There Was The 1972 Election, But Also, There Was 2008

Last Thursday, I asked what could possibly go wrong for Kamala as a candidate, especially over the course of 100 days. I was thinking about this especially in the context I brought up Saturday,

I don't think it's out of line at all to envision a world crisis coming up in the next months with Joe literally incompetent to deal with it, a White House staff in disarray, and a collection of amateurs and bunglers on the Harris staff and campaign incapable of maintaining a cohesive and consistent response, domestically or diplomatically. This is where Murphy's Law is definitely going to kick in.

This morning, according to the Wall Street Journal,

A stock-market selloff intensified around the world, sending U.S. indexes sliding and volatility spiking to its highest levels since the Covid-19 pandemic.

In early trading, the Nasdaq Composite tumbled more than 4%. The S&P 500 fell more than 3% and the Dow was around 2.6% lower.

Turbulence started in Japan, with the Nikkei 225 falling more than 12%, its worst one-day drop since the crash after Black Monday in 1987. Losses cascaded across Europe and the U.S., as investors dumped riskier assets and flocked to safety.

The declines extended what has been a dizzying few days on Wall Street during which this year’s most popular trades have been aggressively unwound. A selloff in tech shares continued Monday, with Nvidia, Meta and Apple each losing 9% or more. (The iPhone maker took an extra hit from news that Berkshire Hathaway had slashed its Apple stake.)

Via CNN,

Japanese stocks suffered their biggest ever daily loss Monday as fears about a US economic slowdown sent shock waves through global markets.

The Nikkei 225 index of leading stocks in Tokyo lost a staggering 4,451 points, its biggest drop in history. The index closed more than 12% down, taking its losses since early July to 25% and entering bear market territory.

“That was a crash. It smelled like 1987,” Neil Newman, head of strategy at Astris Advisory in Tokyo, told CNN. He was referring to “Black Monday” in October 1987, when global markets plunged and the Nikkei lost 3,836 points.

Fears of a sharp slowdown in the US economy have raised expectations that the Federal Reserve will have to slash interest rates.

Meanwhile,

Prime Minister Benjamin Netanyahu is feeling more emboldened to act against Iran after US President Joe Biden dropped out of the 2024 election, according to a report in the Telegraph that cites a senior Israeli official.

The official tells the British newspaper that Biden was seeking to “restrain” Netanyahu while he was still in the race, and had “told him not to respond too harshly to Iran’s attacks.”

Over the past couple of weeks, I've focused on the 1972 election as a parallel case to this year's campaign, with McGovern's difficulty finding a running mate before his party's convention exacerbated by his need to find another one when he had to replace Thomas Eagleton, himself something of a Plan F or G, two weeks later. But given the circumstances we're beginning to see, a better parallel might now be 2008:

In the fall of 2008, many news sources were reporting that the economy was suffering its most serious downturn since the Great Depression. During this period, John McCain's election prospects fell with several politically costly comments about the economy.

On August 20, John McCain said in an interview with Politico that he was uncertain how many houses he and his wife, Cindy, owned; "I think—I'll have my staff get to you," he told the media outlet. Both on the stump and in Obama's political ad, "Seven", the gaffe was used to portray McCain as somebody unable to relate to the concerns of ordinary Americans. This out-of-touch image was further cultivated when, on September 15, the day of the Lehman Brothers bankruptcy, at a morning rally in Jacksonville, Florida, McCain declared that "the fundamentals of our economy are strong," despite what he described as "tremendous turmoil in our financial markets and Wall Street." With the perception among voters to the contrary, the comment appeared to cost McCain politically.

On September 24, 2008, after the onset of the 2008 global financial crisis, McCain announced that he was suspending his campaign to return to Washington so he could help craft a $700 billion bailout package for the troubled financial industry, and he stated that he would not debate Obama until Congress passed the bailout bill. Despite this decision, McCain was portrayed as somebody not playing a significant role in the negotiations for the first version of the bill, which fell short of passage in the House.

. . . All the aforementioned remarks and campaign issues hurt McCain's standing with voters. All these also occurred after the onset of the economic crisis and after McCain's poll numbers had started to fall. Although sound bites of all of these "missteps" were played repeatedly on national television, many pundits and analysts say that the actual financial crisis and economic conditions caused McCain's large drop in support in mid-September and severely damaged his campaign.

There are two issues. One is that at some point, either Joe or Kamala, or both, is going to have to make a convincing statement about the current situation and what they intend to do about it -- but neither, as far as anyone can tell, is capable of saying anything even at the level of John McCain in 2008. The other issue is that, as in 2008, the outgoing administration owns the economy, Bush-McCain then, Obama-Harris now.

The timing could not be worse for Kamala Harris, whose name is one half of the "Biden-Harris" administration. It was her voice that credited "Bidenomics" with the state of the economy. She is tied to all of these policies, and if the economy does go into a full-blown recession, then it will fall on her.

The current big issue, whether Trump will debate Kamala on September 10 with ABC or September 4 with Fox, is going to be overtaken by events pretty quickly, while the prospect of a sudden economic downturn is going to force Kamala out of her basement to answer questions, something Trump is eminently capable of doing. Nor do I think Kamala's choice of running mate is going to amount to much of anything, other than a by-the-way illustration of her overall bad options.