Our Notes on the Vice Presidential Debate

Editors’ Note: MarketMinder is intentionally nonpartisan. We favor no political party or politician and assess political developments solely for their potential economic and market impact.

Last night, Vice President Mike Pence and Senator Kamala Harris engaged in a tour de force of lying with statistics, ducking questions and rambling off-topic—otherwise known as your typical vice presidential debate. Ordinarily, our only mention of a vice presidential debate would amount to jokes about that old Saturday Night Live skit where the great Dana Carvey and Phil Hartman spoofed Ross Perot and Admiral James Stockdale, respectively, debriefing after the 1992 veep debate while joyriding. “Ping pong match! It was a.” But we digress.

Many pundits claim this year’s vice presidential debate is far more consequential than normal, given President Donald Trump’s being 74 and having a recent brush with COVID-19, as well as former Vice President Joe Biden’s 78 years of age. Speculation that one of the people on stage may be president before the next four years are out is relatively common, more common than usual, we suspect. That allegedly makes voters extra keen on hearing what they had to say and, potentially, makes it more influential on the race than usual. We don’t buy it, and we offer this word of advice: Don’t look to this debate for hints of who will win, much less what will happen to stocks.

In a way it is good that vice presidential debates are so feckless, because—and we say this as nonpartisan dispassionate people who enjoy cracking the odd joke—this debate amounted to 90 minutes of mind-boggling obfuscation. For example, when moderator Susan Page^[i] got to the main question at hand—how transparent should a president be about health issues and the likelihood of midterm succession—the answers strangely focused on whether a COVID vaccine approved during a Trump administration would be safe to take and Trump’s personal income tax maneuvering. It only got worse from there, with only one direct answer to a question (by our entirely unscientific, tallied-on-a-napkin count). The winner of this debate? We argue it was the fly that landed on one candidate’s hair. What can we say, it was a welcome change from all the passive-aggressive eye rolling, smirking and head shaking these two did at each other.

That is our synopsis, which is a long way of saying, if you were looking for hints of which ticket would gain more traction with voters last night, we don’t think you got any. But this debate isn’t unique in that regard. Vice presidential debates might provide comic fodder, which is generally why we watch. But they rarely, if ever, change anyone’s mind. The reason? Vice presidential candidates aren’t campaigning for themselves. They are surrogates for the person at the top of the ticket, and their job is to stick to the talking points. As a result, the normal guidance for assessing a presidential debate’s impact applies: It is entertainment aimed at boosting turnout. If the participants were truly interested in changing minds, we reckon they would answer the questions and engage in actual, thoughtful debate. Instead, the aim seems to be hitting their marks and genuflecting to existing supporters in order to get them really jazzed up. If vice presidential debates were actually effective in that regard—or at all meaningful to turnout, period, then, we reckon John Kerry would have won North Carolina in 2004 and Bob Dole would have run away with New York in 1996.^[ii]

Therefore, unless you are just really really, really into that sort of thing, we don’t recommend spending oodles of time trying to suss out Wednesday night’s winner (other than the fly) in order to divine the outcome on November 3. For one, pundits’ opinions will probably run the gamut, influenced heavily by their own biases. Real-time polls of supposedly undecided voters are probably no more meaningful, not least of all because the very notion of an undecided voter seems mostly like a myth in this election. Sure, people might describe themselves that way. But one of these candidates was on the ballot four years ago, and people decided then whether or not to vote for him. For any voter to change their mind would amount to saying to themselves, I was wrong. Human nature makes that an exceedingly difficult thing to realize, never mind admit out loud.

In our experience, by now, people know who they are going to vote for, deep down, no matter how open-minded they may want to believe they are. Not because they are hypocrites, but because we are fewer than 30 days from Election Day and, in some states, folks have already begun voting. In terms of each campaign’s policy prescriptions, values and priorities, the information has been out there for months. All that is left from here in the realm of “new” information is the proverbial October surprise, and those generally don’t come from debates. Heck, we have already arguably had two (Supreme Court Justice Ruth Bader Ginsburg’s death and Trump’s COVID diagnosis) and there are no clear election takeaways from either.

So don’t waste your time overthinking Wednesday’s show. It won’t predict what actually happens, and stocks don’t care about personalities anyway. They have done well (and poorly) under Democratic and Republican administrations alike. Investors’ biases can shape sentiment, which can influence the timing of returns—likely teeing up nice returns in 2020 and muted returns in 2021, if Trump wins, and below average 2020 returns and a robust 2021 if Biden prevails, as we have detailed in past articles. But that is only one driver for markets—an incomplete view. The upshot is basically just that neither a Trump nor a Biden win is inherently bearish. So even if the election doesn’t go the way you would like at a personal level, that is no reason to deviate from an investment strategy designed to reach your goals over the long term.

So stay cool, stay patient, and if you need a palate cleanser from Wednesday night, watch that old SNL skit. You’re welcome.