The results of next week’s US elections will have profound effects on markets, economies, and the global system. Voter choices and their influence are unlikely to lead to more mixed results.
If the polls are correct and the elections produce a “blue wave” that gives Democrats control over both the House and Senate, it will in some ways be a return to a more natural presidency and the United States, albeit perhaps the most progressive agenda of any US presidency since Franklin D. Roosevelt.
If Trump and the Republicans retain control of the Senate and maintain control of it, the future will be less clear – no Republican program published for a second term – but it seems reasonable to assume more of the same.
Continuation of isolationist and protectionist “America first” foreign trade and trade policies, continued aggressive attitude toward China, further liberalization of the domestic economy, more tax cuts, reopening the economy in a more aggressive manner, and even more politicized and less professional, bureaucracy and more government through Twitter.
There is of course the likely outcome where Biden wins the presidency but Republicans retain control of the Senate, which could mean a smaller fiscal response to the pandemic and a less urgent approach to implementing Democrats’ highly ambitious policies on the environment and climate change.