¶ Impact of Third Party Candidates
Welcome everybody to Skeptics Guide to Investing with Steve Davenport and Clem Miller .
Today we're going to talk about probably the first of many episodes we'll be doing about the 2024 elections and so , jumping right in , it looks like , just as of yesterday , both major candidates President Biden and former President Trump have clinched their respective nominations in terms of vote totals and , of course , they've been starting to lay out the details of
their policy programs . And you know there's obviously a lot of issues that are out there , both personal issues about the candidates as well as policy issues . So , if you think about the personal issues , obviously one issue that's out there is the age , the advanced age , of really both candidates .
You have the various lawsuits and legal actions involving former President Trump . You've got the economy , which is improving , but inflation still remains somewhat high and there's this sort of lagged impression that some of the higher levels of inflation are sort of persistent and , of course , some interest rates are still high as well .
Now , on the flip side of that , you've got an improving stock market , which helps some segments of the voter population . Another issue that's out there , obviously , is what's going on . Foreign policy issue is what's going on with Israel and Gaza , and you could add to that the various perceptions around the Ukraine and Russia .
So I would say those are some of the major issues that the candidates have to face , and a real question for you , Steve , is which do you think among those issues , or any others , are the most important and will help decide the winner of the election in November ?
I would say NONE of it , Clem . I would say the biggest thing that I would say is what's happening with this third party candidate , Robert Kennedy .
I think that his possibly choosing Jesse Ventura , the governor of Minneapolis , the former wrestler , or Aaron Rodgers , the quarterback for the Jets , is probably what people should be focused on , because , when we look at history , history tells us that these third party candidates don't really have a chance to win , but they do have a big chance to influence the
election . When we look at Ross Perot , who was able to get on the ballot in all 50 states , his non descript election involvement really hurt Bush and allowed Clinton to win with 42% of the vote .
And so , when you think about these elections , Ralph Nader was usually the candidate for the Green Party and he would influence elections and votes away from , democratic candidates who would be not far enough left for him .
There were people who would show up , who could have influenced the election by picking one or the other , a third party candidate in an election that was as close as some of the last elections have been A hundred thousand in this state , fifty thousand in that state .
Those votes going to somebody who is really a protest candidate or somebody who doesn't really fit the mainstream , allow people who don't feel comfortable with either party to have an outlet , and I think it's one of those things that while everybody's looking at the economy , everybody's looking at the Fed , everybody's looking at the things that you've mentioned in your
introduction , and what I'm trying to say is maybe it's not what is in our headlights , that's the real problem . It's around the corner . There's going to be a deer that jumps out on the road , causes the accident , and you don't know . When you go through this process , and what I'm trying to do is determine is it real ?
Is his candidacy going to be dropped in three or four or five , six months ? Is he being put there and supported there by people from one side , on the left or the right ?
I can't at this point determine who he really hurts , although I kind of get the feeling that , since the Kennedy name is very much associated with the Democrats , that he's going to pull votes from Biden , and so that , to me , makes him much more impactful , because I feel that that's something that Biden's situation right now , with the questions about his age and
questions about his document handling this may matter . I don't like what's happening , but I also think there are many people out there who are unhappy with the two choices .
Yeah , you know , I agree with you on that , Steve . The only thing I would say is I think he's going to pull some votes away from Trump as well .
And the reason I say that is because you know Trump has been making a big deal out of the fact that you know well the fact , the supposition that he solved the whole pandemic issue through the warp speed efforts to bring about the vaccines .
He makes a big deal out of it and whenever he talks about that , his supporters come down hard and say how can you say that ? How can you say that the vaccines were worse than the , than COVID itself , and so on and so forth . So there's a huge number of his supporters who actually oppose any notion that the vaccines were helpful .
And those folks would be naturally attracted to Robert Kennedy Jr , especially if he were to keep talking about vaccines . I know he's trying to play it down a little bit , but if he goes back to talking about it , I do think there will be some percentage of the MAGA supporters who will go in the direction of Robert Kennedy .
That's not to take away from your point , but you know about , you know Democrats wanting to look for somebody . You know new , but you know , outside their party . But I think it's not as clear as what Perot did .
I think the other thing that I come back to with what happened when Trump got elected is that Bernie Sanders had run a big campaign . He had really done a good job , and when you look at those Bernie Sanders votes , we're talking about the people who vote and winning the majority of those votes , but what about the people who stay home ?
My question is is does do people stay home from one side or the other and not like any of the candidates , and then leave it up to those ardent supporters ? So I think that the biggest risk for Kennedy is getting on all the ballots .
¶ Potential Impact of Third-Party Candidates
I was reading and there's some information about how hard it is in places like Texas and California .
