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Joe Biden’s Advantage

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Written by: Greg Valliere | Chief U.S. Policy Strategist, AGF Investments

THE 2020 RACE HEATS UP TODAY with the entry of Joe Biden, the front-runner to become the Democrats’ nominee. Every candidate running, including Biden, has flaws — but he has one significant advantage: strong support from organized labor, which will be clear in the coming weeks.

BIDEN WILL ANNOUNCE HIS CANDIDACY VIA VIDEO, with his first actual rally in Pittsburgh next Monday. It’s no coincidence that his campaign will begin in Pennsylvania, a battleground state (20 electoral votes) that Donald Trump won in 2016. Biden will tout his support from the United Steelworkers, the International Association of Firefighters and other unions. And his support among African-Americans is respectable (unlike Bernie Sanders) in pivotal states that have early primaries, such as South Carolina.

OBVIOUSLY TIMES HAVE CHANGED: Biden, 76, is from a different generation; he always considered his hands-on treatment of women to be harmless, but many of the recipients did not; at the least it seemed patronizing. Polls show his creepy shoulder massages have inflicted relatively little damage to Biden, who apparently gets a pass from most voters. And he should escape criticism from Trump on this score because Trump is hardly one to lecture.

WHAT HASN’T CHANGED is this era of 37-year-old candidates is the Electoral College map, which points to a very close outcome in a Biden-Trump race, with the former vice president having a plausible chance of winning the presidency if he takes Pennsylvania, Michigan and Wisconsin — three states that Trump carried. Another one, Ohio, could be out of reach for the Democrats, but it’s not mandatory in putting together 270 votes for Biden; the other three are.

FOR NOW, THE FOCUS FOR BIDEN is raising money and dominating the Democrats’ center lane, where he should eclipse the likes of Amy Klobuchar and John Hickenlooper, two moderates in a sea of progressives. Neither of them have a campaign infrastructure or the fundraising clout that Biden will bring to the race.

OUR BOTTOM LINE: With 21 announced candidates, no one will come close to winning 50% of the votes in most of the early 2020 primaries (with the possible exception of Kamala Harris in California, which could solidify her Top Three status). In the other states, Biden probably could win in a crowded field with only 30% of the vote — a low bar to clear for a candidate with the solid union and African-American support that Biden can count on.

FOR THE FINANCIAL MARKETS, a Biden presidency would be tolerable and largely predictable, but he would face a daily challenge in curbing his party’s noisy progressives, just as Nancy Pelosi has her hands full. The new generation doesn’t care about deficits, wants higher taxes and more regulations, and supports huge new spending on health care and tuition aid. The markets can live with Biden, but only if he can contain the restive left.

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