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The odds that a winner of the U.S. presidential contest wouldn’t be known on election night were high if you went by what the online prediction and betting markets were suggesting. The surge in mail-in and early voting amid the pandemic meant that the chances of knowing whether Donald Trump or Joe Biden won sometime Tuesday night was only about 25% on PredictIt, and still seemed low at about 80% for knowing anything by the weekend. The longer it takes to count ballots, the greater the potential for civil unrest and the results being decided by the courts.

The worst-case scenario is a constitutional crisis that not only divides the country even more, but damages global investor confidence in the U.S. and sets back the economic recovery. Bloomberg Opinion columnists have been covering this issue for months. Here is a sampling of what is at stake in a contested election and how it could play out: A Disputed Election Is Frighteningly Likely: The authors performed 100,000 simulations of every presidential election from 1988 through 2016, and found that the chances that the outcome turns on fewer than 10,000 votes in a single state is 4% under the Electoral College system but only 0.1% under a national popular vote. In other words, the chances that local election officials (or judges) can sway the national result by tossing (or including) a few thousand ballots are 40 times greater with the Electoral College. Think 4% isn’t much? Consider the study’s further conclusion that “the probability that the Electoral College is decided by 20,000 ballots or fewer in a single, pivotal state is greater than 1-in-10.” That’s right: There’s a 10% chance that the vote count in the state on which the national outcome turns will be that close. – Stephen L. Carter

Responding to a contested election, step by step:

What is relevant is an obscure law — the Electoral Count Act of 1887 — that was specifically designed to sort out post-election chaos. The ECA, as it is called, was a direct response to a genuine constitutional crisis in 1876, when Congress could not agree whether Samuel J. Tilden or Rutherford B. Hayes had won the presidential election. It created a bipartisan Electoral Commission to settle the matter. The commission was widely regarded as a disaster. As one member of Congress put it, “the political conscience is a flexible and elastic rule of action that readily yields to the slightest pressure of party exigencies.” The ECA was seen as a long-term solution that would prevail over partisanship. If we read the act carefully, we can make progress toward handling any chaos that might arise in 2020. – Cass Sunstein

Worried about a disputed election? Steel yourself:

Suppose that the governors in Michigan, Pennsylvania and Wisconsin have made a final determination that Biden won the popular vote. As a result, the states’ electors plan to vote for him. But what if Trump’s supporters in Congress argue that it’s all a fraud — and that the president actually won the three states? The text of the Electoral Count Act is frustratingly silent on what would happen in that case. The Senate debates about the issue at the time seemed to suggest that Congress could ignore a final determination by the states, if fraud was indeed involved. If so, Republicans could try to find a way to swing the election to Trump. And if that is right, then we could easily imagine real chaos in Washington. – Cass Sunstein

Markets are bad at handling contested elections:

It goes without saying that this would be bad for democracy. But it might also spell trouble for something more prosaic: the stock market. There have only been two times in the past 150 years when the presidential election was not brought to a swift, unambiguous conclusion. The first happened in 1876, in the race between Democrat Samuel Tilden and Republican Rutherford B. Hayes. The vote took place in early November, and while Tilden appeared to win, his lead consisted of a single electoral vote, with contested results in three states. The colossal mess that ensued wasn’t resolved until early March. In the meantime, overall stock prices declined approximately 10%, according to data first compiled by the economist Alfred Cowles. – Stephen Mihm

Trump’s threat to democracy threatens the economy:

If Trump either refuses to recognize the legitimacy of mail-in votes or uses a technicality of the electoral system to circumvent the will of the voters, it will represent at least a temporary cancellation of American democracy. The country may join the ranks of Turkey, Hungary, and other formerly democratic, quasi-authoritarian states. What effect will this have on the economy? Plenty of research shows political instability is correlated with lower future economic growth. Coup attempts in Sub-Saharan Africa, for example, tend to inhibit growth in the following years (interestingly, the effect is even worse when the coups fail). Coups that overthrow democratically elected leaders seem to be especially harmful. – Noah Smith

What if Trump plots tyranny, Republicans?:

Let’s be clear: Any attempt by Republican state legislators to appoint their own set of electors — the people who will actually select the next president in the electoral college — in defiance of their states’ voters after the Nov. 3 election would be a flat-out attack on constitutional government. If it succeeded in keeping a defeated president in office, it would replace the rule of law with partisan power. It would, as political scientist William Adler put it, be “the end of the republic.” This outlandish scenario now has to be taken seriously because Trump’s campaign and at least some swing-state Republicans are thinking about trying it, according to reporting from Barton Gellman in The Atlantic. – Jonathan Bernstein

Voter fraud simply isn’t a serious problem:

For years, Benjamin Ginsberg has been a go-to Republican election lawyer. By all accounts, he’s well respected on both sides. But Democrats certainly considered him a fierce competitor who was willing to push hard for his party even when, as they saw it, that meant disenfranchising legitimate voters. As political scientist Michael McDonald says, Ginsberg “would know best if widespread vote fraud existed since he led Republican Party efforts to find it for decades.” So it’s a pretty big deal that the recently retired Ginsberg has a new op-ed out shooting down Trump’s claims and his “inflammatory language.” – Jonathan Bernstein

A new justice won’t win Trump an election verdict:

It’s possible — just possible — to imagine Kavanaugh joining Roberts to cross party lines and save the court from the loss of legitimacy that would come with declaring Trump the winner in the aftermath of the confirmation of a new justice. Conservatives would be infuriated with him, which Kavanaugh would not enjoy. But liberals might end up having to rethink their attitude towards the justice, formed in the crucible of his confirmation hearing. That would help Kavanaugh’s judicial reputation over the long term. For liberal court watchers, the situation is dire. But it is not yet time to write off the Supreme Court. – Noah Feldman

Pennsylvania is the new Florida for vote lawsuits:

As I explained in an earlier column, Pennsylvania state law says that ballots can’t be counted if they are received after the polls close on Election Day. But the Pennsylvania Supreme Court, relying on the Pennsylvania Constitution, ruled that under current conditions created by the combination of COVID-19 and U.S. mail delays, the state must count ballots received for three days after the statutory deadline. When the U.S. Supreme Court was asked to review the Pennsylvania Supreme Court’s ruling, it split 4-4. That October 19 tie left the ruling in place. Neither side issued an explanation until October 26, when the justices gave their reasoning in a similar case pertaining to Wisconsin. – Noah Feldman

Bloomberg Opinion provides commentary on business, economics, politics, technology and markets.

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