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      Trump's hopes fade in Wisconsin as 'greatest economy' boast unravels

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      Coarse, cruel, chaotic. Donald Trump has been called a lot of things. Even some of his supporters have had a hard time embracing the darker aspects of his personality. Until recently they have, however, trusted the president on one one vital issue: the economy.But with just 16 days to go until the election, there are clear signs that Trump’s claims to have created the “greatest economy we’ve ever had in the history of our country” are unravelling.Perhaps nowhere is that more worrying for Trump than in Wisconsin.Losing Wisconsin ended Hillary Clinton’s presidential chances in 2016. Famously she didn’t campaign there, presuming a win that was snatched from her by Trump’s promises to end unfair trade practices that had hurt the state’s dairy industry and to bring back manufacturing jobs.Until February, Trump could have confidently boasted that he had made good on his promises. Unemployment had fallen to record lows in the state, manufacturing was coming back – albeit at the same, snail-paced crawl that it had under Obama. The headline figures looked good. Then came the coronavirus – a disease that is now ravaging the state and has, in its wake, exposed the fault lines beneath those headline figures.The virus and the economy now seem to have morphed into some hideous hybrid, and the fragile recovery that followed the first peak in infections is now being threatened by new spikes in infections. Last week Wisconsin reported 3,747 cases in one day, its highest level since the outbreak, and more than California’s daily average, a state with six times Wisconsin’s 5.8 million population.“The economy is always big. It’s just this year it is so intertwined with the pandemic that is hard to separate them,” said Mark Graul, a Republican strategist who ran George W Bush’s re-election race in Wisconsin in 2004.Had the pandemic never happened and the economy been humming along, “that’s all President Trump would be talking about” – but now all anyone is talking about is the virus and what it is doing to the economy.A recent CNN poll found Trump and his rival, former vice-president Joe Biden, tied among registered voters at 49% apiece on who would handle the economy better. Back in May, 54% of registered voters said Trump would handle the economy better, compared with 42% for Biden.Graul expects a close race. Trump beat Clinton in Wisconsin by just 0.77% in 2016. The polls currently have Biden ahead by a clear 6.5% in the state, but in a year that feels like no other anything can happen between now and 3 November.In this volatile environment, progressives have been making gains with voters, reflecting on the fragility of the economy Trump had hoped would re-elect him.Earlier this month, the advocacy group Opportunity Wisconsin held a town hall with Wisconsinites from around that state, who talked about how they see Trump’s economy. It wasn’t a pretty picture.For an hour on Zoom, the Democratic senator Tammy Baldwin led a discussion with dairy farmers and cheese makers talking about friends and neighbors going out of business even before the pandemic began. University of Wisconsin history professor Selika Ducksworth-Lawton spoke powerfully about how the virus has devastated communities of color in the state. “For marginalized communities, this has been awful. There have been some people who have referred to it almost as an ethnic cleansing,” she said. “We have failed at the most basic requirements of a nation state.”But perhaps the clearest example of the problems that preceded the pandemic, and have been sadly highlighted by it, came from Kyra Swenson, an early childhood educator from Madison. “I’m a teacher, I’m not a business owner. I don’t have a lot of wealth. It’s just me and my husband trying to make life swing for ourselves and our two kids,” said Swenson.Even before the pandemic, she said she felt she was getting very little help. Early childhood educators make about $10 an hour in Wisconsin and receive no benefits. “We don’t get a retirement account. We don’t give two hoots about what Wall Street is doing. We are not investing in that. We are trying to pay our rent, pay for food.”A third of Wisconsin’s early childhood educators are on federal assistance “because that is how hard it is for us to make it.”Trump’s biggest policy achievement – a $1.5tn tax cut that was billed as a “middle-class miracle” – actually increased her family’s taxes, she said. “It didn’t benefit us. That’s the reality.”And the Trump administration’s response to the pandemic has been “terrifying”, she said. She thinks it is no coincidence that Wisconsin’s rates have spiked since children and college students went back to school – a move that came after Trump said children could not spread the coronavirus, an opinion that has been widely debunked. “It didn’t have to be this bad,” she said.Changing mindsOpportunity Wisconsin, aided by the progressive advocacy organization the Hub Project, has had remarkable success turning opinion around on Trump’s economic success through targeted messaging. But it has had big obstacles to overcome, not just because changing opinions is notoriously hard.The Republicans have been remarkably successful in their economic messaging, not least in Wisconsin. Since Ronald Reagan, the Republican party has promulgated the idea that there is a simple formula for economic success: lower taxes, less regulation and smaller government. That message, repeated over and over for 40 years, helped Wisconsin shift from a bastion of progressive politics to a union-bashing laboratory for rightwing economic experiments led by Scott Walker, the former governor, and Paul Ryan, the former House speaker, and backed by the Koch brothers. More

