Buy the dip: Bet on Trump
If there was one piece of useful stock market advice this year, it was “buy the dip” — that is, assume that the market value will form a “V” with a steep and deep decline and then a sharp and strong recovery. So, many bought into the market in mid-March, after the deep decline, with the confidence that government bailouts plus underlying economic strength in many key parts of the economy (e.g., high tech and professional services) would be lightly affected by the coronavirus lockdown and bounce back fast. They made a lot of money.
Certainly the political fortunes of President Trump have followed the first part of that curve so far this year and his poll numbers are down. But I’d argue, buy the dip.
Trump began this campaign year with a promising strategy. The economy was doing very well and he could claim his economic policies led to record economic performance and job creation, leaving everyone, including minorities, women, union and LBGTQ workers, in better shape than they ever had been. His immigration policy slowed the trend of undocumented workers taking jobs from women, minorities, union and LBGTQ workers. His tax cuts benefited businesses and the wealthy, but the results also disproportionately benefited the middle class and poor. Cities were relatively calm, with far fewer violent protests than the previous eight years of President Obama.
Trump’s foreign policy forced NATO members to live up to their responsibilities in Europe and strengthened defenses against Russian pressure. Trump launched critical trade and security pushbacks against China, and contained aggression by North Korea and Iran. He moved to withdraw America from several pointless shooting wars and didn’t engage in any new and unnecessary ones. He defeated threats at home — among them, the failed Russia collusion theory, accusations that his campaign paid hush money to porn star Stormy Daniels, attacks on his Supreme Court nominee, Brett Kavanaugh, and of course, impeachment.
But his political strategy collapsed over a 90-day period. COVID-19 lockdowns destroyed the economy and urban riots jolted Americans. The mainstream media and social networks stepped up their withering and relentless Trump-attacks. Statistically meaningless (increased testing and obvious selection bias) COVID-19 “cases” data were weaponized into a strategy of continued lockdowns and sustained school closures. Trump’s support across all major polls collapsed to a degree that many expect a rout of Republicans in their races to control the White House, Senate, and House. Cities have been trashed, and tens of millions have lost their jobs, savings, homes and retirement accounts. Grammar school and high school students are perhaps wondering if their futures have collapsed. It all seems linked to an unprecedented effort to defeat Trump.
Such anti-Trump strategies have been wildly successful. Fence-sitting moderates, while remaining fearful of a tidal wave of progressive programs, yet fully repulsed by Trump’s personal style, and discouraged or depressed by the lockdowns and urban unrest, likey consider Democrat Joe Biden a “safer” alternative in the White House.
Trump’s responses have been ineffective and inarticulate. His traditional self-promoting, dismissive and painfully inarticulate style has lost traction and become disheartening to his supporters. The COVID-19 lockdowns have prevented him from utilizing his trademark rallies to fire up his base. A large Republican National Convention, which could have showcased excitement from a huge group of supporters, has been scrapped. His clear advantages in facing off against Biden may be sidelined.
But Trump’s most profound failure has been in governing. Leading the country is not just about having great ideas; it is largely about organizing, managing and persuading. Trump has been the most effective president in creating opportunities for union members, women and minorities, but he hasn’t convinced anyone of that. Trump has been one of the strongest supporters of the military, with larger budgets and avoiding unnecessary shooting conflicts, but he hasn’t gained Department of Defense support. Trump has been one of the most effective managers of foreign policy in recent memory, but he hasn’t convinced the foreign policy community.
With prison reform and, until the pandemic, record-low unemployment for minorities, Trump has been the most effective civil rights president in recent memory, but no one can forget his appeal to the racist vote during the 2016 Republican primary, combined with his clumsy handling of incidents such as the Charlottesville Unite the Right rally, and he will lose the African American vote. In spite of Biden’s race-baiting, support for undocumented immigrants who take jobs from minorities, and patronizing programs for more public aid — rather than the promising private sector jobs provided by Trump — Biden will dominate the African American vote. Trump has failed to convince mothers that he avoided sending their children into pointless wars.
“Political vacuum” is the best description of Biden, and radical progressives understand that. They have surged in to take over his campaign. Biden is little more than “not-Trump,” but the president has been a complete failure at playing his winning hand.
Yet, American voters are centrist pragmatists and understand the Faustian deal between Trump and his awful style but reasonable results, and not-Trump-Biden and the coming radical progressive nightmare, especially with the optics of protesters trashing cities. Trump is the Devil-You-Know and Biden is the Devil-You-Don’t-Know because of his changing positions, now moving radically left. Americans often say one thing in public opinion polls, but shift when actually voting.
Trump is down in early polling, but he still has time to make his case. I’d “buy the dip” and bet on Trump — of course, I’ll always take a few points.
Grady Means is a writer (GradyMeans.com) and former corporate strategy consultant. He served in the White House as a policy assistant to Vice President Nelson Rockefeller. Follow him on Twitter @gradymeans1.