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US Elections: Debates matter but how much?

The second and final presidential debate was a far different affair than the prize fight in September. Relatively polite and respectful, well moderated by Kristen Welker, it provided voters with serious policy choices between President Trump and challenger Joe Biden on crime, immigration, the economy, the energy industry, and several other topics. Surprisingly heavy on political substance, there were zingers aplenty and quotes we will see repeatedly in campaign ads over the next twelve days. Can one debate change the trajectory of the election? Join FXStreet senior analysts Yohay Elam and Joseph Trevisani for the complete skinny.

Yohay Elam: President Donald Trump and Vice-President Joe Biden have had their last major event of the campaign – the debate. It has been regarded by all as a more civilized affair than the first clash. The incumbent has been trailing in pre-encounter polls. Have his reelection chances improved?

Joseph Trevisani: I would have to say yes...it was a superior performance by Trump. But how much is the question? We won't know until the election.

Yohay Elam:  I think the bar was extremely low for him. He set it low in the first debate.

Joseph Trevisani: Biden made a number of glaring errors, he looks weak and confused at times, particularly at the end.

Yohay Elam: I doubt it is enough, as also Biden improved his performance.

Joseph Trevisani: There was no game-changer, no knock-out. We will get post-debate polls early next week that could provide some answers.

Joseph Trevisani: At one point Trump said, referring to criminal justice reform, You had eight years, why didn't you get it done?  Biden's response was We had a Republican Congress.  Trump responded You convince them, Joe, that's what I did.

Yohay Elam: This comes at a time when Trump has no backing from his Republican Senators on the stimulus bill. He even acknowledged it speaking with reporters a few days ago. I think Biden's short answer, followed by a pause, conveyed confidence. In Obama's first two years, with full control, they got Obamacare, which has become popular and Trump is taking the unpopular position of wanting to abolish when millions are losing their healthcare and when there's a pandemic that is hitting new records in the US.

Joseph Trevisani: I agree there was no knockout...but there almost never is in these events.  Trump was very effective and clearly dominated the debate.  Biden's errors especially on the oil industry, fracking, Obamacare, and the  Hunters shenanigans in Ukraine, China, and elsewhere are certain to appear in Trump campaign ads in the next 12 days.

Yohay Elam: Trump doesn't have enough money for ads. It was easier to stick corruption to Hillary Clinton, but it doesn't work for Biden. I think the Hunter stories are good for the base, but going back to the base and failing to expand his support could prove a losing strategy for Trump.

Joseph Trevisani: I imagine the Biden campaign hopes, promising to end the oil industry and fracking will not play well in Pennslyvania and the mid-West. Surprisingly, in that I had low expectations, I thought it was excellent and useful exposure and beneficial for voters still undecided.

Yohay Elam: It was indeed far more informative.

Joseph Trevisani: Second terms are a judgment on the incumbent.

.Yohay Elam: Indeed

Joseph Trevisani: As the should be.

Yohay Elam: Trump is sui generis, as you said. He dominates the scene and raves on rage, as he said. I think that most people have an opinion on him, positive or negative.

Joseph Trevisani: Seriously.  I was impressed at his discipline, command of facts, and ability to dominate without being rude.  It was a masterful performance.  Will it suffice for reelection? To resort to cliche, we'll know in 12 days. We hope.

Yohay Elam: His claim about being the least racist person in the room and only possibly being second to Abraham Lincoln in helping African-Americans didn't sound convincing. I think he benefited from the muted microphone. Even if he won the debate – something which is not reflected in instant polls – I think there are few undecideds.

Joseph Trevisani: Perhaps, but the facts of record low employment for Blacks and Hispanics before COVID are true and the recitation of his administration's accomplishments in economic improvement and assistance was effective. Instant polls reflect the audience. But I agree.  It is hard to tell what impact the debate will have but in general, they do not win elections.