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      in US Politics

      Stock Market America is booming. So is Unemployment America | Lloyd Green

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      The chasm between the two Americas – “Unemployment America” and “Stock Market America” – made starkly visible this spring, has not disappeared. Instead, the divide has widened.America’s stock indexes have weathered the pandemic; the country’s job markets less so. On Thursday, the labor department reported nearly 900,000 new unemployment claims and Columbia University announced that 8 million Americans had fallen into poverty since May.Meanwhile, the number of Covid-19 cases continues to climb, the Affordable Care Act stands in legal jeopardy, and Amy Coney Barrett, the president’s latest pick for the supreme court, will not tell us if she believes that Medicare and social security pass constitutional muster. The New Deal may yet be undone.On that score, language that soothed the White House and Republicans may come back to haunt them at the ballot box. According to polls, older voters are prepared to vote for Joe Biden, a Democrat, in a marked departure from elections past.Donald Trump, not to mention many Republicans in Congress, do not seem to understand that for millions of older Americans, social security and Medicare are not nice-to-haves or cushy benefits handed out at the benevolent whims of the state. Rather, they are the earned benefits of a lifetime of work. According to US government data, social security benefits constitute about one-third of the income of the elderly, and for many even more.According to the New York Times, in February, at the same time that the Trump administration was declaring that the virus was not a big deal, the president’s top advisers tipped off the gods of the markets and the Republican donor base that the outbreak would be worse than the administration was saying publicly. Trump and his minions acted as if they believed the public could not handle the truth even as Wall Street dumped its holdings.Against that backdrop, preserving healthcare and retirement is the least they can do. But we know they won’t. Both the president and Mitch McConnell, the Senate majority leader, have spoken openly of cutting or “adjusting” entitlements. Then again, McConnell laughs about the failure of Congress to deliver Covid relief.On the campaign trail, the populist rhetoric of Trump’s 2016 campaign has given way, in 2020, to self-pity and personal resentments. The president wants us to feel his pain even as it appears that he is incapable of feeling ours. His relationship with his core supporters grows ever more asymmetric.When Trump’s refusal to wear a mask in public is taken as a sign of defiant courage, the body politic is certainly ailing. Half of Americans view their personal situations as better than they were four years ago. At the same time, however, nearly three in five voters see the country as being in worse shape than at the outset of the Trump presidency.When Trump’s refusal to wear a mask in public is taken as a sign of courage, the body politic is ailingWith nearly 220,000 people dead from the disease, the state of the Union is definitely hurting. The much touted “V”-shaped recovery is slow in coming, if it ever arrives.Don’t look to election day to bind the nation’s wounds. The realities that led to Trump’s electoral college upset are still with us.The gaps between the rural US, white evangelicals, white voters without college degrees and the rest of the country have not disappeared. Military suicides are up by a fifth and death by opioids has returned. Beyond that, the issue of immigration retains its potency.True, the president may have given his base a sense of calm but the causes of grievance have not gone away. What David Brooks once described as an idyllic urban existence, Bobos in Paradise, appears to have turned into a hell for everyone else. Expect Trumpism to live on, regardless of what happens on 3 November and the days that follow.A definitive Biden victory stands to provide the US with a president whose political legitimacy is less open to question or attack. Unlike George W Bush in 2004 or the incumbent, a Biden win would likely be accompanied by a majority of the popular vote.Beyond that, Biden does not carry Clinton-era baggage. The former vice-president is not a child of 1960. Likewise, no one has ever seriously accused the reflexively centrist “man from Scranton” of being a radical. Together, that would help lower the temperature for a bit, anyway, and that counts.The two Americas will not disappear any time soon. At most, we can at least hope for some civility, and God knows we can use it. More

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      in World Politics

      The Next President Needs to Learn From Past Mistakes

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      Thirteen years ago, in summer 2007, I wrote a memo for the future president of the United States. The one who would take office in 2020.

      At the time, I had no idea who would win the 2008 presidential election, much less an election in the distant future. In summer 2007, Hillary Clinton was the Democratic frontrunner, ahead of second-place Barack Obama by as much as double digits. Rudy Giuliani was on top of the polls for the Republican Party, with John McCain trailing behind him. I figured, wrongly, that it would stay that way.

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      One year later, in summer 2008, both Obama and McCain would come from behind to secure their parties’ nomination. And I would predict in a TomDispatch piece that Obama would win the election, serve two terms and leave the US in a perilous place in 2016 because of his policies of “muddling through.” Well, I got that part right.

