Economics

Election lawsuits are flooding America’s courts

Published

7 days ago

October 31, 2024

AMID TEETERING uncertainty over who will win next week’s presidential election, little suspense looms about one thing: if Donald Trump loses, he will not concede to Kamala Harris. Instead, as he has been doing throughout his campaign, Mr Trump will repeat false claims of fraud from the 2020 election and apply them to 2024 with a fresh emphasis on a supposed scourge of non-citizen voting. And he will take those claims to court. Mr Trump’s team and supporters filed more than five dozen post-election lawsuits in 2020, resulting in one inconsequential win and 64 losses. Might he have a better shot at litigating a loss this time around?

Probably not. The courts are already busy considering hundreds of legal claims—regarding voter identification, registered-voter rolls and early voting, among other issues—from Republicans and Democrats alike. Few significant cases are going Mr Trump’s way. The chances of a lawsuit after November 5th turning an electoral loss into a win are low. But Mr Trump’s legal strategy could cultivate a destabilising post-election landscape in America for the second time in two cycles.

One minor win for Republicans came in a decision barring University of North Carolina students from using digital college IDs to vote. A second involves late-arriving ballots. In a stunning decision on October 25th, the Fifth Circuit Court of Appeals sided with the Republican National Committee in a challenge to Mississippi’s law permitting ballots postmarked by election day to arrive up to five business days later—a practice used in some 17 states and the District of Columbia. A three-judge panel said this arrangement, despite being widespread and long-standing, violates the principle of a uniform “election day” in federal law. For technical reasons, the ruling will probably not amount to much for the 2024 election. But it could inspire a national reckoning in the lead-up to 2026.

Otherwise, pre-election legal bouts are mainly being won by the Democrats. In an apparent plan to stack the deck in a battleground state, three pro-Trump Republican members of Georgia’s board of elections instituted eleventh-hour changes to vote-counting and certification rules in August. On October 16th a state judge declared those changes “unlawful and void” and a higher court, on October 22nd, refused to take up an appeal before the election. This ensures that local officials in Georgia will not be empowered to “find” votes for losing candidates, as Mr Trump infamously requested of the secretary of state, Brad Raffensperger, during a phone call on January 2nd 2021.

Most attempts to remove voters from the rolls have faltered, too: one such lawsuit in Nevada was dismissed on October 18th while another from the Republican National Committee accusing Michigan of poorly managing its rolls went nowhere in a district-court ruling four days later. On October 28th, a similar lawsuit fizzled in Illinois.

But another effort to cull voter lists has survived a trip to the Supreme Court. On October 30th the justices ruled 6-3 (with all three Democratic appointees in dissent) that Virginia can move ahead with its purge of 1,600 voters who are, purportedly, non-citizens. On October 25th a federal judge had sided with the Biden administration, finding the purge to violate the National Voter Registration Act. This law, passed in 1993, requires a 90-day quiet period during which states may not “systematically” remove ineligible voters from the rolls due to the risk that eligible voters’ registrations could be mistakenly cancelled. On October 27th the Fourth Circuit Court of Appeals refused a request from Virginia’s governor, Glenn Youngkin, to keep the purge in place. But in an unexplained order three days later the Supreme Court sided with Mr Youngkin. The ruling is not likely to shift outcomes in Virginia’s races but could portend similar decisions—potentially, again, along party lines—if more voter purges reach the Supreme Court.

A case involving the all-important battleground state of Pennsylvania also arrived at the Supreme Court this week. Republican National Committee v Genser asks whether voters who mistakenly invalidate their ballots by posting them without the required “secrecy envelope” can vote at their polling place instead. A 4-3 majority of the Pennsylvania supreme court decided that such voters enjoy this opportunity under state law. But in its brief to the Supreme Court, the RNC is relying on the opinion of a dissenting Pennsylvania judge that the majority “exceeded the bounds of statutory interpretation” and “supplanted the power vested in our General Assembly to regulate elections”.

Genser seeks to exploit a small opening in Moore v Harper, a Supreme Court decision from 2023. Moore deflated but did not entirely discard the “independent state legislature theory”, the idea that nobody, including judges, can override a state legislature’s election rules.

Could such cases affect the outcome of the election? The number of votes at stake would make a difference only in the event of a near tie in a battleground state along with a close split in the electoral college. Rick Hasen, an election-law expert at the University of California, Los Angeles, says that if the Supreme Court were to adjudicate a razor-thin margin in a decisive state—as it did in Bush v Gore in 2000—”motivated reasoning can take over and partisanship may matter”. But otherwise, he reckons, “it is hard to see Mr Trump litigating his way from an election loser to an election winner”.