Yohay Elam: 50 million Americans have already voted 36.5% of the total 2016 turnout. 2020 turnout will likely be higher.

Joseph Trevisani: I expect it will.

Yohay Elam: Perhaps there are more undecideds among the late voters.

Joseph Trevisani: That would seem logical. The amount of early voting is at records.  I think we can assume most of those are the committed voters, the base.

Yohay Elam: Back in 2016, there were around 20% undecideds.

Joseph Trevisani: Pretty understandable considering the candidates in 2016.

Yohay Elam: Both were disliked, Trump offered something new. To drain the swamp. Now he's a politician, so his charge against Biden of being a politician didn't ring. Especially as Biden is running as a "return to normal" candidate. Choosing science over fiction.

Joseph Trevisani: There I disagree.   Biden is nothing if he is not a creature of Washington. He has never had a job except for politics, and he has been in DC 47 years.  Several of Trump's most effective moments played on that, as he repeatedly asked, Why he hadn't done any of the things he was promising already.

Yohay Elam: I agree that these were Trump's best moments, though Obamacare, which Biden was part of, is an achievement more Americans support.

Joseph Trevisani: It will take a few days for the polling, for what it's worth, to catch up.  I imagine Trump will get a boost.

Yohay Elam: And the election is about Trump's presidency more than Biden's record.

Joseph Trevisani: True.

Yohay Elam: We'll see about the bump. The main events are over. Back in 2016, the Comey letter shook up the race. Any October surprise that you can foresee this time?

Joseph Trevisani: We will see if the MSM can maintain their embargo, essentially censorship, of the payola scandal. The WSJ  ran a column about to say as I think Dow Jones Newswires.

Yohay Elam: I don't think those baseless allegations will stick. Maybe to Clinton, where the Republican hate machine worked for 20 years, but not on Biden, who seems like Teflon. As he said, it's about character, and people believe him. His favorability ratings were unharmed by the story.

Joseph Trevisani: But also many voters may, even if they hear about it, may just consider it as normal campaign rhetoric.

Yohay Elam: There is longing for normality. Trump managed to make people forget about one scandal with another. The nails turned into a walkable nail bed. Until they didn't. His actions accumulated and reached a critical mass that is now untolerated by many. I think the 2018 elections show the enthusiasm to oust him.

Joseph Trevisani: Obama and the Democrats lost heavily in 2010, but he was reelected.

Yohay Elam: That's a good point. And polls underestimated Obama in 2012, so maybe polls are underestimating Dems this time.

Joseph Trevisani: Sometimes I like to quote William Goldman the screenwriter... Nobody knows anything" thought he was referring to the movie industry.

Yohay Elam: We'll know something on election night, as counting in Florida is already underway.

Joseph Trevisani: And Trump in 2016...

Yohay Elam: And then we'll have a "5K race after a marathon" with long days until the final tally arrives. In 2016 the result came out on election night, this time it will take longer. Plenty of coffee stacked.

Joseph Trevisani: Perhaps. No perhaps on the coffee though.

Yohay Elam: When will we have enough post-debate polls, Monday, Tuesday?

Joseph Trevisani: I would think so.  There is nothing out so far but instant polls that are eyecatching but worthless.

Yohay Elam: What matters is voting intentions, not opinions about the debate, except our opinions of course.

Joseph Trevisani: The debate was surprisingly substantive. At the end that may have more impact than we think.

Yohay Elam: Low expectations, strong surprise.

Joseph Trevisani: There were clear choices in policies and ideas about the US, its culture, and the economy. People take voting seriously.

Yohay Elam: Yep, they do, but US political campaigns are extremely long.

Joseph Trevisani: Truly.

Yohay Elam: Some presidential candidates announce their decision to run some 20 months before the general elections. And the incumbent is in power for nearly four years. I understand most people are not news addicts, but those that choose a healthy life and are disconnected most of the time are few and far between.

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FXStreet Team

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

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