Why Brexit could be a warning for American voters, Trump and Clinton

Brexit could be a warning for American voters

On paper, the differences between the U.S. presidential election and the U.K.'s vote to leave European Union couldn't be more pronounced. However, analysts warn that the two events have many of the same parallels and pitfalls.

Back in June, the U.K. shocked the world (and itself) by voting by 52 percent to 48 percent to leave the EU, contradicting most opinion polls and pundits who had largely predicted a last-minute yet comfortable win for the "remain" camp.

The result was such a surprise that even those who voted to leave the 28-country economic and political bloc expressed their shock at the result. Some even expressed remorse, saying that their vote had only intended to be a "protest" against the EU, rather than a desire to see the U.K. throw away decades of intricate, complex and largely cordial relations with its continental neighbors.

In the days and weeks of soul-searching that followed the vote, commentators noted that, with hindsight, those in power — the so-called "metropolitan elite" — and urban citizens had grossly underestimated the strength of public sentiment.

Whether the EU deserved such treatment or not, the vote demonstrated that the powerful ignore the masses and the power of populism at their peril.

This could have echoes for the Nov. 8 presidential election, where we're seeing a member of the U.S. political establishment, Hillary Clinton, being challenged for the leadership by outspoken populist and politically incorrect Donald Trump.

Watch polls closely

Like the Brexit vote, there is potential for the presidential vote to surprise and shock. Opinion polls in the last two weeks have shown that Clinton's lead in the polls has been eroded and that Trump could have overtaken her.

"Through the past fortnight, which includes Clinton's "basket of deplorables" comment and semicollapse at a 9/11 memorial event, these trends continued — to the point where Clinton's lead nationally in the RCP (RealClearPolitics) average is now a mere 1.5 percentage points, i.e. well within statistical margin for error," Alastair Newton, founder of Alavan Business Advisory, said in a note this weekend entitled "Teflon Trump gains more traction."

"Perhaps even more critically, Trump has pulled marginally ahead of Clinton in two of my three critical swing states, ie Florida and Ohio; and he appears to be nibbling away at her (admittedly still healthy) lead in the third, Pennsylvania," said Newton, a former political analyst at Nomura.

Voter intentions

Political analysts at Citi led by the bank's Chief Global Political Analyst Tina Fordham said in a note on Sunday that the narrowing of the polls at this stage of the campaign was "typical" yet she warned that Clinton could suffer from what she called an "enthusiasm gap."

Despite having a loyal following of Democratic voters, Clinton does not enjoy the broad appeal of her former boss, President Barack Obama, and she could suffer from apathy among voters who might lean toward a Democratic vote but aren't overly enthusiastic about Clinton herself.

Meanwhile, as divisive as Trump is for American voters, he has a robust following certain to make their dissatisfaction with the political status quo known come November.

Fordham and her colleagues, Graham Bishop, Jeremy Hale, Tiia Lehto and Dana Peterson, said in their "U.S. election countdown" note that Trump voters were "significantly more likely to say they intend to vote."

"Narrowing of polls is typical of this stage of the campaign, yet in the wake of Brexit and heightened Vox Populi risk in Advanced Economies plus concerns that polling methods may not capture marginalized voters, we reduce the probability of a Clinton victory to 60 percent from 65 percent, with a 40 percent probability of a Trump win. Hillary Clinton still has a much more mathematically straightforward path to victory in the Electoral College vote, but suffers from an "enthusiasm gap" that may affect support at the polls on November 8th, with Trump voters significantly more likely to say they intend to vote."

The Citi team also highlighted "a range of sub-indicators historically correlated with predicting presidential outcomes. Improvements in the economy, Obama's approval ratings and support from college-educated voters support Clinton, while voters with low trust in the political system and confidence in the U.S. economy support Trump."

Underestimate populism at your peril

Similarly to the slow lead up to the Brexit vote, a public inclination toward politicians who appeal to the populist vote and refuse to be politically incorrect characterizes both the U.K. "independence" debate and U.S. presidential campaign, with Trump being unafraid to offend swathes of voters, notably women, Muslims and Mexicans.

The noise that has surrounded Trump during his presidential campaign has meant that he has been in the public eye most of the time — with good or bad publicity meaning more media exposure for his key voter pledge to champion American interests above relations with the wider world.

Despite Trump's polarizing and controversial statements, many Americans are looking for such a charismatic leader who they really believe can "make America great again" in a world of shifting geopolitical allegiances and economic powers.

To a lesser extent but in a similar vein, UKIP leader Nigel Farage caught the media's attention for his often controversial and politically incorrect statements, although even he decried Trump's call for all Muslims to be banned from entering the U.S.

"What is clear is that Trump is continuing to dominate the media one way or the other," Alavan's Newton noted. "There are some clear parallels with Brexit, in my view, where the economic arguments were outweighed by concern among voters over immigration, globalization etc coupled with a general fed-uppedness with the 'political elite.'"

Newton noted that Clinton might "have the edge" in terms of policy while Trump has often been accused of being thin on policy details and vague on strategy, but as the Brexit vote shows — with its leading campaigners slowly disavowing their Brexit pledges and promises over the last few months — the details often don't matter once the winner is announced.

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