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My view on what's going on in the financial markets and the global economy, and a few other things that might interest me from time to time.

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Conservatives Smash Election: US Democrats Need to Learn from this to Stand a Chance in November

Updated: Jul 19, 2020

Early exit polls indicate that the Conservatives not only won the most seats in Thursday’s U.K. election, as expected, but won enough seats to claim an outright majority in the House of Commons.  What Boris Johnson will do with overwhelming majority remains to be seen, because there have been lots of promises made and – well, let’s be honest here – his past has not necessarily shown that he always delivers on them. Still, it seems clear that the “get BREXIT done” message resonated with the electorate, as the Brits have endured over three years of a locked-up government, unable to either deliver BREXIT or a second referendum. In this respect, the election results speak for themselves. However, this election was also about the lack of appeal of Labour’s proposed far-left socialist policies that formed the basis of its economic platform, which were essentially “tax-and-spend”. Sure, there are plenty of issues with the UK economy at the moment, but this election shows that Labour’s plans of ramping up government spending which would be funded through higher consumer and business taxes and more government debt was not generally appealing. And herein is the message to the Democrats in the U.S., as there is a presidential election fast approaching (November 2020).

President Trump is undeniably divisive and has shown many vulnerabilities. And in spite of a strong US economy, I believe that #POTUS can be beaten by the “right” Democratic candidate. But even though there are similar issues in the States as in the U.K regarding everything from cost of university / student debt, health insurance (or lack thereof at the federal level) and wealth inequality, a Democratic candidate that drifts too far left will not likely beat the incumbent. For the Democrats to stand a chance, they absolutely must pick a candidate that is likeable, centrist and electable. If they cannot demonstrate that they learned something from the 2016 election (“theirs to lose”), and if they choose to ignore the results of the U.K election, then the party is clearly blind and destined to fail again in 2020. Given where the party is heading, I have some doubts that the Democrats will steer its candidates towards a responsible social and economic platform, as the far left strains of the party are very influential. These sorts of discussions are the party’s prerogative, and in fact, tabling a broad range of opinions on social and economic matters and debating these during the primary phase is what makes the US democracy a true democracy. But if I were in a leadership position in the Democratic party, I would look across the pond at what just happened to the Labour Party and – as gently as possible - reign in any sorts of “tax & spend” agendas. These socialist policies might rally the far left of the party at campaign events, but I doubt seriously if they appeal broadly to the general electorate. If this is the path chosen by the Democrats when they select their candidate, I think it is almost a certainty that the Democrats will fail (again) in 2020, in spite of the fact that the door appears wide open at the moment.

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