Election Results and Presidential Transitions

President Trump needs to cooperate with Mr. Biden’s transition team. Full stop.

President Trump does not need to show grace, although he should. He does not need to drop his legal challenges to election administration in selected states, although he should. He does not need to officially concede, although he should. But he does need to direct his presidential staff and agency principals to provide briefing materials, office space, and other assistance to Mr. Biden’s transition team. In kind, the media needs to accurately report administration transition preparations, not Trump tweets.

There is a difference between laws and norms. Both are important. Candidates conceding elections, showing grace, dropping challenges, and calling for unity are good norms that help make our republic more resilient. But none of those practices are law. Laws such as The Presidential Transition Act (PTA) provide a legal framework for continuity of operations. https://www.govinfo.gov/content/pkg/PLAW-114publ136/pdf/PLAW-114publ136.pdf

What is the current status of transition preparations? Back in April 2020, the Whitehouse directed agency personnel to prepare for an orderly transition. See Executive Order M-20-24. https://www.whitehouse.gov/wp-content/uploads/2020/04/M-20-24.pdf The executive order required compliance with the PTA with a deadline.

“Not later than September 15, 2020, and in accordance with subchapter III of chapter 33 of
title 5, United States Code, the head of each agency’ shall ensure that a succession plan
is in place for each senior non-career position in the agency.”

As a norm, the president should not challenge whether or not Mr. Biden is “an eligible candidate or president elect” within the meaning of the PTA. “(c)The terms ‘President-elect’ and ‘Vice-President-elect’ as used in this Act shall mean such persons as are the apparent successful candidates for the office of President and Vice President, respectively, as ascertained by the Administrator following the general elections held to determine the electors of President and Vice President in accordance with title 3, United States Code, sections 1 and 2.” https://www.law.cornell.edu/uscode/text/3/102

Readers interested in more detail are referred to CRS Report RL34722, coordinated by L. Elaine Halchin. https://fas.org/sgp/crs/misc/RL34722.pdf

Disastrous Transition – Hoover and FDR

Incumbent Herbert Hoover lost to Franklin Delano Roosevelt (FDR) in November 1932. Inauguration at that time was not until March 1933. FDR is generally given credit for gathering a range of experts in Warm Springs, Georgia to hit the ground running in March, such as this article in the Atlantic. https://www.theatlantic.com/magazine/archive/2019/03/fdr-herbert-hoover-big-government/580456/ What such articles often omit is that rumors of FDR’s intended policies roiled financial markets between November and March. Internationally, there was a run on the dollar because it was rumored that FDR would depreciate the value of the dollar. https://www.federalreservehistory.org/essays/banking_panics_1931_33 Domestic banks suffered a similar run both as domestic default rates soared and as their gold reserves were drained by worried counterparties. Upon taking office, FDR is credited with halting the crisis by declaring a bank holiday on March 6th.

But is it OK to ask if the panic subsided after March 6th because the system had already collapsed during the prior week? This is how the Federal Reserve characterizes the week prior to FDR’s inauguration.

“The Fed again raised discount rates and acceptance buying rates in February 1933, as it had during the fall of 1931, to help slow the drain on gold reserves. Interest rates rose across the board. But once again, the Fed did not increase its open market purchases significantly (Friedman and Schwartz 1963). In response to the large gold losses in New York, the Chicago Fed provided loans to the New York Fed on March 1 and 2, but refused the New York Fed’s request for another loan on March 3 out of concern for its own reserve ratio. The Federal Reserve Board then suspended the gold reserve requirement on March 3 (Wicker 1996). Rather than containing the panic, “The System itself shared in the panic that prevailed in New York” (Friedman and Schwartz 1963, 327), and even the Federal Reserve Banks were closed on March 4.”

Hoover and FDR did not cooperate between November and March while the financial system collapsed for the third time in four years. Accounts like those in the Atlantic believe Hoover intentionally undermined FDR in order to prepare for the 1936 election. What is absent from such reports is that FDR refused to cooperate with Hoover. FDR wanted Hoover to shorten the transition time by appointing FDR Secretary of State and resigning. https://www.newsweek.com/alter-what-obama-can-learn-fdrs-dodge-84987 Hoover criticized FDR’s rumored plans and wanted FDR to comment publicly because in Hoover’s view the run on the dollar and the bank runs resulted from lack faith in FDR’s commitment to the gold standard. Rather than take Hoover’s calls or make a public announcement, FDR responded that he believed that people were withdrawing from banks because they lacked faith in banks.

The Great Depression was already a disaster prior to the 1932 election. However, the presidential transition period saw the worst of the state bank failures and the international run on the dollar. One has to wonder if the transition off the gold standard could have been done with less financial collapse if Hoover and FDR had cooperated.

Lessons for Trump and Biden

Joe Biden has already signaled his willingness to cooperate. Donald Trump needs to cooperate with the Democratic transition team even if he defies other norms for concession, grace, and calls for unity. Presumably, the agencies began their preparations in April and executed the requirements of the PTA by September 15, 2020 pursuant to the Whitehouse’s executive order. President Trump can pursue his legal challenges (which I believe are doomed to fail) while preparing the new administration if (when) the challenges lose. Combative presidential transitions can make a bad situation worse. Year 2020 has been bad enough.