A separate concern centres on Trump loyalists on county election boards who may refuse to certify vote totals. At least seventeen local officials in swing states demonstrated this intransigence in 2020, delaying but not upending the counting. More followed in 2022. Citizens for Responsibility and Ethics in Washington, a watchdog, has counted 35 established obstructors currently on election boards across the country. But Wendy Weiser of the Brennan Centre, a think-tank, says courts have stepped in quickly and decisively to enforce these officials’ purely ministerial obligations. An official’s role is like that of a principal at graduation, Ms Weiser explains: their job is to “hand out the diplomas”, not investigate “whether a student really deserved an A on the calculus exam”. In sum, Ms Weiser says, “it will be theatre”, but with the clarity of state law and the speed of state courts, holdouts pose no “threat to the finality of the election”.

For all the weaknesses of Mr Trump’s lawsuits, the volume of litigation may have an aim other than success in court. The litigation fuels Mr Trump’s persistent efforts to discredit the process, to accuse Democrats of cheating and to raise fears that illegal immigrants are corrupting the election. Courts may remain unpersuaded by claims that are unsupported by evidence. But Mr Trump’s flock, not judges, could be their ultimate audience. ■

Economics

Democrats need to understand: Americans think they’re worse

Published

7 hours ago

November 6, 2024

Business Finance News

If you think Donald Trump is too crass or cruel or incompetent to be president—if you are disappointed or even astonished that, having tried and failed to subvert the will of the people in the last election, he has come back to win fair and square—you should be asking yourself this question: why, to so many Americans, does the Democratic Party seem worse?

This victory is a tremendous achievement for Mr Trump, who after his loss in 2020 and the attack on the Capitol on January 6th 2021 was counted out even by leaders of his own party. At the time Mitch McConnell, the Senate Republican leader, who privately regarded Mr Trump as “a sleazeball” and “stupid”, called the insurrection “further evidence of Donald Trump’s complete unfitness for office”, according to reporting he has not disputed in a new biography by Michael Tackett, a journalist.

Yet what might seem a psychological frailty—an inability to brook criticism or concede mistakes, much less defeat—has for Mr Trump been a mighty source of political strength, one that intensifies his connection to the voters he has made the base of the Republican Party. As in 2016, Mr Trump wielded his command of that bloc of voters this year to clear a path through crowded Republican primaries, and then relied upon “negative polarisation”, or fear of the other guys, to unite the party. “Can you believe he endorsed me?” Mr Trump chortled at a rally in North Carolina on November 3rd, gloating over how Mr McConnell eventually fell into line. Mr Trump felt no obligation to reciprocate. “Hopefully we get rid of Mitch McConnell pretty soon,” he said.

Mr Trump has shown courage, not only in weathering assassins’ attacks but in insisting on views on trade, entitlements and other matters that a few years ago were heresy within his party. With his sophisticated grasp of new and legacy media and his instinct for the basic needs and fears of many Americans, he has revolutionised how American politics is conducted and shifted the policy terrain over which it is waged. In terms of disrupting what came before, he has had more effect than even Ronald Reagan.

Unlike Reagan—or the other two-term presidents since, Bill Clinton, George W. Bush and Barack Obama—Mr Trump has never been very popular, though he managed, in this third run as the Republican nominee, at last to win the popular vote. Unlike those predecessors, Mr Trump has relied upon division, not addition, for his electoral maths. In his first term his average approval rating of 41% was the lowest ever measured by the Gallup Poll, which began tracking the statistic under Harry Truman. Democrats have good reason to think Mr Trump repels many voters when he calls adversaries “vermin” or “the enemy from within” or says illegal immigrants are “poisoning the blood of our country”.

Yet, after this victory, whatever disdain Democrats have for Mr Trump should be cause only for humility and self-scrutiny. As in 2016, Mr Trump’s broad support will present his adversaries with a Rorschach test in which they can see their preferred image of America, and it will be ugly. For some, white supremacy and misogyny will explain Mr Trump’s success, while others may attribute it to tax cuts and greed. Some will conclude that poor, non-white or female Americans have been ensorcelled into voting against their self-interest. Rather than retreat into some grand theory, they would so better ro think through how, in a divided country, President Joe Biden might have nudged the balance a few points away from Mr Trump, rather than to him. Kamala Harris was no bystander, but pime responsibility lies with the president she served.

