Political junkies and data nerds like me have been so wrapped up with who will win Iowa and what it will likely mean for the Democratic nomination that one very real scenario has been virtually ignored.

What if NO ONE wins in Iowa? Let me explain how this shocking outcome is a  real possibility (it’s happened twice before) and how that could throw the entire primary and 2020 presidential race into chaos.

“Uncommitted” Could Win the 2020 Iowa Caucuses

In the Iowa caucuses voters have to decide which candidate to support, and “uncommitted” is an option.

Iowans are notorious for making up their minds at the last minute. For example, in 2016 two weeks before the caucuses, 40% of voters said they were “undecided.” According to the Des Moines Register January 10th poll, 60% of prospective caucus-goers were undecided.

Most pundits focus on how this means the race is “wide open” between the top four candidates who are all within 11.5% of each other. The margin of error for most of those polls is 4% to 5%.

(Source: RCP)

However, here’s a surprising fact. “Uncommitted” is actually a choice voters have at the caucuses. As long as 15% or more of caucus-goers at a precinct decide to endorse no one, then “uncommitted” can win delegates.

In 1972 and 1976 “uncommitted” actually WON the Iowa caucus for those years.

Here’s why such a shocking outcome could throw the entire primary and 2020 Presidential race into chaos.

(Source: fivethirtyeight.com)

It’s now effectively a two-person race, at least using the most advanced statistical model we have to track the race in real-time. Biden has a 41% probability of getting 1,990 delegates and winning on the first ballot, Sanders 29%.

The probability gap between the two has been closing for several weeks now. Warren and Buttigieg, formerly strong contenders for winning the nomination, are now at 7% each. But note that “no one” is at 16%, more than double the probability of either Warren or Buttigieg.

If no one wins the nomination then it becomes a contested convention in July, in which no one might win on the first ballot. Then Super Delegates (16% of total delegates) get to vote on the second and subsequent ballots.

This scenario, which is far more likely this year than in most (due to such a crowded field) has important implications for Republicans as well.

According to Open Secret and FEC filings

Total Fundraising So Far

Including the candidates that are have dropped out thus far, 2020 presidential hopefuls have raised $624.4 million. Almost all of it has been spent, with the exception of Trump who has been stockpiling cash for the general election.

Trump is expected to have when combined with Super Pac money, a $1 billion war chest to fight the ultimate Democratic nominee. Normally the nominee is known by April or even March.

This time it’s possible that no candidate will have a majority of delegates and thus the final outcome won’t be known until July 13th or 14th when it’s decided on the second ballot at the convention. That would leave Trump with the option of either attacking both Biden and Sanders with negative ads for months and wasting a lot of resources OR holding his fire and unleashing $1 billion over just four months.

(Source: 270towin.com)

The six swing states that will likely decide the 2020 Presidential race have been stable for months now. Of those five states and Nebraska’s 2nd congressional district (NE and ME allocate electoral college votes by district, all other states winner take all), there are 13 ways they can break.

7 of those result in the Democrat winning, in 4 Trump wins, and 2 are a tie. Due to the 2020 House consensus forecasts, a tie is actually a likely Trump win. That’s because in the event of a tie the incoming House votes for the President, but each state gets one vote. Today 26/50 state delegations are in Republican hands and that isn’t expected to change for the next House.

Basically it’s going to be a very close race. In the five swing states for which we have Trump vs Biden and Trump vs Sanders polls, just two are outside the 5% margin of error.

• Biden leads Trump by 7% in the average of head-to-head polls
• Trump leads Sanders by 5% in Arizona

In most states, Biden does slightly better than Sanders (by about 2%) but it’s a statistical tie.

If Trump knows his adversary by March then his war chest might prove more effective, because he would have an extra four months to air negative ads and campaign in those key swing states.

BUT it might also be the case that launching a flood of political ads in those states over just four months might prove less or more effective. Voters might become so inundated with messaging over four months of wall-to-wall political ads that they tune out entirely.

This election is expected to see a record amount of campaign dollars spent so we have no precedent to go off. With the outcome of the election hinging on just five states and one congressional district, the outcome could be determined by the slimmest of margins.

In 2016 three midwest swing states (MI, WI, and PA) handed Trump the electoral college victory by a margin of 107K votes.

(Source: Washington Post)

In effect, just 0.09% of all votes cast in 2016’s presidential race actually mattered.

This time the margin of victory could prove similarly small, 1% or less.

That means that almost anything could tip the balance, such as not knowing the Democratic nominee until mid-July.

How Likely Is This Scenario?

Granted this is a hypothetical scenario that is NOT the most likely outcome. For example, based on the most recent polls as well as demographic information pertaining to Iowa’s congressional districts (where 27 out of 41 delegates will be awarded) here is how the Iowa race looks now.

(Source: fivethirtyeight.com)

Biden and Sanders are tied, with each having a 35% probability of winning the popular vote in the first election contest of the year.

In terms of all-important delegates, each has a 36% probability of winning the most delegates. Now, Iowa only has 41 total delegates so a 1 delegate lead coming out of that state won’t be important in a race with 3,979 delegates at stake.

BUT what matters to the media, and thus to the “momentum” meme that will follow all candidates into NH, NV, SC, and Super Tuesday is who wins, even by a nose.

Thus a 1% win by either candidate might be enough to tilt later states in a race where the probability of no one winning a majority of delegates is the highest its been since 1952, the last time we had a contested convention.

Or to put another way, in Iowa we might see history made, at least from the perspective of the modern political era.

What might decide Iowa?

• Trump impeachment is eating up 6/7 days of the week for Sanders, Warren/Klobuchar (who can’t visit Iowa except on Sundays for a few hours)
• Campaign spending on ads which have been at record concentration for months (thus could swing decisions in either direction, for or against a candidate)
• Buttigieg and Biden are the four leading candidates (in that state) who are visiting the most in a state where voters consider personal appearances very important

This is a highly complex race, as is the case with all sociological outcomes. Iowa might prove to be the deciding factor between a contested and uncontested convention in the most crowded political field in US history (at one point 28 candidates).

And in Iowa “uncommitted” is a very real possibility, that has won before, not just once, but twice.

.INX shares were trading at $328.11 per share on Wednesday afternoon, up $1.22 (+0.37%). Year-to-date, .INX has gained 1.94%, versus a % rise in the benchmark S&P 500 index during the same period.

About the Author: Adam Galas

Adam has spent years as a writer for The Motley Fool, Simply Safe Dividends, Seeking Alpha, and Dividend Sensei. His goal is to help people learn how to harness the power of dividend growth investing. Learn more about Adam’s background, along with links to his most recent articles. More...

More Resources for the Stocks in this Article