Freddy Colquhoun, JM Finn
Welcome to this webinar. We're focusing today on the US presidential election, that's coming up quite quickly now, at the beginning of November. I'm delighted to say that I've got Freddy Gray here with me and he's the editor of the spectator US and some of you may remember him from our 2018 investment conference at the Oval. Freddy, is one of the better-placed people to talk to us about the election, the campaign, the ramifications that may have both from the US and over in the UK here. I am delighted to say he's given up some time this morning. Freddy, first question to you: As you are seeing things today, we are a few weeks away from the election, how close do you think this contest will be? And if it is going to be an extremely close run thing, what are the likelihood of it being contested?
Freddy Gray, Spectator
My impression is that this is going to be an extremely close election. I would ignore the national polls, which shows Biden has clear advantage and look at the battleground states that are looking very, very tight. If you look at Florida as is often seen as the key state, that is now looking slightly favourable for Trump, which would mean that the race will go absolutely down to the wire. I would say one thing that a lot of pro Trump pundits and analysts are missing, is that there are certain states where Trump won in 2016 that are looking a bit weak, like Georgia possibly, Ohio, Arizona. So, whereas the, sort of the famous battleground states, which are Michigan, Wisconsin, Pennsylvania, and Florida, they could all go for Trump, but he could lose certain other key states, which would mean he slips up. But let's assume that it's a very, very close run thing. And I think it will be.
I think the real nightmare scenario, and I imagine from an investing perspective, an absolute disaster is, that we will have no certain result within a week, perhaps even a month of the election; and if that sounds hysterical, bear with me, because, there will be a lot of mail-in ballots, and there's already furious fights taking place over mail balloting, so the scenario that a lot of people think is going to happen is that, on election night itself, you have a Trump win, a clear Trump victory, and then in the days that follow, mail-in ballots will sort of undo that result. You may have a scenario where Trump declares victory on election night and then it is contested in the days that follow. And what happens then is, kind of up in the air. I mean, it could be a serious disaster; there's a thing called the Transition Integrity Project, which is run by a bunch of Democrats and sort of anti-Trump Republicans and they looked at various scenarios and the worst possible scenario was a Trump win, because the Democrats would contest it and then they would possibly, if they didn't trust the result, they would ask California to succeed from the union and to break up possible into five states. So, if Trump wins again by a narrow margin or contestable margin, we are looking at, a sort of social breakdown. And I know that sounds hysterical, but, if you’ve been following America closely, you'll know that I'm not really exaggerating.
Freddy Colquhoun
Thanks for that. That's a little bit disconcerting, but we’re a few weeks away from the election and clearly, this election is really quite a lot about COVID and the response to COVID, and we've seen over the last few months, that the situation is getting worse, but perhaps it seems like it might be plateauing a bit. How would you read the next few weeks with regards to COVID? Is it going to benefit Trump more than Biden or is it not as simple as that?
Freddy Gray
I think Trump's COVID response is a loss for him. I think the wider impression, the majority impression is that Trump was a bit scrambled by COVID. He started doing the daily press briefings at the height of the crisis, and that was not really very helpful for him because he seemed to be totally out of his depth and he had a tendency to ramble and in a really great national crisis, I think a lot of people thought we need a serious leader and this is not a serious leader. However, I do think the Democrats tend to overemphasise what a win COVID is for them. And often they all seem to be cheering on COVID, which is not a good look for any political party. One issue that the Democrats don't want to get absorbed in is COVID, rather than Medicare, because in 2018 in the mid-terms, they won quite significantly by stressing Medicare and the line was, “You can't trust Donald Trump with your health care.” But because COVID has sort of blown up everything and so dominates the news agenda now, it's really the only healthcare people are thinking about. So they're not thinking about the Obamacare and whether Trump will tear that up. They're just thinking about COVID and to a large extent, Trump has made treatment federally covered, so it's not a money concern for most people – there may be issues about that, we'll find out later; but for now, it's about whether Trump handles the pandemic well, it's not about whether you can trust the Republicans with Medicare, and that normally is a big win for the Democrats, but COVID has sort of taken that out of the equation.
Freddy Colquhoun
That is one of the sectors that obviously is very impacted by the result of the presidential election, health care. I just want to move on to two of the others that are very much in the spotlight, which include the energy sector and technology, of course, both big constituents of the S&P500. Very different views between the candidates on energy, but perhaps a little bit more togetherness on technology and what to do with taxes on big tech companies. Do you have a view on both of those sectors?
