, which is a big payroll tax on themselves for medical and family leave; and passed Proposition 117 requiring a vote to increase fees over a certain level. Regarding Prop 118 (medical and family leave), I agree with political commentator Eric Sondermann who wrote “The family leave initiative is a triumph of good intentions over details. If you like the financial mess that is Colorado PERA, you will love what this program looks like five or 10 years down the road.” Good intentions aside, in short, this will be a confusing and expensive new program.
  • The 2021 Legislative Session will be an important one for Democrats. Since they are completely in control, they own leading the state through a difficult economic recovery. Here’s wishing them good judgement, good luck, and moderation.
  • Why do we bother to listen to pollsters?

What does all of this mean for business? If things hold as are now – Biden wins the presidency, the U.S. Senate stays Republican, and the U.S. House stays Democrat – it will be a mixed picture. If Biden reverts to the regulation-heavy days of the Obama administration, that will be a big negative. On the other hand, divided government means the two political parties will have to work together and compromise to get anything done. That’s a winner.

From a state perspective, the fiscal condition of the state government and the economic challenges of Colorado businesses and residents will probably limit the overreach that is typical of one-party control. That too is a winner.