Abacus | Why it’s too early to rule out Donald Trump
Despite widespread expectation of a landslide Clinton victory, the reality television star could still prove successful, and Asia is right to be worried
Consensus wisdom holds that it is all over bar the shouting. In little more than a week Americans will go to the polls to elect their next president and the vast majority of political pundits, statisticians and market traders believe the result is a foregone conclusion. Donald Trump has blown himself up and Hillary Clinton will romp home to an easy victory, with betting markets and statistical analysts alike currently putting the probability of a Clinton win at 80 to 85 per cent. In response, most US economists are heaving heartfelt sighs of relief that the chance of a Trump presidency and the economic damage they believe it would wreak has successfully been avoided.
The relief may be premature. Experience shows there is a chance that the consensus may be overly complacent and that the probability of a Trump victory may be greater than the conventional view suggests. The good news here is that a Trump presidency may not prove to be as economically destructive as most observers think – at least for the US. Across the Pacific however, a surprise victory for Trump would leave Asian countries facing a period of uncertainty, which would surely prove economically challenging.
There are several reasons to think the coming election may not be the walkover many professional observers believe. First, although prediction markets put the probability of a Clinton win at 80 per cent or more, recent opinion polls indicate a much smaller margin of victory. The clutch of polls published last Wednesday typically gave Clinton a more modest four percentage point lead, with at least one national poll signalling a slim lead for Trump and several others giving the reality television star the lead in key swing states, including Ohio and Florida.
Many in Asia have good reason to hope for a victory for Clinton as the status quo candidate, and that the prospect of a surprise Trump win outlined here proves nothing more than an unpleasant scare story.
On top of that, flawed assumptions about voter behaviour in polls that have no obvious recent precedent – either because they are one-off referendums or because one candidate comes from outside the political mainstream – mean polling companies could be underestimating the depth of anti-establishment feeling. The most obvious recent example was in June when pollsters utterly failed to foresee Britain’s Brexit vote.
