Goldman Sachs: Expect a Second Term for Trump

Goldman Sachs must be one of the most heavily Democratic business organizations in the U.S., and it’s a good thing: given the company’s pervasive influence on American business, if its partners were Republicans they would be more vilified than the Koch brothers. So it is a day-brightener to see that Goldman predicts a Trump re-election in 2020: narrowly, but still.

President Donald Trump holds a “narrow” electoral advantage heading into 2020, according to Goldman Sachs, with his chances buoyed by a resilient U.S. economy and a crowded Democratic field in which a clear frontrunner has yet to emerge.

In a comprehensive report released late Saturday, the investment bank gave its preliminary thoughts on a general election that’s still more than a year away.

While Trump reelection is far from assured, Goldman’s economists believe the president is bolstered by “the advantage of first-term incumbency and the relatively strong economic performance,” in what is sure to be a “close call” election.

I think that is a sound assessment. Of course, Yahoo Finance must get its anti-Trump licks in:

Trump’s approval ratings remain mired below 50%, as new crises appear to engulf his administration on a near daily basis. Meanwhile, early reads on the November 2020 ballot suggest the incumbent faces an uphill climb in his reelection bid.

The only daily tracking presidential approval poll has Trump “mired” between 48% and 53% approval among likely voters, better than Barack Obama at the same point in his first term. And at the moment, I would say that crises are “engulfing” the Democratic opposition on a daily basis, not the Trump administration.

Yet with more than 20 Democrats vying to replace him, voter turnout uncertain and the likely emergence of an independent candidate suggest that “President Trump is more likely to win a second term than the eventual Democratic candidate is to defeat him,” Goldman wrote.

The Goldman report mentions the “prediction markets,” in which people place bets on everything under the Sun:

“While we believe the majority of market participants expect President Trump to win a second term, we note that prediction markets point in the opposite direction and imply that the Democratic candidate has a 56% probability of winning and the Republican candidate has a 44% chance,” the bank said.

Political betting markets have shown mixed results, with a few recently showing a clear reelection advantage for Trump, while others predict a Democratic win.

In my opinion, the “prediction markets” are a poor indicator. Did they forecast a Trump victory 19 months before the 2016 election? Um, no. On the contrary.

I don’t suppose Goldman Sachs has much more insight into what will happen over the next year than the rest of us, but their business model requires that they deal in reality, not the bizarre fantasies that animate America’s left. So it is nice to see that they recognize the likelihood that President Trump’s performance in office will merit a second term from the voters.