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Street Cred: Anatomy of a Trump Resurgence – Expect the Unexpected

On this episode of Street Cred, Chris Krueger of Cowen Washington Research Group speaks with Jonathan Grella of JAG Public Affairs and PROTEAN Public Affairs. They give historical context around the 2020 U.S. presidential election and share five key factors to watch in the race. They also discuss Phase 4 of the COVID-19 stimulus.

Press play below to listen to their conversation.


Chris Krueger:                 Welcome to our new podcast series, Street Cred, powered by Cowen Washington Research Group. Our resident policy pirates are planning to release interesting, insightful episodes weekly spanning key issue areas. We landed on the title Street Cred since Cowen’s Washington Research Group lives at, and you could argue, lives for that all-important intersection of Wall Street and K Street. In the coming weeks and months, you’ll hear regularly from Jaret Seiberg hosting the aptly named Tip [00:00:30] of the Seiberg, Rick Weissenstein conducting your monthly checkup and Chris Krueger as the dashing leading man in Nightmare On K Street.

                                         Since we’re covering health and biotech, financial and housing, trade and tax, as well as political analysis, you could say that this new podcast series will keep you healthy, wealthy and wise. But only if you rate, subscribe and tell a friend about Street Cred.

                                         [00:01:00] Hello and welcome to my nightmare, Nightmare On K Street, where I, Cowen’s Chris Krueger, will attempt to translate K Street to Wall Street faster than a speeding Acela.

Jonathan Grella:             Welcome to Nightmare On K Street. I’m Jonathan Grella with JAG Public Affairs and Protean Public Affairs. We’re here today on Nightmare to talk with Chris about phase four, as well as the 2020 presidential elections. Chris published a very interesting [00:01:30] piece this week about what Trump needs to do to change the trajectory of the 2020 race. We’re looking forward to a conversation with him about the five keys to a Trump resurgence. Welcome back, Chris. How’s it going?

Chris Krueger:                 Just living the dream. How about you?

Jonathan Grella:             Doing just fine. Let’s cannonball right into the swamp with today’s sharpener, one thing listeners need to know about what’s going on in Washington and along the campaign trail.

Chris Krueger:                 [00:02:00] I think no surprise. Washington is really fixated now on the phase four framework. We continue to believe that the fifth bill addressing the pandemic and follow-on recession is going to get done. It’s a question of when, not if. We suspect it’s probably the first week of August. We now have a bid ask between the Senate Republicans and the House Democrats. Our base case is that this will end up between a trillion and 1.4 [00:02:30] trillion, with about half of it going to consumers and about half of it going to institutions. The big chunks on the consumer side will be another round of $1,200 stimulus checks, as well as some type of reforms for the $600 weekly supplements to the Unemployment Insurance Program. Then on the institutional side, probably some more money for PPP, money to states and municipalities. And then a chunk of money for hospitals and more [00:03:00] testing.

Jonathan Grella:             Next, let’s sink our teeth into the main course. You wrote a very interesting piece about the anatomy of a Trump resurgence. Take it away.

Chris Krueger:                 I think before the five-part how-Trump-gets-his-groove-back or the five things to watch, I though that maybe just putting [00:03:30] some historic context around the two overarching issues in this campaign, which obviously are the recession and the pandemic. While not an apples-to-apples, I think at least putting Trump’s current re-election hole into some specific relief here. So number one, on the recession, the jobless rate is right now around 11%. That’s more than 300 basis points higher than [00:04:00] Jimmy Carter and George H.W. Bush when they lost their reelects. Recessions kill presidential reelections. The second one is the pandemic. 140,000 Americans have died from COVID-19 over the past five months. That’s more than twice the number that died in the Vietnam War, which was over 20 years, which ultimately doomed LBJs re-election chances in 1968. [00:04:30] So I think just putting a little bit of context around those two issues.

                                         But the five things to watch, I think first and foremost, it’s got to be message discipline from the President. Whether it’s treating the pandemic as a crisis and not a nuisance, or putting aside his daily grievances and just really driving a message against Vice-President Biden and getting [00:05:00] Biden’s unfavorable ratings near Clintons in 2016. That dovetails into the second thing I think that Trump needs to do is to really make this election a choice and not a referendum. Whether it’s a Biden gaffe, or linking Biden with some of the more progressive elements of the herbal tea party, whether it’s AOC, or Elizabeth Warren, or Bernie Sanders. But I think every day that Trump makes this a referendum on himself is [00:05:30] a good day for Biden.

                                         Then finally, number five, what we call external forces, the October surprise, if you will, what could that be? Something that refocuses the race on something other than the pandemic and the recession and social strife. So whether that’s a Supreme Court vacancy, a hurricane. Obviously, Hurricane Sandy in 2012 was a seminal moment in the campaign, a national security [00:06:00] event, whether it’s riots, protests, geopolitics, et cetera. When you think about how this race could change, those are the big five to watch. Keep in mind though, that none of those events could happen and Trump’s numbers could continue to deteriorate.

                                         We’re watching a lot of the Senate Republicans who are running for reelection. How are they phrasing their TV commercials back home? A lot of them aren’t mentioning [00:06:30] Trump right now, which could be an interesting thing to watch as Republicans perhaps start to put a little bit of distance between themselves and a historically unpopular president, at least at the moment.

Jonathan Grella:             Very interesting stuff, Chris. It certainly seems like the President needs to lock in and needs to get the wind at his back after an early 2020 series of stumbles. [00:07:00] Finally now, Chris, to send our listeners off by looking smart and seeing around the corner, a tightener, a pearl of wisdom that resides beyond the conventional wisdom. Take it away.

Chris Krueger:                 I think the conventional wisdom here is that the debates are going to be a debacle for Biden. We’ll see. I do think these debates are going to be very different than [00:07:30] 2016 for the simple reason that there’s not going to be an audience. Keep in mind too, the last two presidents who’ve run for reelection, George W. Bush and Barack Obama, both of their first debates were catastrophically bad, I think, by most nonpartisan analysis. Presidents aren’t used to having people push back on them. Now, having said that, just the two things to watch, [00:08:00] number one, a lot of people will have already voted before the first debate in late September. As we’ve been saying, the election doesn’t begin on November 3rd, it ends. So a lot of the vote is going to be locked in before November 3rd.

                                         But number two, this idea that maybe Biden won’t debate. You’re starting to see more and more key stakeholders make the argument that Biden’s strategy of campaigning from the basement in Wilmington is working. [00:08:30] Why would we put him in harm’s way in a debate stage with Trump? The argument being we’re not going to debate until Donald Trump unveils his tax returns. Why do a debate without the tax returns? I’m not sure that’ll work, but I do think it’s something to keep an eye on, because a lot of the bull case for Trump closing strong [00:09:00] revolves around the debates. If you take those debates out of the equation, that changes, I think, a lot of potential trajectory. So something to keep an eye on. Not sure it’ll happen. But you heard it here first.

Jonathan Grella:             Very interesting stuff, as usual, Chris. Thanks very much for your time. You’ve been listening to Cowen’s Street Cred and Nightmare On K Street. I’m Jonathan Grella and this was Chris Krueger.

Chris Krueger:                 Thanks so much for listening. The pleasure has all been on this side of your ear buds. This has [00:09:30] been Cowen’s Chris Kruger letting you know this wasn’t a dream. This has been Nightmare On K Street.

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