In Texas , you need to over 200,000 signatures from people who didn't vote in either primary , which is a very complex way to say hey , this person is an independent candidate and the people who didn't approach either or approve of either of the candidates have chosen him . And then in California , you need over 300,000 . And it's .
There's some very strict rules about whether the document has been notarized properly , whether the document is consistent , whether the document and the voters have , you know , identified their address and their voting address versus another address , and there's just a lot of legal and other hurdles before Kennedy can really get where he needs to to have an impact in this
. So I'm calling this out as an early you know flash . There's something on the horizon that you should look at . Is it going to get bigger ? Is it going to get smaller ? Are there people on either side that are going to make it clear that he's not the right person ? Sure , I think that not being a part of the debates will be the next hurdle .
If he gets the signatures and he can't be at the debate stage , does that , you know , make him irrelevant ? My point is in any election where it could be decided by 10,000 , 20,000 or 50,000 votes in a given state , those 50,000 votes could be , you know , the protest of picking Robert Kennedy .
So you mentioned Jesse Ventura , Aaron Rodgers as potential VP candidates . I mean , historically , vp candidates really haven't mattered too much . They might matter because of the age of Biden and Trump , but , you know , will it really matter in the case of Robert Kennedy ?
I think it's one of the strangest choices . If I were looking at this from his perspective , I would think I want to pick somebody who has political experience and somebody who has , you know , an ability to show dependability and stability for a ticket that's from the third party . But then I look at it and say what age are we in ?
We're in the age of short videos and personalities , and in that case I'd say that we are . We really have to think about wow , personality matters , right ? We all made fun of Ronald Reagan as being the actor and then by the time people had finished making fun of him , he had already won .
So I think that picking some personalities is a unique way to go about this . Not necessarily what I would say is normal , but do we think this is normal times or do we think this is kind of extraordinary times ? I would say that being good on TV , being good in front of a camera , being able to raise people's excitement level , is , I'm not sure .
This is the not the Mike Pence vice president choice , and I think there's a reason why people are doing it and because they want that personality . And I think that we can disagree about the personalities and we can say we don't agree , but we're not probably the people who they're trying to attract .
Who they're trying to attract are the people who are on the fringes or uncertain . Probably might not vote anyway . But if they wanna send a message to the two major parties , they'll be able to send a message .
Steve . So two questions why is Kennedy doing this , and would Kennedy have a shot at all if his name weren't Kennedy ?
I think that the one of the things that I find interesting is that the democracy in America is a two-party system . Everywhere else in the world where there are democracies , it's a multi-party system . There's a labor party , there's a far left party , there's a conservative party .
The democratic side gets divided into two or three different groups , even a pro-communism party in some countries . So there's all of these different choices and they're much more driven by consensus management than they are party management . And here in the United States , it's felt to me that there is this third rail or this third voice that's just not being heard .
So I really don't think Kennedy has any chance of winning . The system is built against third parties , but what it does to me is it raises the question why don't we have someone or somewhere you can feel heard ? I really thought Bloomberg was gonna get into the race the last time , the last two times , and he has the money , he has the resources .
And I look at Kennedy and say he's raised $50 million . It'll take $15 million to get on all the ballots . Maybe it inspires someone in the future . I don't feel like he's really gonna make a difference in terms of winning this election , but the question is , does it lead us to a difference in terms of how we look at going forward .
Yeah , honestly , I would disagree with this notion that we really only have two parties in the US . I think we have multiple parties , but they come under umbrellas of the Democratic and Republican parties . We've got the MAGA Republican party , the right wing of the Republicans , which obviously is gradually taking over that party .
Yeah , I think there's a religious right that I'm not sure where they fit .
Yeah , the religious right fits in there . Those who are more economic , I mean economic populace , you know , exist in both parties right , I think there's libertarian .
I mean , I've always thought that it's the messy middle . Yeah , and the messy middle really doesn't fit into the category of I'm socially liberal but I'm fiscally conservative , and you know one . You mentioned those .
You mentioned those countries that have multiple parties . I think one difference between the US and some of the European parliamentary democracies is the fact that you know , really we're more top-down , so we elect a president and you know the president , if he's a very popular president , gets a large amount of vote .
Usually Congress There'll be on the the Congress front , there will be more of his party elected . So the president pulls the party . In the parliamentary democracies you have the parties elected and then they choose their prime minister . So it's a different , different format .
I mean , the only country in Europe that resembles the US to some degree and which kind of goes to your , to your third party point is , is France , and in France you had a circumstance where Macron came out of the blue with his own party , which really was just his own personality actually , and he built a party around that once he became president .
