Step Right Up, Folks: When the Chips Are Down for 2024, Here’s the Logic for a Bet on America

What risks could make 2024 an unhappy New Year? The first is the presidential election. The second and third are the two wars — in the Middle East and in Ukraine. The presidential election is shaping up as a bitter contest between an elderly incumbent who doesn’t seem up to the challenges of a dangerous world and an elderly former incumbent that a significant fraction of the electorate is convinced has an authoritarian bent. The wars are costly, and America could lose them.Your columnist’s unique selling proposition is the ability to see a positive upside invisible to the doomsayers. How could the politics of 2024 turn out better than what most people are predicting? One possibility is that a No Labels ticket could emerge and offer the voters the alternative they say they want.Another possibility is that Nikki Haley could beat Mr. Trump in the Republican primaries in New Hampshire and South Carolina, then capture America’s imagination as the first woman president. If Mr. Trump prevails in the primaries, he could pick Governor Haley, Senator Scott of South Carolina, or Congresswoman Elise Stefanik as his running mate, adding some new blood, to use a favorite Trump word.The election-related fears come in partisan varieties. Republicans are worried Biden will win and give America another four years of weakness, or fewer than four years concluding in a Kamala Harris administration that’s even further left and even less competent. Democrats are worried that Mr. Trump will win and govern in a way that is cruel, erratic, or extreme.These scenarios are possible, but anyone concerned about them might consider that the candidates themselves have interests in portraying their opponents as dire threats to America. Overstating what is at stake in the election helps raise campaign cash and motivate volunteers and voters to turn out.Yet America has strong constitutional guardrails, checks, and balances. Even if Mr. Biden wins, he’s unlikely to have 60 votes in the Senate, and he’s likely to have to contend with a conservative Supreme Court majority. Three of the last four times an incumbent president won re-election — Reagan in 1984, Clinton in 1996, and Barack Obama in 2012 — voters also sent to Washington a Congress at least partly controlled by the opposing political party.As for Trump, notwithstanding all the hype from the press about the death of democracy, his first term was fairly conventional — policy-wise. A second term is unlikely to depart dramatically from the first-term template. Mr. Trump and Mr. Biden are both more mainstream on national security than some of their intraparty rivals such as Vivek Ramaswamy or Alexandria Ocasio-Cortez.Mr. Biden faces some serious challenges with Iran, Russia, China, and the southern border. The four-front challenge puts America in a perilous strategic position. Yet all four fronts are winnable.Iran is internally weak. If Ayatollah Khamenei is rational, he’ll realize that attacking Israel or America too hard will hand the presidency back to Mr. Trump, who is a tougher negotiator against Iran than Mr. Biden. Especially after the debacle at Kabul, Mr. Biden knows that any sign of weakness to Iran is political poison; Mr. Obama’s Iran nuclear deal helped cost Hillary Clinton the presidency in 2016.If Iran pushes beyond what is rational, it will face an America that is as unified and resolute in crushing it as Israel has been in pursuing Hamas. Either way it’s a win: Iran backs down, or the regime is ousted or its military capacity degraded.President Putin’s Russia and Communist China’s Xi are similarly brittle and weak. If they miscalculate and overreach, they may find themselves surprised to meet bipartisan American resolve. Neither one should mistake Congressional dithering over Mr. Biden’s four-front spending package as an invitation to launch new attacks.As for the southern Border, there’s nothing like an approaching election to put pressure on Mr. Biden to stop the influx of illegal immigrants and asylum seekers. Here, too, it’s potentially a win-win. Either Mr. Biden gets control of the situation, or a Trump administration will.Panic over any of these situations — a Trump restoration, a widening Middle East war, border chaos, new aggression from Russia or China — may send stocks briefly lower from recent highs. Take it as a buying opportunity. For all the risk in real estate or banks, there are bullish counterarguments — artificial intelligence, dynamic pricing, interest rates headed lower.If that all sounds too rosy, remember that one year ago, when nearly everyone was predicting a recession and a flat stock market, this column was floating the possibility that the experts could be wrong and that we could be in for a surprisingly prosperous new year. Let the Roaring Twenties, as Ed Yardeni calls them, roll on. America looks like a good bet in 2024. Happy New Year.

Step Right Up, Folks: When the Chips Are Down for 2024, Here’s the Logic for a Bet on America

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