On February 10th, CFA Society Boston welcomed over 500 attendees for its 34th Annual Market Dinner. This year’s featured guest was David Wasserman, the U.S. House Editor for the Cook Political Report—an independent, non-partisan newsletter that analyzes U.S. elections, campaigns, and overall political trends. Previous featured guests for the event include Madeleine Albright, Ben Bernanke, and Alan Greenspan.

In 2016, Wasserman drew wide praise for his pre-election analysis including his piece, “How Trump Could Win the White House While Losing the Popular Vote,” written two months before the election. Wasserman has also served as an analyst for the NBC News Election Night Decision Desk since 2008.

J.P. Marvel’s Executive Vice President and Director of Research, Robert T. Stephenson, attended this year’s event and has put together a summary of key points and takeaways from Wasserman’s presentation:

Does Where You Shop Depend on Where You Stand?

Wasserman focused primarily on the Presidential race: where we presently stand, what we can expect to see in the coming months, and the factors affecting this election cycle. Wasserman uses unique data points to evaluate where voters stand on issues and predict how they may vote. He’s studied how the patrons of certain businesses correlate with political allegiances. In particular, he points to Cracker Barrel restaurants and Whole Foods grocery stores. Most Republican districts are heavily populated with Cracker Barrel restaurants. On the other hand, Whole Foods can usually be found in most Democrat districts.

Going back to the 1992 presidential election, Democrat Bill Clinton won 59% of the districts that had a Whole Foods location and won only 40% of those with a Cracker Barrel location—a 19% difference that Wasserman dubbed the “culture gap.” In the presidential elections that followed, the culture gap continued to widen. Twenty years later, in 2012, Democrat Barack Obama won 75% of the Whole Foods districts and only 29% of the Cracker Barrel districts, a whopping culture gap of 46%. The culture gap widened further in 2016 to an all-time high of 54%.

The cultural and political divide extends beyond food. Wasserman also showed an analysis of Lululemon districts versus Tractor Supply districts. In 2016 Trump won only 24% of Lululemon districts yet won 83% of Tractor Supply districts—a 59% culture gap. The size of the gap reflects the divide not only in our country, but also in our D.C. representative body.

Shift to November

Wasserman also focused on the fall elections. He explained that the House of Representatives has 234 Democrats and 200 Republicans; therefore, the Republicans would need to gain 18 seats to become the House majority party. That event is possible but highly unlikely. In fact, Wasserman would not be surprised if the Democrats won several seats of retiring Republican incumbents. Democrats are currently favored to do so, and they are also winning the fundraising battle.

Presently, the Senate is comprised of 53 Republicans and 47 Democrats. Republicans are slightly favored to retain majority control because their seats up for reelection are mainly in “safe” Republican states. According to Wasserman, the key races to watch are in Arizona, Colorado, Maine, and North Carolina.

Wasserman expects the race for the White House will remain tight. The 2016 presidential election was ultimately decided by three (of 3,141 total) counties that leaned Republican. Trump lost the popular vote by 2.9 million votes, but won the electoral vote due to Macomb, Michigan, Westmorland, Pennsylvania, and Waukesha, Wisconsin. Wasserman anticipates the 2020 presidential election will come down to those three counties as well as the states of Florida, North Carolina, and Arizona.

According to Wasserman there are four key reasons Trump is slightly favored to win:

  1. Voters like the state of the economy. Trump presently has a 56% approval rating on how he has handled the economy. This rating bests Bill Clinton’s approval rating when he won reelection in 1996.
  2. Trump has strong Republican support. His approval rating among Republican voters is 92%. At this point many Trump dissenters have left the party.
  3. Changing ethnic demographics lowers Trump’s threshold for victory to 47%. Wasserman noted a four-year decline in the non-Hispanic, white share of voting age citizens. The states that have grown in this demographic are states that Democrats are already expected to win. The Democratic nominee may need to beat Trump by as much as 4% to win the electoral vote.
  4. The issues surrounding the Iowa Caucuses may be a boost for Trump. Iowa, which is a state that leans liberal, voted 43% progressive (Sanders and Warren) and 56% moderate (Buttigieg, Biden, and Klobuchar). As for the billionaires running, Wasserman believes that Tom Steyer is a non-factor, but Michael Bloomberg could be a factor. Overall, Wasserman has his doubts that the Democratic Party can come together and rally under one candidate.

By Super Tuesday, March 3rd, 38% of delegates will have been decided. Wasserman could see the Democrats making it all the way to June without having settled on a candidate. He speculated that a Sanders vs. Bloomberg showdown could be in the works, making for an unpredictable Democratic National Convention in Milwaukee. In Wasserman’s estimation, the most likely scenarios favor Trump. That said, Wasserman also offered a potential rescue for the Democrats: a balanced ticket. For example, if Biden wins the nomination, Wasserman believes he must select someone to his left—perhaps Stacy Abrams—to stand a chance. If Sanders or Warren win the nomination, Wasserman believes that they should—but wouldn’t—choose a more moderate running mate.

Election Q&As

For the last portion of the evening, Wasserman took questions from the audience. He was asked about polling—he thinks polling has been unfairly maligned. The real problem, for Wasserman, is that the media focuses too much on national polling and not enough on electoral voting projections. In 2016, national polling had Hillary Clinton with a 3-4% lead. Ultimately, she won with 2.1% of the popular vote, but lost the electoral vote. Wasserman also commented on the influence of social media, warning that we shouldn’t pay too much attention to the Twitter traffic that candidates receive. He did concede that the effective “nationalization” of news has opened the floodgates for the dissemination of disinformation.

Wasserman also fielded a question about what matters most to election success. He said that voter turnout, despite the cliché, is the biggest and most important thing. Unlike 2016, Trump now has an established campaign operation to bring out voters to the ballots. Wasserman speculates that whites without college degrees may come out in droves to vote in this upcoming election. There are also pockets of voters, albeit different ones, that Democrats may bring out as well.

One of the last questions pertained to candidate debate performance. Wasserman doubts this will matter much. Wasserman also wasn’t convinced that many debates, if any, would take place between the Democratic and Republican candidates. Nothing in the Constitution says debates must be held, and Wasserman wonders whether Trump would “bother to show up for them.”

As always, the CFA Society Boston’s Annual Market Dinner was a rewarding experience to learn from one another and the speakers who have firsthand experience with our nation’s politics and finance landscape. David Wasserman shared much-needed perspective and insight during a time marked by political uncertainty.