The US Election and the Global Economy

STANFORD – Big changes are underway in the United States, as the country gears up to elect a new president, one-third of the Senate, and the entire House of Representatives this November. The outcome will have profound consequences for US economic policy, and thus for the global economy.

As it stands, Hillary Clinton remains the frontrunner for the Democratic nomination, though she has not yet pulled away from her socialist opponent, Senator Bernie Sanders. The bombastic billionaire Donald Trump is leading the Republican field, followed by firebrand Senator Ted Cruz of Texas, Senator Marco Rubio, a talented mainstream conservative from Florida, and, further back, popular Ohio Governor John Kasich and neurosurgeon Ben Carson.

It is impossible to know whether these early trends will hold through the rest of the primaries, now turning to the South and Midwest. America’s media and political junkies are consumed by the various possibilities. Can Rubio rally a broad coalition, or will Trump win the Republican nomination? Would a Trump nomination help Clinton win the general election?

In fact, many Republicans fear a contest pitting Trump against Clinton. Though Clinton has plenty of weaknesses – voters, especially young people, do not trust her, and she may face legal repercussions for dealing with highly classified information using a private email server when she was Secretary of State – the nasty infighting among Republicans may give her a big advantage in November. Many Republicans believe that Trump’s nomination would cost them the Senate and the White House.