Political Surprise of the Year: Return of the Moderates
December 4, 2020
HERE’S A POSITIVE STORY: As progressives try to pull Joe Biden to the left, and Donald Trump’s partisans claim a stolen election, there’s been a political surprise: the center is making a comeback.
WHEN WE MEET WITH CLIENTS, a common refrain is that the country’s left and right extremes have produced a vacuum in the center. Many investors ask — why can’t there be compromise and bipartisanship? Well, we’re seeing signs that the center is still alive.
SUPPORT FOR A COVID RELIEF BILL has highlighted this new trend. A bipartisan group of Senators has emerged, led by the powerful GOP moderate from Maine, Susan Collins. She has been joined by several Democrats, led by Joe Manchin of West Virginia. Others are on board — Democrats Mark Warner, Jeanne Shaheen, Maggie Hassan, independent Angus King, and Republicans like Joni Ernst and Bill Cassidy.
IN THE HOUSE, A CENTRIST GROUP called the “Problem Solvers” now has 50 members, equally divided by Democrats and Republicans. They played a major role in keeping stimulus talks alive, opposing Speaker Nancy Pelosi’s refusal to accept a generous deal this fall.
THERE ARE PLENTY OF POLARIZING POLITICIANS, to be sure, led by Trump, who will be tweeting for years to come. But we think Biden will resist a pull to the left from progressives like Alexandria Ocasio-Cortez; he won’t pack the Supreme Court or make Puerto Rico a state.
A SHOT AT THE LEFT came this week from Barack Obama, who said in public what many Democrats have been saying privately — the “defund the police” mantra hurt the party in several House races. The country may want to reform the police, but defunding the police is widely rejected.
ON THE RIGHT, we think the dam will burst soon, with increasing numbers of Republicans calling on Trump to end his destructive crusade to reverse the election. There are several Republicans to watch in addition to Collins, Ernst and Cassidiy. Sens. Mitt Romney and Lisa Murkowski have long sought centrist compromises.
THE KEY RELATIONSHIP: Whether a mood of “let’s get things done” will prevail depends largely on the dynamic between Biden and Mitch McConnell. The latter has been slow to acknowledge Biden’s victory, but the wily Senate Majority Leader now has some wiggle room to negotiate.
IF A PANDEMIC STIMULUS BILL PASSES, which is increasingly likely, optimism over bipartisanship will grow as 2021 begins. It could become a trend; maybe the center hasn’t collapsed after all.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.