ElectionWatch

General election campaigns in the United States tend to become highly choreographed
affairs – after the chaotic skirmishes that characterize the party primaries.
This year has been anything but normal. Just in the past week, we have seen how
current events can impact candidates’ carefully laid plans. Ongoing racial tension in the United States again flared violently after the release of two mobile phone videos showing the shooting of African American men by police officers in Minnesota and Louisiana.

The candidates are now preparing for their national conventions later this month (where more protests are expected to receive constant media coverage). In this month’s edition of ElectionWatch, we focus on the changes that have accompanied political conventions since 1968, when the selection of presidential candidates was still the exclusive province of party leaders.
Now, primary contests dictate the outcome long before the delegates gather, transforming national conventions into political theater. As such, the nominees’ selection of a running mate is one of the few mysteries left for the delegates to ponder. And yet, academic studies regarding the impact of a running mate on the outcome of an election
are inconclusive. The individuals nominated for vice-president may improve the results in
states where they reside but the effect is more pronounced in smaller states with
fewer electoral votes. The choice of a running mate is arguably more significant in
what it says about the presidential candidate’s own judgment and the signal he or she wants to send to voters. The selection of a political veteran may calm party insiders anxious about a candidate’s undisciplined rhetoric, while the selection of a more liberal running mate might signal the need for more support from an important voting block.

Our feature article this month is focused on the macroeconomic impact of each candidate’s policy platform. A system of checks and balances constrains the ability of any
president to unilaterally implement sweeping economic policies without the consent
of Congress. So, while both Clinton and Trump have advocated substantial changes
to tax policy, their ability to implement such changes will likely be constrained by the
need for substantive negotiations with a divided Congress.

Chief Investment Office Wealth Management, Ubs

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