Freddy Gray
On energy, Biden really doesn't have many original ideas. I mean, there's a huge, lengthy manifesto, various manifestos on his website, but really you'll see a return to the pre-Trump setting with a Biden administration. So essentially, everything that Obama did Biden will carry on doing, perhaps even more emphasis on the green new deal because the Democrats know that’s a big driver for them. So you will see a huge investment in green technology if Biden wins and so on, and we will not get that with Trump because he pulled out of the Paris Accords; I think Biden will get America back into the Paris Accords very quickly. And, as for technology, I think it’s very interesting. I would say that big tech would probably be wanting a Biden victory because Trump has made quite a lot of noise but he hasn’t actually done anything. Quite what you could do, is a bigger question about big tech censorship – that’s one of his big beefs. You know, this idea that Facebook, Google and YouTube all restrict free speech if it's conservative and it's the major issue, it really annoys a lot of right-wingers in America, and it's a good vote driver. But quite what Trump can do to tackle these giants, which are now really more powerful than government is another matter. So I think on tech, I would say big tech would bet on Biden, and on energy, green energy would be very infused by Biden. He has promised he isn't going to stop fracking, but then he’s given them quite mixed signals on that; he has to appeal to the Green wing of his party, that is very anti-fracking.
Freddy Colquhoun
You were very much involved in Trump's 2016 campaign; I'm just looking at Trump's campaign this time and ultimately, if Trump was to win in 2020, what actually is he actually going to do for the next four years? What is the manifesto this time from Trump?
Freddy Gray
Well, his manifesto now is quite an odd one at the moment, because it's sort of saying, it's looking a lot at the Black Lives Matter riots and saying, this is what will happen to America if you don’t elect me and re-elect me. And this is an odd position for a president to have, because essentially what he's saying is, vote for Trump to stop the things that are happening under Trump from happening. So whether that works as a message, I don't know, but as for what Trump does until 2024, I think you may see a big tech fight. I think you’re going to see him try and make good on things like the wall, the wall promise. You will see him try and make good on various other areas; he will withdraw from Afghanistan, I would have thought - he’s been trying to do that for a long time and there are talks ongoing at the moment and there will be a lot of the neocons within his administration, a lot of the war-hawks, will be very keen to strike Iran as soon as Trump is re-elected, whether Trump is committed to that is a matter for debate. But I would have thought the Trump administration will be dovish in terms of foreign policy, withdrawing from foreign wars, with the possible exception of Iran, but you might have a military strike quite soon after he is re-elected.
Freddy Colquhoun
So that leads nicely into what my next question was going to be, moving into geopolitics a bit here, who do you think China and Russia would like as the next president of the United States between the two candidates?
Freddy Gray
China is trying to put out through official channels that they will be quite happy with a Trump re-election - I think that almost certainly means they wouldn't be. I think as far as China is concerned, Trump is a big headache for them, and they’d much rather he went away. Biden famously had a pretty good relationship with China when he was vice president; he famously said: “Do you think China is going to eat America’s lunch? Come on, man.” Biden doesn't really want to regard China as a threat to America, Trump really does. So in terms of China, I think they definitely want Biden.
Russia is a bit more peculiar because I think having wanted, famously, Trump to win in 2016, they now are also a bit muddled by him because Trump is so compromised on Russia, there's so much suspicion around his relations with Russia, that he's had to be much tougher on Russia than you normally would be. So I think Russia would be ambivalent, as far as we understand from their bots - they want to cause depression and chaos in America and they seem to be doing a pretty good job of that.
Freddy Colquhoun
Moving on to the UK, of course we’ve got our ongoing negotiations with the European union, but also the US trade negotiations are ongoing as well. How will the result impact those negotiations? I mean, we saw Biden come out to state his support for the Good Friday agreements; it seems on the surface that our prime minister would probably prefer a Trump victory, but again, is it as simple as that?
