Who Won the Presidential Debates and What’s the Likely Impact on the Economy

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The 2016 Presidential Debates are now over and only a few days remain before what will perhaps be the most important U.S. Presidential election since 1980…when Ronald Reagan became the United States’ 40th President.Ronald Reagan

During each of the debates, Trump tried to focus on discussing important issues facing the United States and its citizens, while Clinton spent much of her time attacking Trump on personal matters.

The First Debate

With journalists who support Clinton moderating the first two debates, Trump faced an uphill battle, as Clinton focused on attacking him personally instead of giving any specific proposals on how to improve the economy, prevent illegal immigration and confront terrorism.

For example, NBC’s Lester Hold began the first “debate” by saying, “There’s been a record six straight years of job growth, and new census numbers show incomes have increased at a record rate after years of stagnation.”

Although Holt acknowledged that “income inequality remains significant, and nearly half of Americans are living paycheck to paycheck”, he failed to mention the fact that the U.S. economy is experiencing its worst recovery since the 1930s, or that the economy is showing signs of weakening. He also failed to mention that much of the job growth that occurred over the past several years, was due primarily to increases in low-paying retail trade and hospitality jobs.

In other words, Holt supported Clinton by suggesting that the economy has performed well under President Obama.

89898And, during the “debate” Holt interrupted Trump approximately 41 times, while he interrupted Clinton only seven times.

Throughout the so-called first “debate”, Clinton followed her, “I’m here to help” modus operandi.. by making big, but vague, promises and suggesting that she wants to help any Americans (and illegal immigrants) who needs help. For example, Clinton said she wants “to make the economy fairer”. And, according to Clinton, “That starts with raising the national minimum wage and also guarantees, finally, equal pay for women’s work.” She also promised to make college debt-free for the middle-class. Clinton said that she’ll be able to accomplish all of those supposed goals by “having the wealthy pay their fair share”.

In contrast, Trump gave specific proposals on how to stimulate the economy, such as cutting business tax rates from 35% to 15%, repatriating $2.5 trillion held by U.S. companies in foreign bank accounts, reducing government regulation of business and enforcing foreign trade agreements.

In regard to her personal attacks, Clinton accused Trump of being a racist, claiming that “he has a long record of engaging in racist behavior”. She also claimed that “Donald’s very praiseworthy of Vladimir Putin” and claimed that “he has said repeatedly that he didn’t care if other nations got nuclear weapons, Japan, South Korea, even Saudi Arabia.”

Clinton ended the “debate” by claiming that Trump called a former beauty pageant winner “Miss Piggy” and “Miss Housekeeping”, even though she provided no proof of Trump making those statements.

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The Second Debate

Debate number two began where the first debate ended, with one of the moderators, Anderson Cooper, who’s clearly a Clinton supporter, asking Trump (via a pre-selected question gathered from the audience) about a personal matter, instead of focusing on important factors and developments facing the country.

Specifically, Cooper asked Trump to elaborate on some comments that he made in a private conversation 11 years ago, whereby Trump bragged about kissing women and grabbing their genitals without their consent.897964

Clinton was quick to follow the moderators’ line of attack by claiming that Trump “has also targeted immigrants, African- Americans, Latinos, people with disabilities, POWs, Muslims, and so many others”. However, Clinton failed to support her claims with any specific examples or facts.

While the moderators later asked Clinton about her negligent handling of classified government emails, they spent less than 15% of their time on that issue than they did on questioning Trump about his inappropriate comments regarding women. And, as is usually the case with Clinton, she lied about her email server being hacked.

Although the moderators had planned to “move on” to another subject instead of asking Clinton to elaborate on her improper handling of government-related emails, Trump pointed out that Clinton deleted 33,000 emails from her unapproved personal server after receiving a subpoena from the U.S. Congress to submit those emails to the Congress.

Then, the moderators began to ask both candidates some substantive questions, starting with a question presented by one of the debate attendees regarding the so-called, ‘Affordable Care Act’.

While Clinton defended the Act, saying that she wants “to fix it”, Trump said that he wants “to repeal it and replace it with something absolutely much less expensive and something that works.”