Mr Biden did not heed his own warnings about Mr Trump. He tried to eat into Mr Trump’s support with blue-collar workers through giant investments in manufacturing and infrastructure that offered something to everyone. But, unlike Mr Clinton or Mr Obama, he ducked choices that would have respected the concerns of most Americans but disappointed left-wing Democrats. A political strategy of addition still requires some division.

Most egregious, Mr Biden resharpened Mr Trump’s most effective political wedge by doing away with obstacles he had created to illegal immigration, with no alternative. By the time he restored some of Mr Trump’s restrictions this spring, more than 4m migrants had crossed the southern border, compared with fewer than 1m under Mr Trump. That was terrible for the Democrats as a party, and worse for people they want to help and the cause they believe in: under Mr Biden, Americans who say they want a decrease in legal immigration rose from a minority to a majority, as did the number who favour mass deportation.

How to defend democracy

Even where Mr Biden had accomplishments that undermined Mr Trump’s arguments, he let himself be constrained by his party’s loudest activists. Oil production rose to record levels, but Mr Biden did not boast about that. He was also no longer up to the demands of presidential communication that Mr Trump understands so well. He was not constantly, energetically promoting his success in sustaining economic growth and raising wages. His approval rating sagged as low as 36% just asother Democrats were forcing him to face the obvious: he should not be running again. In the short time Ms Harris had, she waged a good campaign. But any politician would have struggled under such burdens. She could not separate herself enough from Mr Biden, or from the video Mr Trump’s ads used, to devastating effect, of her recently declaring positions that were alienating to most Americans.

“We have learned again that democracy is precious,” Mr Biden proudly declared during his inaugural address almost four years ago. “Democracy is fragile. And at this hour, my friends, democracy has prevailed.” Now it has prevailed again. Will Democrats get the message this time? ■

Economics

The Fed is likely cutting rates again Thursday. Everything you need to know

Published

14 hours ago

November 6, 2024

Business Finance News

Federal Reserve Board Chairman Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., September 18, 2024. REUTERS/Tom Brenner

Tom Brenner | Reuters

The Federal Reserve likely will stick to the business at hand when it wraps up its meeting Thursday with another interest rate cut, but will have its eye on the future against a backdrop that suddenly has gotten a lot more complicated.

Financial markets are pricing in a near-certainty that the central bank’s Federal Open Market Committee will lower its benchmark borrowing cost by a quarter percentage point as it seeks to “recalibrate” policy for an economy that is seeing the inflation rate moderate and the labor market soften.

The focus, though, will turn to what’s ahead for Chair Jerome Powell and his Fed colleagues as they navigate a shifting economy — and the political earthquake of Donald Trump’s stunning victory in the presidential race.

“We think Powell will refuse to give any early judgment on the implications of the election for the economy and rates, and will seek to be a source of stability and calm,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a a note issued before the election’s outcome was known.

In keeping with policymakers’ historical desire to stay above the political fray, Powell “will say the Fed will take the time it needs to study the new administration’s plans” then will “refine this assessment as actual policies are developed and enacted,” Guha added.

So while the immediate action will be to stay the course and enact the cut, which equals 25 basis points, the market’s attention likely will turn to what the committee and Powell have to say about the future. The fed funds rate, which sets what banks charge each other for overnight lending but often influences consumer debt as well, is currently targeted in a range between 4.75%-5.0%.

Market pricing currently favors another quarter-point cut in December, followed by a January pause then multiple reductions through 2025.

Preparing for Trump

But if Trump’s agenda — tax cuts, higher spending and aggressive tariffs — comes to fruition, it could have a meaningful impact on a Fed trying to right-size policy after the mammoth rate hikes aimed at controlling inflation. Many economists believe another round of isolationist economic moves from the president-elect could reignite inflation, which held below 3% during Trump’s entire first-term despite a similar recipe.

Trump was a frequent critic of Powell and the Fed during his term, which ran from 2017-21, and is in favor of low interest rates.

“Everyone is on the lookout for future rate cuts and whether anything is telegraphed,” said Quincy Krosby, chief global strategist at LPL Financial. “Also, however, there’s the question of whether or not they can declare victory on inflation.”

Any answers to those questions would be largely left to Powell’s post-meeting news conference.

Though the committee will release its joint decision on rates, it will not provide an update on its Summary of Economic Projections, a document issued quarterly that includes consensus updates on inflation, GDP growth and unemployment, as well as the anonymous “dot plot” of individual officials’ interest rate expectations.

Beyond the January pause, there’s considerable market uncertainty about where the Fed is heading. The SEP will be updated next in December.

