John Bruton

Opinions & Ideas

Category: US elections

PRESIDENT DONALD  TRUMP

donald-trump-1708433_1280There will be many explanations offered in the days to come for the surprise victory of Donald Trump. The United States is such a diverse country that it is hard to come up with a single or a simple explanation.

Trump was much more eloquent than Hillary Clinton. He came across as comfortable with himself, whereas Hillary Clinton appeared anxious at times.

He felt he could allow himself to be spontaneous, whereas she did not.

People listened to him, partly because they did not know what he was going to say next.  He did not worry about what the media described and “gaffes”, or worse. His electorate made allowances for him, because they felt he was authentic. Authenticity is very much in the eye of the beholder, and if people like what they hear, they will consider the speaker “authentic”.

But the Trump victory was about more than a livelier personality and better rhetoric.

My own sense is that it was primarily a cultural, rather than a narrowly economic, statement that the Trump supporters were making.

A majority of Americans are anxious about the pa
ce of change, and about the fact that the familiar world, in which they grew up,  is disappearing.  Americans felt that, by voting for Trump, they were taking back their own country. In a sense, they felt he would return them to an imagined past, in which they would be more comfortable.

Trump supporters no longer felt in full control of their future.  They felt that traditional institutions, like trade unions, could no longer protect them from the forces of automation and immigration, or allay their worries about the  affordability of entitlement programmes. These factors explain the Trump gains in states like Michigan, Wisconsin and Pennsylvania.

Donald Trump appealed to American nationalism, a nationalism that provides Americans with a sense of belonging and mutual security in an uncertain world. This nationalistic surge is not confined to America. English nationalism is behind the Brexit vote. Nationalism is likely to play a part in the French Presidential election, with potentially disastrous results for the European Union.

Trump’s victory also was a rebellion by those, who had not had the benefit of a college education, against being patronised, and told how to think, by those who had. This resentment has been aggravated by the prohibitive cost of college education in the United States, which has shut so many people out of the “American Dream”.

It is much harder to start poor, and become wealthy, in the United States today, than it was 50 years ago. Trump explicitly sought to appeal to this discontent. He was able to do this simply by repeatedly  attacking elites, but without putting forward specific policies that would increase social mobility.

Actually applying his policies will be the real challenge for Donald Trump as President.

If he implements 45% tariffs on imports from China and 35% on  Mexico, this will start a trade war. US corporations who have invested in supply chains involving these two countries will face major disruption. The likely abandonment of the Trans Pacific and Trans Atlantic trade and investment deals will slow the growth of world trade, which already has weakened by the slowing of the Chinese economy. This is bound to have negative effects on European exporting nations, like Germany.

He will not get Mexico to pay for the wall, so it may never be built.  The status of illegal immigrants in the United States will not improve, but I doubt if we will see mass deportations. The present situation is deeply unfair, and an affront to the rule of law, but it will probably continue.  

On the other hand, his commitment to invest heavily in the tired infrastructure of the United States will give a boost to global economic growth.

His tax cuts for richer Americans will not do much for growth because the better off people are, the more likely are they to save, rather than spend

He has the power to implement his policies. He will not have many excuses .He will not be able to blame a hostile Congress for blocking him, because Republicans have a majority in both Houses of Congress.

He promised the repeal, and replace, the Obama health insurance programme, which is proving to be more costly than expected. Repealing it will be easy, but replacing it will be really difficult.  

Whatever system of paying for healthcare is chosen, the costs seem to be rising inexorably. This is because people are living longer, and expecting, or are being recommended ever more complicated treatments.  I think this will be Donald Trump’s most difficult domestic policy challenge.

The most difficult thing to assess is President Trump’s foreign policy. Clearly he will be looking for allies of the United States to pay more for their own defence. But previous Presidents did the same. His trade policies will work against this. A trade war will weaken the ability of allies to pay more for their own defence.

In way, thanks to fracking and the increase it has made in US domestic energy supplies, the US is much more independent of the rest of the world than it used to be.  An early sign will come when President Trump has to decide of his policy on the war on Syria.  If he decides to ally himself with Putin, he will put himself on a collision course with Saudi Arabia. This could draw Turkey into the conflict because of its strong opposition to Assad.

Donald Trump has raised so many expectations that may be impossible for him to live up to them. Populism in power may not be as popular as populism on the campaign trail. Only if that happens, will the democratic world return to evidence based politics.

