Why They Forced Biden Off The Ticket
Well, We Didn't Expect That
Last week, we placed a bet that Biden would still be the Democrats' nominee. We got that one wrong, as we noted in our Keeping Score post yesterday.
Keeping Score
— Portfolio Armor (@PortfolioArmor) July 21, 2024
How we did on the trades we exited last week. $ANF $TSLAhttps://t.co/rzoBqAbjf9
It's worth noting why we thought Biden would stay on the top of the ticket, to help understand what happened over the weekend. We based our bet on two facts:
- The DNC rules committee was stacked with Biden loyalists, leaving anti-Biden Democrats without much of a mechanism to remove him from the ballot against his will (The "loophole" ZeroHedge reported on over the weekend was basically encouraging delegates to vote against Biden, but it's not clear this would have worked, as some states require their delegates to vote for their original candidate on the first ballot).
- Joe Biden (and especially Jill Biden) had nothing to gain from Joe not running for reelection. Power is addictive, and a ~33% chance of winning in November was better than a 0% chance. Plus, unlike other former Presidents, there really wasn't anything promising for Biden to look forward to in his post-Presidential career. He and Jill couldn't expect to be lavished 7-figure Netflix and book deals.
Nevertheless, Biden dropped out of the race. Why?
The Official Explanation
The closest thing we got to an official explanation was this anonymously-sourced piece by Politico,
Why Biden finally quit https://t.co/YZpbrb37Bg
— POLITICO (@politico) July 21, 2024
The gist of which was this:
Steve Ricchetti, who’s been with Biden since his days in the Senate, drove to see the president at his house on the Delaware shore on Friday. Mike Donilon arrived on Saturday. The two men, both of whom had been by Biden’s side during key decisions about whether to seek the presidency in 2016 and 2020, sat at a distance from the president, still testing positive for Covid, and presented damning new information in a meeting that would hasten the end of Biden’s political career.
In addition to presenting new concerns from lawmakers and updates on a fundraising operation that had slowed considerably, they carried the campaign’s own polls, which came back this week and showed his path to victory in November was gone, according to five people familiar with the matter, who, like others interviewed for this article, were granted anonymity to discuss private conversations. Biden asked several questions during the exchange.
Why The Official Explanation Doesn't Pass The Smell Test
The problem with this explanation is that Harris doesn't poll much better than Biden against Trump. In fact, if you include minor party candidates, she actually polls worse against Trump. Trump was leading Biden by 3.7% in the RealClearPolitics average,
And he was leading Kamala Harris by 5%.
The Real Reasons They Wanted Biden Out
Obviously, Nancy Pelosi and other Democrats who were pressuring Biden to drop out of the race knew about these polls. They knew that Kamala Harris doesn't give them a much better chance of beating Trump in November than Biden did. But there are still three reasons why they probably think they're better off with Harris than Biden:
- The turnout effect down ballot. Kamala can at least campaign actively, and Dems probably think they'll get better turnout for Congressional and other races with her at the top of the ticket than Biden.
- Campaign donations. Donors were apparently revolting against a Biden-led ticket. As soon as Biden (or, whoever runs his X account) posted that letter saying he ws dropping out of the race, small donations to Act Blue spiked.
- Clearing the decks for 2028. Had Biden stayed at the top of the ticket this year and lost, and Democrats tried to nominate anyone other than a black woman in 2028, black women (the Democrats' most loyal voting demographic) would have protested that Kamala had been passed over. By letting her run this year, they won't have that problem in 2028. If she loses to Trump-Vance, Democrat leaders can point out they already tried running a black woman at the top of the ticket last time, and now they need to focus on winning.
What We Still Don't Know
We know why it made sense for Dems to get rid of Biden, but what we still don't know is how they convinced the Bidens to give up the ghost.
- Did they threaten to expose Biden corruption, or to go along with Republican efforts to prosecute the Bidens in a second Trump administration?
- Did they promise the Bidens some sort of payoff for Joe dropping out?
- Does Joe Biden even know he dropped out of the race?
Perhaps we'll get some clarity on those questions this week.
Looking Ahead: Trump As The Bitcoin Candidate
Later this week, Donald Trump will be speaking at Bitcoin 2024 in Nashville. Some have speculated Trump may say something then that could move the market, such as announcing that if he's elected he'll start a national Bitcoin fund of some sort, perhaps modeled on the Strategic Petroleum Reserve.
If you're looking to add some leveraged Bitcoin exposure ahead of that, you can read about our most recent Bitcoin-related trade below.
And be sure to subscribe to our trading Substack/occasional email list below in case we find another promising trade idea before the conference.
If you'd like to stay in touch
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