Specifically, Trump said, “We have to get rid of the lines around the state, artificial lines, where we stop insurance companies from coming in and competing.”

afghanistan-2014-600Next, the moderators presented a question regarding Muslims being labeled supposedly as a threat to the United States.

While Trump acknowledged that the attendee who asked the question was “right about Islamophobia”, he said, “we have to be sure that Muslims come in and report when they see something going on. When they see hatred going on, they have to report it.”

He went on to suggest that Muslims from foreign countries should be allowed to enter the United States, but ONLYafter the implementation of extreme vetting measures.

In contrast, Clinton gave no suggestions on how to stop Islamic terrorists from entering the country.

When Clinton was then asked to elaborate on a comment that she made in one of her paid speeches, whereby she said there’s a need to have “both a public and private position on certain issues”, Clinton responded by claiming, “that was something I said about Abraham Lincoln after having seen the wonderful Steven Spielberg movie called “Lincoln.”

It was a master class watching President Lincoln get the Congress to approve the 13th Amendment. It was principled, and it was strategic.” In other words, Clinton tried to suggest that the two-faced comment that she made during the paid speech had nothing to do with trying to mislead the public.

And, instead of addressing the question mentioned above, Clinton employed a divertive technique by suggesting that Trump is working with Russian President Vladimir Putin to unfairly to influence the U.S. election.

When the next question turned to taxes, Trump mentioned specific proposals, such as lowering the business tax rate from 35% to 15% and getting rid of the carried-interest tax provision for businesses structured as limited partnerships – requiring the general partners of a limited partnership to be taxed at ordinary income-tax rates instead of lower capital gains rates.

In contrast, Clinton said that she wants to raise taxes on persons who make more than $250,000 a year.

Although Clinton claimed that she wants “to make sure that nobody, no corporation, and no individual can get away without paying his fair share to support our country”, she failed to comment on Trump’s carried-interest proposal. That came as no surprise considering the fact that numerous hedge fund managers and Wall Street investment banking executives have donated heavily to Clinton’s campaign.taxes

Anderson Cooper then pressured Trump about his supposedly un-American decision to take a legal tax deduction, as if his great-great-great-grandfather, Cornelius Vanderbilt, who was the third-richest American in history, would never have taken such a deduction.

Trump and Clinton then discussed their positions on ISIS and the Syrian civil war.

Clinton suggested that she would prefer for the U.S. to get more involved in the Syrian conflict, while Trump indicated that he wants the U.S. to become less involved in Syrian affairs.

The next question was about the types of persons that each candidate would likely appoint to the Supreme Court.

Trump said that he would “appoint judges very much in the mold of Justice Scalia”. In contrast, Clinton said that she would “appoint Supreme Court justices who understand the way the world really works,” as if Justice Scalia didn’t have a clear understanding of such matters.

The final substantive question during the second debate was about the candidates’ energy proposals.

stock_33While both candidates said that they want the United States to develop alternative forms of energy, Trump suggested that he also wants the country to continue to develop fossil-fuel forms of energy.

Specifically, Clinton said that she supports “moving toward more clean, renewable energy as quickly as we can”.

In contrast, Trump said that he is “all for alternative forms of energy, including wind, solar, et cetera. But we need much more than wind and solar.” He went on to suggest that more investments should be made in providing clean coal and more natural gas.

Although all of the major polls indicated that Clinton won the first debate, most polls showed that Americans, in the aggregate, thought that Trump won the second debate. That’s in spite of the fact that Anderson Cooper and Martha Raddatz interrupted Trump approximately 37 times when they weren’t satisfied with his answers. In direct contrast, they interrupted Clinton only nine times.

The Third Debate

The third debate, which was moderated by Fox News’ Chris Wallace, was by far the most substantive debate, with Wallace asking important questions concerning each of the candidates’ positions on the Supreme Court, illegal immigration and the economy.

In regard to the Supreme Court, Trump indicated that he thinks the Court should abide by the actual words in the U.S. Constitution, while Clinton suggested that the Constitution is a living document to be applied flexibly according to changing circumstances.

