US Elections: Politics Toying with Financial Markets

elezioni Usa 2016

In the US, the race for presidency is a long process that includes primaries, caucuses and national conventions, in which the parties’ candidates are determined. The main popular vote on who is going to be president of the US is called general election and will take place on the 8th November this year.

In the general election US citizens vote for one president and one vice president. However, these votes only elect people known as electors, who will then vote for the president and vice president in the name of the people whom they represent. Each state has a predefined number of such electors, and the candidate with the majority of a state’s electoral votes gets the support of all electors of this state. That is why states with a large number of electors, such as California, Texas or Florida, have the biggest impact on the presidential election. To be elected president, a candidate has to get more than half of all electoral votes, which is at least 270 votes.

Many states are traditionally Democratic or Republican, except for the so called “swing states”, where the divide between red and blue is narrow and a few votes can be pivotal for the outcome of the election. These are the states whose polls and first counts can help to forecast the election result before states on the west coast even close their polls.

The 2016 Election

This year’s presidential election differs from those in the past in many aspects. Hillary Clinton, former First Lady and Secretary of State is running candidate for the Democrats and could be the first woman in the oval office. Donald Trump, real estate mogul and talk show master is the Republican’s candidate and could be the first politically unexperienced man in the oval office.

Both are among the least popular candidates ever in a US presidential election, which is due to an ideological spread in the population that cannot be covered properly by two people alone.

Clinton is the candidate perceived as yielding stability and continuity in the US. She is experienced in US politics and has been praised for her diplomatic and pragmatic approach to negotiations. Her goals are similar to the Democrats’ general stance and coherent with Barack Obama’s decisions in many aspects. She aims for modest tax cuts in the middle class and higher taxation for incomes above $5m a year. Infrastructure, renewable energies, child care and education are sectors which will profit increased government spending during her presidency. Besides, she plans to cut oil production, restrict drug prices and implement stricter gun laws, which will have major effects on these industries. Contradicting earlier statements, she has recently taken an opposing stance towards international trade agreements and might strive to renegotiate among others the Trans-Pacific Partnership Agreement.

Trump is the candidate causing worries about future US politics in the international community. He is known for his undiplomatic behaviour, sexist and racial statements and a lack of political experience.

His presidential goals involve cutting taxes across all income levels and corporations, while simultaneously stepping up infrastructure and military spending and reducing the current account deficit. It is most likely that he will implement the first two but increase the deficit. Besides Trump’s strongest calls are about renegotiating or breaking up trade deals, implementing protectionist tariffs and deporting millions of illegal immigrants, in addition to building a wall on the southern border of the US. These goals cause most uncertainty in the international community and are most appealing to his core voters at the same time.

Many of Trump’s statements are contrary to traditional conservative perceptions but nevertheless he is closing the gap between himself and Clinton in the polls.

There are two reasons for this.

Firstly, one has to acknowledge that sentiments towards global trade, movement across borders and international cooperation have changed and people are more anti-trade, anti-immigration and anti-cooperation than ever before. A growing segment of the US people desires a radical shift in politics, to focus on increasing national prosperity rather than international commitments and this is exactly what Trump promises.

Secondly, many people claim to vote for Trump only because his adversary is Hillary Clinton. Part of the population has lost trust in the non-transparent political-financial complex in the US and wants to see change. Clinton personifies the old system and, therefore, she finds opposition. Furthermore, she has done a bad job in sustaining her integrity and credibility with an email affair, currently being investigated by the FBI. Many people do not trust her anymore and prefer the controversial but honest stance of Trump.

 

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