Freddy Gray
I don't think it is that simple because there are a lot of Tories who just aren't very comfortable dealing with the Trump administration because the Trump administration is quite crazy. So I think, even Brexiteers, would in their heart of hearts admit that they prefer to deal with the Biden administration because the Biden administration would be very similar to the Obama administration, which famously had a good relationship with us. In terms of what is best for Brexit Britain, I think you probably have to say a Trump re-election because Biden will return to, as I say, pre-Trump settings. Obama famously said Britain will be at the back of the queue in any future trade talks. I think Britain will find itself back there if Biden wins. And I think his intervention on Ireland recently suggest that's definitely the case.
Freddy Colquhoun
Just returning to domestic US politics, although this has branched out to a global perspective as well, and I'm focusing this time on black lives matter. Clearly it's had a big impact over the last six months for both candidates. Do you believe the black lives matter will continue beyond it yet the November election? And from an outsider's point of view, looking in on the US, do you think it is a benefit to the US this movement, or actually, is it to the detriment of the US?
Freddy Gray
When it happened, there was a moment when George Floyd was killed and that horrible video was circulated everywhere, there was a clear moment, an outcry, which was significant. There's no denying that that was significant, but I think that what happened afterwards, the riots that went on, that a lot of the media insisted on calling protests when they were clearly just devastating riots. I think that is perhaps the one thing the Democrats could have got wrong that would make them lose the election and amazingly they did get it wrong. It took them weeks to condemn violence on the streets. Um, and Biden and Kamala Harris were very reluctant to condemn protests that had the affiliation of black lives matter, because of course anti-racism is the key democratic mantra. I think a lot of voters, although they often might not tell pollsters, were horrified by the riots in America. I think that if Trump is re-elected, we will look back at the black lives matter protest that turned into riots and say, this is the moment that he won.
Freddy Colquhoun
My last question to you. I have to put you on the spot slightly now, given your esteemed position as the editor of the US Spectator. Who will be the next president of the United States?
Freddy Gray
I would go with my first prediction, which is a bit of a fudge, but I'm afraid I have to is that it's going to be a contested election. This will go right down to the wire to go into the Supreme court, which is just becoming more interesting and that you will not know the winner by November 10th and by January… I'll go with Trump re-election, but it's anyone's guess.
Additional section:
Freddy Colquhoun
Just on Brexit, Freddy, I believe that you know a bit about Biden's views on it don’t you?
Freddy Gray
I had quite a funny encounter in February, in the pre-COVID era, I suppose. I met Biden at a town hall in New Hampshire and, there was quite loud music, perhaps he couldn’t hear what I was saying, but I asked him what his approach to Brexit would be, Brexit Britain I said. And he said, who? And so I repeated it and he said, what? And then I finally screened Brexit, Britain, Boris Johnson in his ear, and a sort of faint element of recognition flashed across his brain and he mumbled Boris, and then he wandered off. I relay that story, jokingly I hope - I don't think it's just a right wing trope that Biden’s not fully in charge of his senses. He is old, he's very doddery, he often loses his thread (as do I, quite often, but I'm not running to be president), and he's a sort of Washington boy basically; a guy who's been in the capitol for decades who everybody likes, cause he's a nice guy and gets on with everyone, reaches across the aisle politically. But he's just a bit doddery and like a lot of doddery old men, his temper can go. We’ve seen this a couple of times; it happened yesterday with the question about his son. He can lose his temper quite a lot.
Freddy Colquhoun
You giving us a pen portrait of Biden, can you provide us with a bit of a portrait of Donald Trump the man, rather than Donald Trump, the president?
Freddy Gray
Well, I think Trump's great gift is his instinct. He has extraordinary instincts, and he has this great ability to say what everyone's thinking and he dares say it out loud. And for instance, yesterday, he was asked about Harry and Meghan who gave an awful, excruciatingly pious statement about the election, in which they didn't precisely say you'd have to vote for Joe Biden, but it's obvious that's what they were getting at. Trump was asked about this and he paused, he smiled and he said, “I'm not a fan of hers, all I can say is, good luck to Prince Harry, because he's going to need it.” I think is a sort of, you know, it's that the way in which Trump is a great media genius is that he just has that instinct for what a lot of people are thinking. In terms of ideology, yes I think he believes America first. He believes in America first to a certain extent, he believes in protecting American industry. I think that he actually feels that - it's not just posture. But at the same time, he's a pretty amoral guy who will just do whatever it takes to win.
Freddy Colquhoun
Freddy, thank you very much.
To watch the full video click here.
