If Trump Wins…

Trump enjoys the momentum.

Four of the most recent major national polls show him up 2 to 3%, while Democratic-friendly outlets like the New York Times and CNN both show a TIE race in their final surveys.

The 2016 and 2020 elections were razor close even though Clinton (5%) and Biden (8%) had solid polling leads at this point.

We need to contemplate a Trump win not only in the electoral college but also in the popular vote.

Here are some thoughts:

1. JD Vance ascendant, obviously. Big implications for the Republican trajectory.
2. Will Trump replace Fed chairman Jay Powell? Or merely jawbone for a change in policy? In a new CNBC interview, former Fed governor Kevin Warsh argues that the Fed has juiced both the stock market and inflation. Would reducing inflation, which Trump has promised, automatically therefore lead to a stock market correction and economic slowdown? Not necessarily. If Trump unleashes productive economic activity and Congress ends the fiscal blowout, the Fed could normalize monetary policy without causing a major economic slump.
3. Will Trump impose the broad and deep tariffs he proposed? Or will he mostly threaten them as a bargaining tool with China? I’m betting on some of the former but more of the latter. We notice, however, Trump allies are floating a trial balloon to replace income taxes with tariffs. As impractical and improbable as that may be, we’re glad to see the mention of radical tax reform reemerge after too long an absence from the national discussion.
4. How will he organize the “deportation” of illegal migrants? In the best case, it will be difficult. There will be scuffles and chases. Critics will charge the new Administration as cruel and worse. How much stomach will Republicans have for a messy process? One idea would be to offer a “reverse amnesty” – if you leave peacefully and agree not to return illegally, we will forgive your previous illegal entry(s) and minor violations. This would incentivize self-identification and quiet departure. Plus it would help authorities track those leaving. Would migrant departures truly hit the economy, as critics charge? We doubt large effects. Substantial native populations are still underemployed or absent from the workforce.

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