In January, Dexter Van Dango predicted that Hillary Clinton would win the 2016 Presidential election. In the last issue of Monitor before Election Day, he examines what’s happened in the race so far and discusses what a Hillary Clinton administration will mean for the economy and the equipment finance industry.
General George S. Patton once said, “Accept the challenges so that you may feel the exhilaration of victory.” Well, I hope to be victorious in my latest challenge because it is one heck of a doozie!
It is mid-August as I begin to write this article about the 2016 U.S. presidential election with a deadline of September 2. The publication will be released in mid-October, just a few weeks before Election Day. It feels like a daunting task because, at this stage, it is impossible to know what is ultimately going to happen. The amount of turbulence, volatility and nastiness is unlike any election before. The most popular candidate appears to be ‘none of the above.’ Nevertheless, I accept the challenge and hope you enjoy the read.
As I look at the August 22, 2016 cover of Time magazine with the headline “Meltdown” next to a withering, melting, Trump-like figure, I think about what might have happened in a 2016 U.S. presidential election without Donald Trump as a candidate. Might a Jeb Bush, Ted Cruz or Marco Rubio have cooed the rightwingers and centrists into voting for him? People don’t like Donald Trump, and they don’t like Hillary Clinton, either. In an ABC News/Washington Post poll of registered voters, both candidates had unfavorable ratings: 59% for Clinton versus 60% for Trump. How did we get to this point?
Back in my January TOP Picks article, I threw out a prediction that Hillary Clinton will win the 2016 presidential election over an unnamed opponent. At the time, I considered naming Donald Trump as the loser, but really felt it was too outrageous and preposterous to make such a claim. How wrong I was.
What may be most astounding about this year’s presidential campaign is how polarized the American voters have become. Whether they are passionate Bernie Sanders supporters, angry Trump followers or loyal Clinton devotees, there remain serious areas of disagreement, resentment, malevolence and rage. There have been accusations by Sanders, which later proved to be somewhat accurate, that the system is rigged. Trump is now posturing and prepositioning similar claims of rigging, as the gap between him and Clinton widens, much to his chagrin. His supporters are threatening civil uprisings if Trump is not elected — the only acceptable outcome of the race for this raucous crowd.
Trump: From Teflon to Easy Target
Since announcing his campaign in June 2015, Trump appeared to be Teflon coated. Nothing stuck to him, and he knew it. In January, Trump stated, “I could stand in the middle of 5th Avenue and shoot somebody and wouldn’t lose any voters, okay? It’s, like, incredible.” He was referring to the loyalty of his followers. However, some of that Teflon may be beginning to crack. Several senior GOP insiders have denounced Trump and have publicly stated that they will not be voting for the Republican nominee. These include former candidates Jeb Bush and John Kasich, along with Senator Mark Kirk, staunch Republican Meg Whitman and two former presidents named George Bush.
In August, a list of 50 top Republican national security experts, led by former CIA Director Michael Hayden, wrote a letter claiming that Trump “lacks the character, values and experience to be President.” The letter continues: “He weakens U.S. moral authority as the leader of the free world. He appears to lack basic knowledge about and belief in the U.S. Constitution, U.S. laws and U.S. institutions, including religious tolerance, freedom of the press and an independent judiciary.”
Trump’s response? He called them idiots and claimed that the same group of people was responsible for the mess in which the U.S. finds itself in the Middle East. Oh, and he included Clinton and Barack Obama among the guilty parties. While he was at it, Trump also labelled President Obama as “the founder of ISIS,” a jab that he later tweeted and then claimed was sarcasm.
For a short period following the Republican National Convention in July, Trump pulled within low single digits of Clinton in several polls. A week later, following the Democratic National Convention, Clinton regained her lost ground and more. By most counts, her lead was in the double digits and growing. How did Trump respond? He told a Wilmington, NC crowd that if Clinton gets elected she will appoint liberal Supreme Court justices. “By the way, and if she gets to pick — if she gets to pick her judges, nothing you can do folks. Although the Second Amendment people, maybe there is, I don’t know. But I’ll tell you what — that will be a horrible day.” The second amendment comment riled up the media and earned Trump a visit from the Secret Service for a discussion about inciting violence.
“Crooked Hillary” is what Trump calls her. He says that she lied about her missing emails, lied about getting permission to use a private server, lied about Benghazi — what she knew and when she knew it, and on and on. At first, you could see the exasperation in Clinton, sensing her need to respond to each accusation. Now she seems to be growing immune to Trump’s senseless rants.
