On September 26th, at 9 p.m., Hillary Clinton and Donald Trump walked onto the stage at Hofstra University, in Hempstead, Long Island, for the first of three scheduled debates. That day was Clinton’s polling nadir. She had fallen, precipitously, from a nearly ninety per cent lock, as predicted by FiveThirtyEight, to a less than fifty-five per cent chance of winning the Presidency. Trump had the momentum. A cough or a slip—of the tongue or the foot—might have done Clinton in, and more than eighty million viewers, eager to see what would happen in this most unpredictable of elections, tuned in for the most-watched Presidential debate in history.
As it happens, that evening offered something of a perfect natural experiment into how the people who manage the world’s money view the two candidates. The economists Justin Wolfers and Eric Zitzewitz studied how investors around the world reacted, moment by moment, during a debate in which Trump came out strong and then collapsed. The results were clear: investors believe that Trump would make us considerably poorer and fill our lives with far more risk.
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