What impact will Trump’s guilty verdict have on the U.S. social economy?

Conviction cannot determine whether Trump wins or loses the election.

On Thursday (May 30th), former US President Trump was found guilty in the "hush money" case, and a new era of uncertainty in American politics has begun.

A Manhattan jury in New York found all 34 counts of falsifying business records against Trump guilty, and the relevant sentencing will be announced on July 11.

Prior to this, some situations have occurred in American politics this year that may subvert people's traditional views. For example, opinion polls show that voters are reluctant to attribute the improvement of average living standards to the current president.

Voters are more supportive of leaders who make them materially richer. It used to be one of the clearest analytical guides for American politics. Now, voters have to face the fact that another major party candidate has been convicted. This is the first time such a situation has occurred on the eve of a presidential election.

Trump is expected to appeal the ruling.

Investors may be most concerned about whether to buy or sell Nvidia (NVDA) recently, rather than whether Trump is found guilty. However, the difficulty of predicting the outcome of the November election and the huge policy differences between the two presidential candidates increase the risk of a political storm in November.

It is normal for election year uncertainty to put pressure on economic growth. If the White House changes hands, it will indicate that federal policies may change, which will reduce the willingness of companies to make long-term spending decisions. Trump's conviction may exacerbate the impact of this factor, because it will take some time to know how the incident will develop, making it more difficult to predict what a potential "Trump 2.0" will look like.

In recent months, pollsters have been trying to determine whether Trump's conviction will bring new information to voters. A Quinnipiac University poll released on May 22 showed that 70% of voters have closely followed the news about the trial at least to some extent, and only 6% of Trump voters said they would be less likely to vote for him if he was convicted, compared with 24% who said they would be more likely to vote for him if he was convicted.

Will this be enough to affect the odds in several swing states that will determine the outcome of the election? It should be noted that the theory relied on by prosecutors is that Trump's team believes his behavior is important to voters. According to the government, the payment to adult film star Stormy Daniels was to keep Trump and her relationship secret from the public until November 2016. In addition, Trump's public image has been damaged by the discriminatory tape exposed by "Access Hollywood". (Trump has previously said the payments to Cohen, a key witness, were for legal services and has denied having an affair with Daniels.)

Voters in 2020 already know both stories, and Trump narrowly lost the election that year. Moreover, ugly stories about Trump’s behavior have dominated headlines for weeks since the start of this trial, but he still holds a slight lead in national polls.

One ​​reason for this may be that national polls are a poor reflection of how voters will react in November, especially with the election still months away.

National polls are a poor reflection of how voters will react in November because it’s too much to ask to try to understand how the lives of hundreds of millions of Americans will change over the next four years through a “yes” or “no” decision in November, and Americans will continue to do so.

In 2018, John Dickerson, a well-known CBS reporter, laid out his views on what he called the “impossible president.” “America is a nation so obsessed with its president that we have undermined our own ideals of constitutional democracy,” he wrote. It is physically, mentally and logistically impossible for one person to undertake all the tasks that the president is asked to do. “No single person, man or woman, can represent the competing interests of 327 million American citizens,” Dickerson wrote. (The current U.S. population is 337 million.)

Some people certainly see their vote as an endorsement of a person’s morality, and those left-wing voters who threatened to abandon Biden because of his support for Israel acted on that idea.

But a vote for president, taken literally, means much more than giving a candidate the right to sleep in the Lincoln Bedroom of the White House. It comes with command of the military, control of the executive branch, nominations to judges, myriad regulatory powers and more. Victory is also a recognition of Americans’ loyalty to society—we all want to root for the team that wins.

In that sense, it’s easy to conclude that voters shouldn’t support a damaged candidate. Add to that the fact that Trump promotes the malicious idea that the outcome in court is the result of a politically driven witch hunt. There’s a good chance that an appeal could change the outcome, and anyone who believes in America’s strong legal system needs to consider that the system can make mistakes with good intentions.

This isn’t to say that a conviction means Trump will win or lose the election. That’s still to be determined, and a clearer analysis will only be possible if polls continue to show public opinion taking a decisive step in one direction or the other, and realistically, that point won’t come until November 5.

But that’s not to say that a conviction isn’t important. If Trump loses, some voters will see it as a result of the political elites uniting against him. In a political system as calcified as the United States, it is difficult to judge what this angry energy will bring, although it is easy to see where the pressure points are. The US Congress has barely played much of a role this year and is teetering on the brink of default. If voters continue to support candidates who refuse to cut the debt, it will be difficult to improve this situation.

What if Trump wins? The rule of law underpins the health of the market and the strong returns it has delivered in recent years. The S&P 500 is made up of "profit machines" that thrive in difficult environments and will not be easily eliminated. The ability of American companies to thrive will be tested by a president like Trump who believes that the legal system has been "weaponized" against him, but the effects may not be immediately apparent.

What is most important is how American companies will be affected. For the broader political system and the US economy, the outcome of this defining moment in Trump's legal problems will be uncertainty.