President Obama has been campaigning hard in recent days. He's told his supporters that he needs them to vote, in order to preserve his legacy. That's probably because Donald Trump has promised to undo almost every single significant policy initiative of the Obama Administration.
In recent polls, Obama's approval rating has soared up to 56%, highest since right after Osama was captured killed. One poll suggested that he would beat Trump by 12%, whereas the same poll gave Hillary Clinton just a 4% lead. (That 12% margin is something to think about when reading Scott Alexander's excellent post.)
I agree that a Trump victory would immediately impact Obama's "legacy" (I'm assuming the GOP holds the Senate, which seems likely if Trump wins.) And that's one reason why I don't think it will happen. I don't think most voters want that.
FWIW, I'm going to predict that Hillary will win by 5.13%, a bit more than the polls show (roughly 3.5%). That's because I believe that she now has the momentum, and that some undecided voters, as well as third party supporters, will drift her way in the end. For this reason, I expect her to win almost all of the swing states, except perhaps Ohio and Iowa. But this has been an unpredictable year, so a Trump victory still seems possible (Brexit parallel, etc.) Indeed the betting markets give him a 20% shot at it.
I believe people overrate the importance of who wins the Senate, but I expect a narrow Democratic victory, with the GOP holding the House. I expect that the Dems and GOP will make a few deals next year, on infrastructure, corporate taxes, the minimum wage and illegal immigration.
I also believe that people get way too stressed out by Presidential elections. The President is not some sort of father figure who towers over you---he's simply a public servant. He works for you, just like the person that cleans your swimming pool. You are his boss, not the other way around. I don't think either candidate views the Presidency that way, which is why I don't care for them, and plan to vote for Johnson. Too many people view the President as an elected king.
Some people will push back, saying that the election is "very important", as a lot is at stake. That's true, although perhaps less true than we imagine. But lots of things are very important. If I got depressed every time something tragic happened, say a tsunami that kills 100,000 people, then I'd have to be put in a mental institution. Yes, lots of awful things happen all the time, but it's healthier to adopt H.L. Mencken's attitude, and try to view the world as a crazy, colorful spectacle.
A year ago, I said the 2020 election would be a lot more important than this election. That's the election where the country has to decide which direction it wants to move, just as with the 1932 and 1980 elections. By that time the Great Stagnation will be a well understood fact, not a hypothesis. We'll be too far past the 2008 crisis to keep blaming slow growth on the housing/banking problems of 2008-09. That's the election where the public will have to make a decision as to whether to make a bold change and go for growth, or resign themselves to managing stagnation, and trying to smooth out the rough edges of the economy.
Since the blog focuses on issues related to liberty, it's worth noting that the Democratic challenger in the Wisconsin Senate race (Russ Feingold) was the only Senator to vote against the Patriot Act. He's in a close race. There are lots of issues where I don't agree with him, but that was a brave vote, which historians will look upon in much the way they now view the two Senators who voted against the Gulf of Tonkin Resolution in 1964 (another bill rammed through with dubious arguments.)
I wish we'd adopt the British system and have 5-week election campaigns. A year is too long.
The stock market futures reaction will be interesting to watch. It could be very strong, particularly if Trump wins (in which case stocks will fall). Once again, it would be nice to have a subsidized, highly liquid NGP futures market. But America doesn't seem capable of producing nice things anymore, at least in the public arena.