“What we’re going to hear more and more of is the terminal rate,” Krosby said. “That’s going to come back into the lexicon if yields continue to climb higher, and it’s not completely associated with growth.”

So where’s the end?

Traders in the fed funds futures market are betting on an aggressive pace of cuts that by the close of 2025 would take the benchmark rate to a target range of 3.75%-4.0%, or a full percentage point below the current level following September’s half percentage point cut. The Secured Overnight Financing Rate for banks is a bit more cautious, indicating a short-term rate around 4.2% at the end of next year.

“A key question here is, what’s the end point of this rate cut cycle?” said Bill English, the Fed’s former head of monetary affairs and now a finance professor at the Yale School of Management. “Fairly soon, they’ve got to think about, where do we think this rate cut period changes with the economy looking pretty strong. They may want to take a pause fairly soon and see how things develop.”

Powell also may be called on to address the Fed’s current moves to reduce the bond holdings on its balance sheet.

Since commencing the effort in June 2022, the Fed has shaved nearly $2 trillion off its holdings in Treasurys and mortgage-backed securities. Fed officials have said that the balance sheet reduction can continue even while they cut rates, though Wall Street expectations are for the run-off to end as soon as early 2025.

“They’ve been happy to just kind of leave that percolating in the background and they probably continue to do that,” English said. “But there’s going to be a lot of interest over the next few meetings. At what point do they make a further adjustment to the pace of runoffs?”

Economics

Donald Trump wins big and fast

Published

21 hours ago

November 6, 2024

Business Finance News

IT IS AN extraordinary comeback—or, as Donald Trump triumphantly put it in West Palm Beach, Florida, in the early hours of November 6th, “a political victory that our country has never seen before”. After losing four years ago he has survived impeachment, conviction as a felon, numerous other indictments and two assassination attempts, and will become America’s 47th president, to add to his stint as the 45th. He becomes the oldest man ever to win the White House.

Many had expected a long wait for the result of an extremely close election to become clear. In the event, the outcome was evident within hours. Mr Trump looked set to win all seven of the critical swing states: he triumphed in North Carolina, Georgia, Pennsylvania and Wisconsin, and had strong leads in Michigan, Arizona and Nevada. That translates into a decisive advantage in the electoral college.

It appears that Mr Trump was able to draw support from both urban and rural voters at levels notably higher than in his contest against Joe Biden in 2020. In state after state, Mr Trump performed better than he had in 2020. In Florida, for example, where he won by three percentage points last time, his margin is on track to surge to 12 points. And although opinion-poll aggregates had consistently shown Kamala Harris to be ahead in the national popular vote, it seems that Mr Trump may have won that too. Just as in 2016 and 2020, in other words, the polls underestimated Mr Trump’s support.

What went wrong for Ms Harris? For one thing, her advantage among women voters, on whom Democrats were pinning their hopes, turned out to be smaller than expected. The gender gap, between the votes of men and women, actually narrowed, from 23 points in 2020 to 20, according to exit polls. Among Hispanic voters, Mr Trump made striking inroads, improving his margin by ten percentage points compared with 2020, according to CNN’s exit poll. The trend was particularly strong among Hispanic men: Joe Biden won their vote by a margin of 23 points; this time Mr Trump was on track to prevail among them by a margin of ten points. More broadly, dissatisfaction with high inflation and immigration contributed to a sense among voters that the country was on the wrong track, for which they naturally blame the incumbent. Much as Ms Harris sought to present herself as the candidate of change, she was stuck with her association with the current administration.

As well as the White House, the Republicans also wrested back control of the Senate. It was always going to be hard for Democrats to hold on to their slender majority in that chamber, given that they were defending a disproportionate number of seats (a third of which are up for election in each election cycle). Not only did Republicans take the vacant seat in West Virginia, as expected; they also flipped Ohio and Montana and prevailed in a close contest in Nebraska. The upsets Democrats hoped for in Florida and Texas failed to materialise. Republican control of the Senate smooths the way for Mr Trump to make important appointments—from cabinet secretaries to generals to Supreme Court justices—that require Senate confirmation.

Whether the Republicans complete their sweep by retaining control of the House of Representatives is still not clear. Results in California, to arrive later, will determine that. But Mr Trump, in his victory speech, was confident that the House would be his, too.

“This will truly be the golden age of America,” he declared. Few will question that the country is indeed entering a new age. Whether Mr Trump will truly “heal” America, as he promised, is more debatable. Beyond America’s borders, too, the consequences are momentous. From tariffs to climate change to Ukraine, the world must brace itself for Trump II.■