By Alexander Bolton
06/28/16 – 06:11 AM EDT
A nine-hundred point drop in the stock market and signs of more economic turbulence to come is a troubling sign for Hillary Clinton, the presumptive Democratic presidential nominee effectively running for President Obama’s third term.
The United Kingdom’s vote to leave the European Union has shocked global markets while inserting new doubts about the global economy’s stability.
It’s a troubling development for Democrats who have touted President Obama’s economic record.
“Absolutely it’s a problem for the Democrats independent of who’s running that they’re running for a third term and they’re running with an economy that is at best weakly positive,” said Bruce Cain, a political science professor at Stanford University.
Clinton is ahead of Donald Trump, the presumptive Republican nominee, in the polls but a new survey published Monday by Morning Consult shows the economy is a potential vulnerability.
The poll of nearly 2,000 voters nationwide shows Clinton with a five-point lead generally.
But Trump leads Clinton by 45 percent to 38 percent when respondents were asked, “Which presidential candidate do you think will do more to grow the U.S. economy?”
Voters felt more confident, by five points, that Trump would create more jobs.
Republican lawmakers on Capitol Hill believe that if Trump focuses on the economy and avoids entangling himself in destructive arguments over identity politics, he could have a chance of winning in November.
While Senate Majority Leader Mitch McConnell (R-Ky.) has voiced criticism of Trump, it’s also become his mantra to point out the country is in the midst of the weakest economic recovery since World War II.
Goldman Sachs wrote in a memo to clients Sunday that the so-called Brexit will likely push Britain into a mild recession and knock a quarter of a percentage point of gross domestic product (GDP) growth in the United States.
Wall Street number crunchers don’t expect the economy will slip into recession but experts warn that new uncertainty created by Brexit could have a corrosive effect.
“I happen to think it’s more of a headwind than a quarter of a percentage point,” said Axel Merk, president and chief investment officer of Merk Investments, an investment advisor based in Silicon Valley. “How much confidence are you going to erode and how much investment is going to be held back?
“The ripple effects of this, the lack of leadership that’s coming out of the EU and UK to address the issues moving forward are going to hold investment back and it’s going much more than a quarter percentage point,” he added.
Cain said political scientists will issue models later this year forecasting the impact of the economy on the presidential race and the data will likely predict a tight race.
“The state of the economy puts this election within the margin of campaigning, meaning it’s not decidedly good, it’s not decidedly bad. It’s right at the level that every strategic decision will matter,” he said.
Clinton on Monday opted to tackle the threat head on by challenging Trump’s credentials to handle the economy during a join campaign appearance with Sen. Elizabeth Warren (D-Mass.) in Ohio, one of the battlegrounds of the fall election.
Clinton raised questions about whether Trump was primarily interested in guiding the national economy or benefiting his own business empire, noting his praise of Britain leaving the EU as something that could benefit his new luxury golf course in Scotland.
“When the pound goes down, more people are coming to Turnberry,” Trump told reporters on Friday.
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