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Opinion | Niall Ferguson

If Elizabeth Warren surges, and economy stutters, she could win the presidency

Elizabeth Warren campaigned last month in Keene, N.H.Barry Chin/Globe Staff/File/Globe Staff

Is it conceivable that, in just over a year’s time, Senator Elizabeth Warren of Massachusetts could defeat Donald Trump to become America’s first woman president? Yes. Here’s why.

Since the summer, Warren has surged. Former vice president Joe Biden was far ahead of her in the polls back in May: 41 percent to 8 percent. Today he is at 28 percent to her 23 percent, according to the RealClear Politics polling average. Biden is floundering, his age showing, his reputation tainted by the swamp that is Ukraine (not to mention China, where his son Hunter has been equally imprudent). Bernie Sanders just suffered a heart attack. Kamala Harris is fading. No one else is close.


The online betting market PredictIt now has Warren as the clear favorite, with a 51 percent chance of victory to Biden’s 23 percent. PredictIt also gives Warren a 36 percent chance of winning the presidency itself. Trump is only 39 percent.

True, Trump’s campaign team sees Warren as more beatable than Biden. That is precisely why they have gone after Biden so aggressively. “Sleepy Joe” is just the kind of candidate Trump has to worry about when it comes to the key swing voters in the key swing states. The people who did not show up for Hillary Clinton in 2016 — white working-class “deplorables” who had voted for Barack Obama as well as African Americans — could easily opt for Biden over Trump.

By comparison, Warren is a perfect target for a populist campaign. Not only is she a former Harvard professor — a toxic affiliation in most of Middle America — she also clearly exaggerated her Native American ancestry in order to advance her academic career. (She listed herself as belonging to a minority in the Association of American Law Schools legal directory from 1986 to 1995; changed her ethnicity from white to Native American at the University of Pennsylvania in 1989; and agreed to be listed as Native American when she taught at Harvard.) But a DNA test published last year revealed, embarrassingly, that Warren is no more than 1/64th Native American.


What’s more, Warren is a candidate far to the left of Biden on a range of key policy issues. She has proposed a 2 percent wealth tax on the very rich (those with fortunes above $50 million). And she wants to crack down on anticompetitive behavior by the big banks, returning retail banking to local community banks and credit unions.

Warren also has her own version of the Green New Deal. “On my first day as president,” she recently declared on Twitter, “I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking —everywhere.” Oh, and let’s not forget big tech: she plans to break up Facebook.

So it will not be hard for Trump to run against Warren the socialist. With the usual incumbent’s advantage and a favorable Electoral College map, he ought to win. But I agree with PredictIt. This is going to be close.

The key variable will be the state of the economy — and this is where things get interesting. At some point, Wall Street is going to wake up to the implications of Warren’s rise. True, most of her program could be enacted only if the Democrats won the Senate as well as the White House and proceeded to kill the filibuster. Is that impossible? No.


That means that four major sectors of the economy are in the firing line: the pharmaceutical industry, the banks, oil and gas, and big tech. That is a pretty big chunk of the major stock market indices.

As investors digest the rising probability of a Warren presidency, I predict a Wall Street sell-off. Businesses in the targeted sectors are going to cut investment. And that, in turn, is going to lower growth. Three years ago, Trump ran on a promise to double the growth rate. But already the economy is projected by the International Monetary Fund to grow by just 2.1 percent next year. If it tips over into a recession, Trump is done.

Ray Fair, an economics professor at Yale, has a simple model for US elections that has a pretty good track record. If there is a recession in 2020, the model predicts a 49 percent vote share for the Democratic candidate. It’s hard to see how the electoral college could save Trump in that scenario. (Remember, the winner got less than 50 percent in four out of the last seven elections.)

In other words, if Warren establishes herself as the Democratic frontrunner, there is a real chance that Trump’s presidency could enter a doom loop. The better her chances become, the worse the stock market and the economy do, the better her chances become.


Meanwhile, make no mistake: Trump is in deeper trouble today than he ever was during Robert Mueller’s investigation. Not only is the Ukraine scandal metastasizing, it is also clearly typical of the way the president deals with his foreign counterparts — brazenly seeking personal, commercial, and political advantage from his conduct of foreign policy, even at the cost of undermining his own administration’s strategy.

His base will not desert him and so the Republican-controlled Senate dare not turn against him. But independent voters are looking askance at Trump. And they are looking afresh at Warren. Can she beat him? Yes, she can.

Niall Ferguson is a senior fellow at the Hoover Institution at Stanford University.