AFTER THE DEBATE….WHERE STANDS THE RACE?

US political partiesMost observers believe Hillary Clinton did better in the recent television debate than Donald Trump.

But not everybody did.

The Republican supporting “Washington Times” newspaper claimed that Trump did better because he focussed on America’s (perceived) global weakness, and  because he “projected authority”, and “appeared every bit the non politician”.

He did appear to me to me to be more spontaneous than Hillary Clinton, who sometimes appeared to have memorised her lines.

But the price of being spontaneous is that he said some things that were barely coherent , and  were sometimes inaccurate.

Given that the United States is a democracy governed by politicians, rather than by bureaucrats, it is worth reflecting on the preferred system of government of anyone who thinks being a “non politician “ is a plus.

In the 1920’s in parts of Europe, “anti politician” rhetoric like this was often a prelude to something much worse.

The Washington Times also argued that Clinton had not been asked the hard questions about her record as Secretary of State in the Obama Administration on

  • Libya,
  • the attempted “re set “ of relations with Russia and
  • the rise of China.

I think the intervention in Libya, although motivated by humanitarian concerns, may have led to even worse humanitarian results than non intervention, but that is hard to prove. Trump may bring that up in later debates.  Mrs Clinton support for the Iraq war ,as a US Senator, is not quite on the same level of responsibility, as Mr Trump’s alleged initial support for it as a private citizen, and she got away with pretending that it was

It is hard to argue that an attempt should not have been made to improve relations with Russia, although these have proved fruitless.

It is not clear what Mrs Clinton’s critics would have wished the Obama Administration to have done about the rise of China.  It did attempt to negotiate a Trans Pacific agreement to draw the rest of Asia closer to the US and away from China, but both Trump and Clinton now oppose that .

Trump’s plan to impose a 45% tariff on Chinese imports to the US would certainly slow China’s rise, but would hurt America too. That issue was not explored in the debate, which was a great pity. Mrs Clinton seemed to be more interested in Mr Trump’s business past, than in his potential future trade policies.

The race will be fought in a few battleground states.

To win the Electoral College, Trump must win all four of the following states

  • Florida (where he is 0.5 points behind in the latest polls),
  • Pennsylvania (where he is 1.8 points behind),
  • North Carolina (where he is 0.8 points ahead), and
  • Ohio (where he is a more comfortable 2 points ahead)

He needs a major win in the debates to achieve this, and so far he has  not achieved that.

THE US PRESIDENTIAL ELECTION

US political partiesI am in the United States this week, and finding out how people here feel about the Presidential Election.

Although the candidates have been selected through a primary process, in which the voters themselves have had the final word, they now find themselves deeply dissatisfied with the choice they have given themselves.

Everybody is looking to the debate on Monday night, as a signal for the momentum of the campaign.

The debate may enable Hillary Clinton to re establish the lead she won after the Conventions. Or it may confirm the more recent trend, of increasing support for Donald Trump.

One influential person told me he thought more Americans will be watching the debate than have ever watched any event on television before.

In past Presidential Elections, the first debate has also had a disproportionate influence.

Under the Electoral College system, a narrow win in the popular vote can gain all the electors of that state for the winning candidate. The margin of victory does not matter. The winner takes all. Because of the way her support is spread throughout the country, this system gives Hillary Clinton the advantage.

The system means that the candidates will tend to focus their appeal to certain “swing” states. One seasoned observer said to me that the election comes down to just four swing states, Pennsylvania, Ohio, Florida and North Carolina. He said that, to get a majority in the Electoral College, Hillary Clinton just needs to win one of these swing states, whereas Donald Trump must win all four of them.

As a European, I have found the depth of the hostility, in some quarters, to Hillary Clinton surprising. Concrete evidence of specific wrongful acts is absent. But the negative feelings towards her are very strong. Her own campaign advertising against Trump is itself very negative, which feeds this.

In the case of Donald Trump, it is his personality, rather than his policies, that attract attention.

 His policies include

  • Imposing 35% tariff on imports from Mexico
  • Imposing a 45% tariff on imports from China
  • Ending the trade agreement with South Korea
  • Considering US withdrawal from the World Trade Organisation

These trade policies of Donald Trump are a radical departure from the traditional policies of the Republican Party.

