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As midnight approached on November 8, 2016, and certainly as dawn broke on the East Coast, it had become apparent that Hillary Clinton would win the national popular vote but that Donald Trump would win the Electoral College vote to become the 45th President of the United States. But when dawn breaks on November 4, 2020, will we know who will be sworn in as president on January 20, 2021? And what impacts would any delay or ambiguity in the results of the election have on our economy and our democracy during a time of heightened partisan divisions and an ongoing global pandemic?
This essay endeavors to explore these weighty matters. Both the mechanics of varying state election laws and the greatly increased use of mail-in voting make it quite likely there will be no clear winner on November 4, and perhaps for many days thereafter. Although our country has proven to be remarkably resilient during election controversies determining past transfers of power, our current polarized environment may well lead to more turbulence and potentially widespread civil unrest this year. For the sake of our democracy, our economy and our need to meet the challenge of the pandemic, we nonetheless hope that our fellow citizens will know for certain by the time they gather for a meal of Thanksgiving who will swear to “preserve, protect and defend the Constitution of the United States” on January 20.
Investors and C-suite executives here and abroad have much about which to be concerned. The potential impacts of a result of a period of prolonged uncertainty and unprecedented turmoil in the US economy following next month’s election cannot be good for financial markets or business planning. As if to drive the point home with absolute clarity, the middle-of-the-night revelation made earlier this month that President Trump and First Lady Melania Trump had tested positive for the coronavirus disease 2019 (COVID-19) rattled Wall Street and other financial centers across the globe. The previous day, the New York Times had reported that “[i]nvestors have spent recent months pushing the stock market to record highs, seemingly undeterred by the worst pandemic in a century and the enormous toll it has taken on the United States economy. But now, politics is giving them agita. In the last few weeks, the market’s results have reflected the uncertainty weighing on investors’ minds as they prepare for what could be a politically turbulent stretch — including a Senate fight to fill the former Supreme Court seat of Justice and the November presidential election, which could result in a constitutional crisis.”
And that was before the news broke about the Trumps’ diagnosis. Early on October 2, as the New York Times reported, “[t]he S&P 500 was down about 1 percent. The news rocked other markets too. The benchmark Stoxx Europe 600 ended slightly higher after a turbulent day. In Japan, where the news broke late in the trading day, stocks finished nearly 1 percent lower after erasing early gains. Oil futures also slid, with Brent crude and West Texas intermediate, the two main benchmarks, down more than 3 percent. Prices for other commodities fell, too.” All that after the President and First Lady had tested positive.
Let us roll the tape forward.