Clinton: A Career Candidate
Keep in mind that Hillary Clinton has been running for president for more than two decades. She steered the campaign of Bill Clinton in 1992 and frequently used the pronoun “we” when referring to how the administration would handle issues. I clearly remember sitting in my recliner on a Sunday evening in January 1992 following the Super Bowl, watching 60 Minutes when host Steve Kroft got a little too patronizing of Clinton regarding her role in the Gennifer Flowers affair, when she blurted out, “You know, I’m not sitting here — some little woman standing by my man like Tammy Wynette. I’m sitting here because I love him, and I respect him, and I honor what he’s been through and what we’ve been through together. And, you know, if that’s not enough for people, then heck, don’t vote for him.”
She continued, “We’re going to do the best we can to level with people, and then we’re going to let them make up their minds. Because I think if the American people get a chance, and if they’re trusted to exercise their vote right because people talk to them about real issues, this country will be OK. That’s what we are betting on, and we’re just going to roll the dice and see what happens.” We, we, we. At the time, I turned to my wife and said, “Oh my God, she wants to be president. We’re going to have to put up with 16 years of Clintons.” That was in 1992. Now, 24 years later, she is about to achieve her goal.
Unlikelihood of Invoking Rule 9
I could be wrong. Between now and election day Trump could suddenly lose his arrogant, pompous, bombastic style and become humble, gracious and presidential; but I highly doubt it. He could get hit by a truck, struck by lightning or simply quit because he feels that he is not being treated fairly by the media — perhaps a more imaginable outcome, but again, not likely.
Republicans are panicking. The hairline of Reince Priebus, chairperson of the Republican National Committee, is receding faster each day as he fights to control the tumultuous Trump firestorm. There is hushed talk of invoking rule 9 of the Republican National Committee, which governs “Filling Vacancies in Nominations.” The rule states that if a candidate leaves the race for any reason, the vacancy may be filled by the committee or by reconvening the national convention. With little time between now and the election, there will not be a reconvening of the national delegates. An August BBC article suggested that ‘mental instability’ may be cause for removal of the candidate. Good luck with that one. Can you imagine the lawsuits Trump would hit the RNC with if they tried to pull a stunt like that?
Nope, it won’t happen.
The election will go on as scheduled, and Clinton will win as predicted. The “haters” will trade their racism for misogyny, but little else will change from what we have experienced during the past eight years. Some have called it “Obama’s third term.” I don’t agree. Clinton has chased this goal for too long to allow it to be viewed as a continuation of someone else’s agenda.
Envisioning a Clinton Administration
Clinton wants to make history. She wants a legacy. She will start with the Supreme Court. There is a good chance that the Senate will approve President Obama’s nominee, Chief Judge Merrick Garland, after it becomes apparent that Clinton could nominate someone far more liberal. One can also envision both Justices Ruth Bader Ginsburg and Stephen Breyer tendering their resignations during the first Clinton term. Clinton will seek a strong female replacement for Ginsburg, but don’t be surprised by who she chooses to replace Justice Beyer. I predict that it will be none other than esteemed President Barack Obama.
Clinton is not likely to rock the boat with the Federal Reserve, which means that fiscal policy will favor a gradual increase in interest rates as long as inflation and joblessness are kept in check. Expect the current low interest rate environment to continue into the foreseeable future.
Foreign policy is a genuine concern. The Middle East is a mess, and she knows it. Expect her to nominate a seasoned Secretary of State with support from both sides of the aisle. She also will bring in a strong military leader for defense, someone like John Abizaid, former leader of U.S. Central Command. She also will need a strong leader of Homeland Security. She may ask the current Secretary, Jeh Johnson, to stay on in that role.
Then there’s the Bernie effect. Clinton had to bend her platform a bit to accommodate Sanders and his followers. Due to Sanders’ influence, Clinton will attempt to modify how students pay for public education. She may not go so far as to make it free, as Sanders demanded, but I do expect her to come through with a solution that will be favored by Sanders’ supporters.
Finally, look for economic growth during the Hillary Clinton administration, because history tends to repeat itself. During the Bill Clinton administration, economic growth averaged 4%, significantly better than the Reagan and Bush administrations. Marked by fiscal discipline and deficit reduction legislation passed in 1993 and 1997, Bill Clinton achieved a measurable reduction of the national debt. Hillary Clinton won’t be quick to raise taxes on the well-to-do donors who helped get her elected, but she will push for a revamp and simplification of the tax code. She is also pushing for a 4% surtax on the ultra-rich.
With continued low interest rates, favorable economic growth, low unemployment and controlled inflation, the leasing and finance business should fare well for the next several years.
Please keep in mind that this is all simply Dexter’s opinion … and Dexter doesn’t exist. He is a figment of my imagination.
Moritt Hock & Hamroff counsel Theresa Driscoll takes a look at the recent Second Circuit Momentive decision and uses it to examine the importance of clarity in drafting loan documents and understanding what loan documents say, especially when a lender needs to enforce its rights.