They have been analysed by the Petersen Institute for International Economics (PIIE) in Washington DC, who say that , if implemented,  they would ignite a trade war, because retaliatory tariffs would be imposed on US exports.

They say that, if elected, President Trump could implement these policies even without the approval of Congress.

PIEE have calculated which states within the US would lose most from the trade war a victorious President Trump might initiate. Washington State, home of Boeing, tops the list, with a loss of 5% of all jobs. Other big losers would include California, Connecticut, and Illinois.

But two “must win” states for Trump, Pennsylvania and Texas, also stand to lose more jobs than most, if his policies lead to a trade war.

Support for Donald Trump, and for his anti trade policies, derive from an instinct that many Americans have, that globalisation (the free movement of foods, services and money around the world) is reducing their personal job security, and rendering their skills redundant.

 In the 1990’s, when world trade was growing at 5% a year, and everyone’s income was rising, Americans were willing to put up with the disruption and uncertainty brought by the opening up of markets.

 Now, with the emergency caused by the banking crisis receding, and world trade growing at only 2%, more people are willing to take the risk of voting for a radical anti trade candidate, like Donald Trump.

A similar willingness to take big risks, to make a point, was evident in the 52% vote for Brexit in the UK.

Donald Trump’s policy of making the allies of the US pay more for their own defence also strikes a chord with many Americans. While he wants to “make America Great again”, Trump does not believe the US should pay, as much as it does at present, for other countries’ defence. This explains why some East European countries are pressing for the EU to take a bigger role in defence. Ireland, as an EU member, will have to take account of these trends.

Trump, who is spending a lot less on his campaign than Clinton is, is also tapping into a dissatisfaction among voters with the disproportionate role that money and fundraising play in US politics. From the moment he or she is elected, a new member of Congress must spent three times as much time, every day, on the phone, raising money for the next election, as  he or she does on legislative business or in meeting ordinary constituents.

All this explains why this is an angry election, on both sides of the divide.

WHAT TRUMP, SANDERS AND OTHER POPULISTS ARE NOT TELLING YOU ABOUT GLOBAL ECONOMICS

globalThe integration of the global economy is under threat. Not only is the UK considering leaving the EU, but all four US presidential candidates want to renounce President Barack Obama’s Pacific trade deal. Borders within the EU are being closed, and Donald Trump even wants to build a wall between the US and Mexico.

Meanwhile, political parties have become empty shells, unable to sustain support for long-term policies through more than one election. This is evident all over Europe, including in Ireland.

These two factors are linked.

The globalisation of the economy is at risk because its benefits have not been understood or explained clearly enough, or shared widely enough.

Globalisation happened because once capital controls were removed, capital could flow freely from one country to another. Trade barriers, quotas and tariffs were reduced or eliminated.

Advances in information technology have empowered consumers everywhere, including in the poorest and most remote parts of the world. ‘Containerisation’ enabled goods to be transported more cheaply over long distances. In terms of the number of hours one had to work to afford them, food, clothes and consumer goods became much easier for ordinary people to afford.

Political developments accelerated the process. The entry of China into the World Trade Organisation (WTO), and the gradual opening up of the Indian economy, have meant that the global capitalist economy that, in 1990, was the preserve of about one billion people in the developed world, is now open to at least four billion or more people. China’s economy is six times as large as it was 30 years ago. Competition for work has become intense. In many senses, there is now an over-supply of available labour to produce the goods and services that cautious and indebted consumers are willing to pay for.

This explains why, in the developed world, we have a low or zero inflation rate, but also high levels of unemployment.

It also explains why, while in the developing world millions of people have been rescued from extreme poverty by globalisation, in the developed world, perceived living standards are stagnating. Cash may buy more, but hourly cash incomes have not risen.

In countries with high levels of legal protection of existing jobs, like France and Spain, the burden is falling on the young, who cannot find work at all, while older workers hold onto their jobs.

In countries with less job protection, the burden is falling on older workers who have seen their incomes stagnate, as young people are recruited to replace them at lower salaries. Males in the US with only a high-school level of education have seen their incomes fall in real terms since 1970.

Globalisation is being abused by some tax avoiders. Rent seekers are capturing too much of its benefits for themselves, because of inadequate competition or undue regulatory protection.