87951Trump also said that he supports the Second Amendment – Americans’ rights to keep and bear arms –, while Clinton suggested that she’s against a strict interpretation of that Amendment.

On the issue of Abortion, Trump said that he would appoint anti-abortion / pro-life justices. In contrast, Clinton indicated that she would appoint pro-abortion / freedom-of-choice justices.

In regard to their positions on illegal immigration, Trump said that he wants to build a wall on the United States’ southern border to help to stop the flow of illegal immigrants entering the country, and that he would begin to deport alien drug lords immediately. In direct contrast, Clinton indicated that she is in favor of amnesty and that she would support a path to citizenship for illegal aliens.

Wallace then asked Clinton to comment on a statement that she made in one of her paid speeches regarding her desire to have “a hemispheric common market with open trade and open borders.”

Clinton responded by claiming that she was “talking about energy”. Then, she tried to avoid the issue by changing the subject and suggesting that Trump has been colluding with Russian President Putin to hack into her emails in an effort to help to get Trump elected.

Next, she claimed, falsely, that Trump has advocated for more countries to gain access to nuclear weapons, including Japan, Korea and Saudi Arabia. And, she lied  about Trump wanting supposedly to end the United States’ foreign military alliances.

When Wallace’s questions turned to the economy, Clinton responded in her usual way by making big, but vague, promises without mentioning any specific proposals. However, she indicated that she wants to raise taxes on high-income persons and corporations, saying, “we are going to have the wealthy pay their fair share. We’re going to have corporations make a contribution greater than they are now to our country.”

In contrast, Trump said that he wants to renegotiate trade deals, including the North Atlantic Free Trade Agreement (“NAFTA”), and to have a lot of free trade. In addition, he proposed making large reductions to U.S. tax rates and said that he wants to repatriate approximately $2.5 trillion that U.S. companies hold currently in foreign banks.

Although Clinton claimed that she doesn’t want to raise taxes on anyone making less than $250,000 per year, she admitted that her desire to keep the Social Security Trust Fund solvent would require an increase in payroll taxes – would require the raising of taxes on persons who make less than $250,000 per year.

The Likely Impact of the Debates on the Upcoming Elections, the Economy and Future Direction of Stocks

Although there’s been a lot of talk about who supposedly won each of the three debates, my research and experience indicates that only two issues really matter regarding the debates and the upcoming elections:

  • The number of non-partisan, independent voters who have been persuaded to vote for either Trump or Clinton as a result of watching and listening to the debates, and, more importantly,
  • Which of the two candidates will likely receive more electoral-college votes in the following states: Florida, Michigan, North Carolina, Ohio and Pennsylvania.

While the latest polls indicate that Trump will receive the most electoral college votes in Ohio, those same polls suggest that Clinton has a good chance of receiving more electoral-college votes in Florida, Michigan, North Carolina and Pennsylvania. In the event that were to occur, Clinton would easily be elected as the next U.S. President, winning by a landslide.

strong_dollar_weak_economyHowever, polls conducted on October 20 by Investor’s Business Daily and Rasmussen indicate, that Trump would receive more electoral college votes than Clinton, on a national basis.

And, the fact that a large number of registered, non-partisan voters have not been polled makes predicting the eventual winner more difficult.

So, Trump appears to still have a chance of becoming the next U.S. President.

In regard to the impact that the next President will likely have on the U.S. economy, my research suggests that the economy would continue to grow at a slow pace, at best, if Clinton were elected, but to grow at a fast pace over the next several years in the event that Trump were elected.

And, that same research indicates that stocks would continue to trade in a narrow sideways pattern, with a downward bias, if Clinton is elected, but to initially pull back sharply for a couple of months, but to then trend substantially higher than their current levels if Trump is elected.

If you’d like to learn more about my analysis of the upcoming election and the likely impact that the next U.S. President will likely have on the economy and stocks, you can watch my FREE Webinar, called “How to Make Your Portfolio Great Again” by clicking here.

David Frazier is President and Chief Market Strategist of Frazier & Mayer Research, LLC, an independent investment research firm that offers customized research and analytical services to registered investment advisors, hedge funds and high net-worth individual investors. You can check out his latest insights at: www.investorsmonitor.com.

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