So you know that . You know that creates something of a Of an analog for a third party Run in the US , I think personality .
Politics has been a part of this , and that's I . I really don't know if Kennedy has the personality to really Inspire people . I think it's . You know , obviously , his father and his grandfather , you know His family has inspired people in the past . But I guess I just wonder , you know , when are we going to evolve our system ? I agree it's a top-down system .
I think we both agree that it has problems and implementation , and I'm not saying that having more parties would necessarily , you know , I look at Italy and some of the you know the , the governments there that are put together with and the Greece .
I think there are , there are strengths and weaknesses of both , and my reason for mainly bringing this up is that I just believe we are a very disjointed right now and it's in it's in chaos that things change .
And I think that if we have a chaotic collection , people might Feel like , well , we've got to do something about , you know , registering these third parties or setting them up , and and it could just leave people or inspire people to do something different .
And that's , you know , my Whether it's idealistic or not , my belief is that something could change because of this and I I think that it's , it's worth talking about , thinking about , because , as Politics will lead to more chaos or uncertainty .
It leads to chaos or uncertainty in our markets because people don't know you know when one or the other is is going to be benefited .
So yeah , certainly a . You know , a two-party System is a more stable configuration than a three-party system or a four-party system .
Correct ? I think it is , but it also just ignores those people in the middle , doesn't it ?
Yeah , it does , because they tend to pull to different poles and to different personalities Than what you're used to . So I mean a third party candidate , or let's just say a third candidate , if they've got a strong personality , you know , certainly could pull some votes and I think you know Perot , I think , was one of those candidates .
I don't think , honestly , I don't think Robert Kennedy is . If it weren't for the name , I think it wouldn't matter at all in my mind . If it weren't for the name and if it weren't for the , the anti-vaccine positions which I think pull more from Trump than from Biden , I think he wouldn't . You know , wouldn't matter , right , whether he's in there or not .
But it depends on the state , it depends on the electoral college . Remember some of those votes that are going to go to the electoral college ? What , states are proportional ? Right , I think that's a good point , right if he wins .
f he makes a difference in a few districts and that state is not a winner , take all state , then those votes that go towards one candidate and the other , or even a winner , take all state In a winner , take all state .
If he provides 100,000 votes that don't go to the person who you think should win , and he takes 80 from Trump and 20 from Biden , maybe that's the difference . And so I'm just saying that our system is very complicated and adding a third party makes it more complicated , and so , therefore , I don't think complexity necessarily leads to more stability .
Right , that's my point . It's really not about the candidate claim , as much as it is a process in the election and how that might lead to people's portfolios having a little more uncertainty .
Right , I think you and I can both agree on the fact that it's still really early to be able to make some predictions .
Sure , I'm not predicting he's going to be successful . I'm just saying something on my radar that says no , it's too early to predict any future outcomes .
I know that there's a lot of polling out there and a lot of the polling right now says Trump . There's been some other polling that says Biden . It's really all over the place this polling , and it's just too early . It really is too early to and really the polling .
Let's be honest , the polling is also not really indicative because the electoral college works the way the electoral college works . Yeah , so I have yet to see a pollster say here's the summation of every state and applied the electoral college rules to those states' delegates . Yeah , here's the total of delegates for each candidate .
That's really what we need to do , right , Clem ? Yeah , exactly , and you're right , I haven't seen . If you're 43% , 41% , you want to determine the winner right .
Yeah , I've seen some individual state polls , but I haven't seen what you're talking about , which is an aggregation and applying the framework of the electoral college .
Correct , and that's why I think that polls are nice , but they're not what you're going to wake up with on the day after the election . You're going to wake up with do you want this state and that state ? And this poll was wrong in this state and this state and that led to . I mean , biden was going to win Florida and all of a sudden he didn't Right .
So the polls said Hillary Clinton . I remember I was actually in London on the day of Brexit referendum and I remember waking up the next morning and thinking , holy cow , how did this actually happen ? Because the polls indicated that Brexit would be defeated by 2% and it wasn't . And the polls , even the day before the polls , were just wrong .
Right , I think it's a sample . I mean , you know , from data statistics . I mean a sample analysis . It's going to have a plus or minus
¶ Potential Impact of 2024 Election
. So all we're seeing is people think about how these other issues are out there and , we'll have other chances to talk about the politics and the polls as we go forward .
But I guess I'd just say it's an interesting time we live in and you might say you like the idea of a Kennedy or you don't like the idea , or you're just so sick of the two parties you're going to sit home . But this just gives another you know bit of of intrigue to what 2024 is going to be , which is a very interesting year .
So thanks for watching , thanks for listening and I appreciate all the support on the podcast .
Thanks very much , Steve .