Meanwhile, technological change is putting many existing jobs at risk, and accentuating inequality of incomes between insiders and outsiders. In the future, drivers may be replaced by driverless cars and textile workers by robots, just as dockworkers were replaced by containerisation, and filing clerks by computers.

I heard an experienced American business leader claim at a conference recently that the extra value, to his or her employer, of a really top software engineer over a merely adequate one was 500 to one, whereas the comparable difference between a top accountant and an adequate one was only two to one. The resultant competition for the top talent is one of the factors increasing income inequality.

At the other end of the income scale, people with low skills are falling further and further behind when forced to compete with goods or people coming from lower-cost countries. Immigration and imports have the same political effect.

These realities explain the support for Trump and Bernie Sanders in the US, but also the support for Podemos, UKIP, and the National Front in Spain, the UK, and France respectively.

There is a naive desire to turn back the clock, economically speaking, to the simpler world that existed before 1990, when the global capitalist economy was in the hands of the one billion people in the “West”, rather than of the four billion or more that are now able to compete in it.

The advocates of this reversal of history are not explaining what it would cost.

It could only be done by the closing in of national economies. It would require the reimposition by Western countries of high tariffs and quotas and restrictions on people’s ability to move their money to other jurisdictions. The result would be a dramatic rise in the cost of consumer goods in the developed world, and a fall in living standards in both the developing and developed world. This is the logical destination of the trade policies of Trump, Sanders, UKIP , the National Front and the Trotskyite Left.

Superficially attractive, but dangerous, policies like these are gaining support because structural factors within technology are undermining disciplined political parties, which were, in the past, the means of mobilising public opinion, and of maintaining support for more considered and realistic policies.

Twitter lends itself to the expression of strong emotion, but not to the careful explanation of a policy platform. The anonymity of the blogosphere has replaced dialogue with diatribe. Opinion is polarised. Anger becomes a policy.

Information is so plentiful now that people must be more selective in what they read, but their selections reinforce their existing views rather than question them. Society is becoming a series of self-enclosing and polarised information communities, which do not listen to one another.

This atomisation of society means that voters think increasingly as consumers rather than citizens, picking the candidates they “like” in a personal capacity, rather than the ones that have a programme that will work for the whole of society.

Ideological politics is being replaced by identity politics. This is why global economic integration is under threat. Political institutions are not strong enough to explain, manage and control global economic and technological forces.

This is the challenge facing the European Union. The EU must show the public that it can regain control of globalisation so as to preserve all its benefits, while curbing its abuses.

John Bruton is a former Taoiseach and leader of Fine Gael

Published at Irish Independent

THE US PRESIDENTIAL CONTEST…….BIG NEWS FROM IOWA?

US political parties
The news that Senator Ted Cruz, the Texas Senator, is beating Donald Trump by 10 percentage points in the latest polls in Iowa, increases the possibility that he will be the eventual Republican nominee.
 
Iowa will host the first contest of the Primary season. It will be followed by New Hampshire where Trump still leads the Republican field by a large margin.
 
Also according to the latest research, Cruz would be 2.5 percentage points behind Hillary Clinton is a General Election contest confined to the  two of them, and probably further behind if Donald Trump were to enter the race as a third party candidate. Trump would be even further behind Clinton in a two candidate race.
 
The  potential Republican Presidential candidate  most likely to beat Hillary Clinton is a head to head is Ben Carson, and that is by just 0.4 percentage points over a range of polls.
 
Senator Rubio of Florida has also been ahead of her in some polls.
 
Jeb Bush would lose to her but by a narrower margin than most of his Republican rivals, but the early primaries are not ones in which he can be expected to do well.
 
Cruz has a poor record of working with fellow Senators and some Republican leaders have suggested they might not even vote for him in November.
 
He gave a speech in the Heritage Foundation recently which sets out his foreign policy approach.
 
He wants to build a wall between the US and Mexico, and raised the spectre of “terrorists swimming across the Rio Grande”. He says that 40% of illegal immigrants in the US are visa overstays.
 
He says the US needs “moral clarity” in it foreign policy. “That starts with defining our enemy” he claims. 
 
This is a mistaken view. Moral clarity, I would argue, starts by defining one’s OWN values rather than by defining ones enemy. But defining one own values is much harder work, than is picking an enemy.
 
He argues for a foreign policy based on pursuit of America’s interests, and against making democracy promotion a central goal. He is thus critical of US support for regime change in Egypt, Libya and Syria. “We do not have a side in the Syrian Civil War” he states frankly.
 
In many ways Ted Cruz is appealing to the same core views as Donald Trump. Both are addressing anxieties among the American middle class that America’s standing in the world, both materially and psychologically, has diminished.  
 
It is something that is important to them, and goes to the heart of their identity. This sense of decline is accentuated by the fact that middle class incomes in the US have stagnated, while the top tier of society has gained.
 
Hillary Clinton would like to address this question, but many of her financial backers would lose if she did so. While she is well ahead in most Democratic contests, she could lose to Bernie Sanders in New Hampshire. Sanders is from the neighbouring state of Vermont. 
 
She also has to cope with the conclusion of the FBI investigation into her use of a private email for State department business.  Disclosure of classified information to outsiders would be a serious matter if it is found to have occurred, inadvertently or otherwise. Evidence of any subsequent attempt to cover up mistakes would also be a big problem.
 
One has the sense, at this stage, that the Presidential Election next November  will not settle things, and the United States will remain deeply divided, with at least  one house of the Congress continuing to resist the President of the day.

HAS MITT ROMNEY ANY CHANCE OF BEATING PRESIDENT OBAMA?

The latest national opinion polls show Mitt Romney running neck and neck with President Obama in the election to take place next November.  On the face of it, that should put him in with a very good chance.

But the election is not won in a single, one person one vote, national election, but on a state by state basis, by accumulating electors in the Electoral College.  Not all States allocate Electoral College votes in the same way. Some do it on a “winner takes all” basis, and some do it proportionately to the number of votes the contenders got in the state.   
The Real Clear Politics website attempts to predict how the Electoral College votes will break down. 

Their analysis can be found at

http://www.realclearpolitics.com/epolls/2012/president/2012_elections_electoral_college_map.html –

According to their analysis, Barrack Obama starts with   227 Electoral College votes in states that are most likely to give him a majority, and he needs to get to 270 to win.
Mitt Romney starts with only 170 Electoral College votes in states most likely to give him the majority. So he has to win more of the states that could go either way, which are
  • Arizona (11 electoral college votes),
  • Colorado (9 votes),
  • Florida (29),
  • Iowa (6),
  • Michigan (16),
  • Missouri (10),
  • New Hampshire (4),
  • North Carolina (15),
  • Ohio (18),
  • Virginia (13), and
  • Wisconsin (10).


These are the eleven states where the big money will be spent, and where television viewers will be bombarded with advertisements for and against the two candidates.
Of these eleven swing states, John McCain only won only two in 2008, namely Arizona and Missouri.  So he lost the election.

In contrast, George Bush won those two, but also won Colorado, Florida, Iowa, Virginia and North Carolina, and that was enough to give him victory in the Electoral College over John Kerry.

The really big prize on this list is Florida, with 29 votes.  Mitt Romney will be tempted strongly to pick  someone from Florida as his running mate. Senator Marco Rubio, a man of Cuban American heritage, is a strong contender.  As an Hispanic, he may also have a wider appeal, but the anti immigrant rhetoric of many Republican spokespeople will mitigate this.
 Ohio has 18 votes, and Senator Rob Portman, if chosen as vice Presidential nominee, would probably bring Ohio in behind Romney, and he has more governmental experience than Senator Rubio .

Mitt Romney himself is a native of Michigan, which should help him there.
Virginia has traditionally been a safe Republican state, in common with almost all states of the Old Confederacy.  But, like North Carolina, it has been recently trending Democratic.
As in all elections, turnout will be vital. The huge turnout of African Americans, and young people, for Obama in 2008 will be hard to repeat.  On the other hand, Mitt Romney lacks some of the deep patriotic, and non partisan appeal of John Mc Cain.

The economy will be the crucial campaign issue. The US economy seems to be improving, but that recovery may not be evenly spread. Mitt Romney will probably focus most effort in the swing states  where the economy is doing less well. 
At the end of the day, it will all come down to where those 11 states, and how their 141 Electoral College votes, go.

Other things being equal, if Mitt Romney can win Florida, Ohio, Colorado, Arizona,  Missouri, North Carolina and Michigan, he will be President. Winning both Florida and Ohio at the same time will be his biggest task. Michigan  will also be very difficult.

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