      But in summer 2007, all I could focus on was the relative decline of the United States, as seen with “2020 hindsight.” The subprime mortgage crisis was unspooling that summer, the Bush administration was still sending more US troops to Iraq as part of its “surge” and the Chinese economy was growing by 14.2%.

      Casting my mind 13 years into the future, I tried to imagine which of these three factors — Iraq, financial crisis, China — would prove most salient in explaining the downward trajectory of US standing in the world.

      Here’s what I wrote back in 2007.

      Memo to the President 2020

      “As a member of the transition team, I’ve been asked to give a backgrounder on the ‘loss of global influence’ issue that played such a major role in the last election. I’ve submitted my study entitled End of Empire and I would encourage you to read my full analysis. I’ve been told that you might not have the time to read all three volumes. As a historian, I find it extraordinarily difficult to boil this question down to 750 words. But I will try. 

      Historians are divided into roughly three camps on the causes behind the end of the unipolar system headed by our country. The largest camp is the Iraq Syndrome group. They argue that the U.S. decision to invade Iraq in 2003 was the critical, history-changing moment. As you well know, the invasion turned into an unsuccessful 10-year occupation that sapped the U.S. economy and significantly eroded U.S. reputation in the world. More damaging, however, was the syndrome that followed the war. The unpopularity of the war made it increasingly difficult for the United States to launch military operations and virtually impossible to solicit international support. Although the Democrats tried to maintain high military budgets through 2010, they ultimately had to make significant cuts in order to salvage the economy. 

      Embed from Getty Images

      The second camp is generally called the China Rising group. These historians, influenced by the world-systems work of Wallerstein, locate the end of U.S. influence in shifting geopolitical power and particularly the growing influence of China. As of February 2019, the Chinese economy is now larger than ours, though we still maintain a lead in per-capita GNP. More importantly, China’s turn toward multilateralism in the early part of this century caught us by surprise. The transformation of the Shanghai Cooperation Organization (SCO) into the premier international security mechanism, with its own peacekeeping forces and development bank, undercut both NATO and traditional U.S. bilateral alliances. When the EU became a member of the SCO in 2014, the transatlantic alliance was effectively over. 

      The Iraq Syndrome and the China Rising arguments are familiar and persuasive. But I do not believe that they fully explain our fall. The third camp, to which I belong, is called the Subprime group. Although we are currently considered revisionist historians, I believe that my End of Empire books definitively establish that the financial crisis that the United States experienced in 2007 was the key element in destroying our position in the world. 

      As you might remember, the United States experienced a significant housing bubble beginning in 2001. Americans became obsessed with buying houses, and selling houses. The banks devised a way of lending money to people who ordinarily would not have enough credit to buy a house. This was called the sub-prime loan. Without going into the details — please see Chapters 2-8 in Volume One of End of Empire — I will simply remind you of the rising number of foreclosures in the summer of 2007, the bankruptcy of lenders, the failure of hedge funds, the collapse of retail, the devaluation of the dollar, and the coordinated global bank interventions that turned out to be only a stopgap measure. 

      At the time, U.S. economists predicted that the housing market would recover by 2009. That didn’t happen. The subprime crisis revealed not only the underlying fragility of the domestic U.S. economy but the global economy as well. It is a common fallacy to draw parallels between household economics and the functioning of the national economy. However, in this case, I have argued that the parallel did apply. Average Americans, with their large amounts of debt, had to give up their prized possessions, that cornerstone of the American dream, the house. So, too, did the United States, with its nearly $9 trillion national debt, have to give up its global position, its “house” so to speak. 

      Historians in the two other camps overlook this simple and rather elegant explanation. Yes, the Iraq War was a tremendous drain on U.S. resources and thus a classic case of imperial overstretch. Yes, China played the multilateral card at just the right time and thereby built an international reputation. But it was a handful of greedy mortgage lenders that served as the catalyst. The market correction that followed the subprime crisis in fact turned out to be a much larger geopolitical correction that restored a certain balance to international affairs. Finally, with 2020 hindsight — to use this year’s most popular catch phrase — we can see that Iraq and China pale in comparison to the cold, hard bottom line. As you repeatedly said on the campaign trail, quoting one of last century’s most enduring lines, ‘It’s the economy, stupid.’” 

      Fact-Checking the Memo

      Before evaluating my central argument, let’s see what I got right with the three factors. The occupation of Iraq was indeed unsuccessful in many respects, though it lasted officially for only eight years, not a full decade as I predicted. US troops returned in 2014 as part of the campaign against the Islamic State, and approximately 5,000 are still there today (though Trump has announced a reduction to 3,500 by November).

      The debacle of the Iraq War has deeply affected US military thinking. It has made it more difficult for the United States to mobilize popular support and international backing for military campaigns. But during the Obama era, the US largely shifted from “boots on the ground” to war at a distance through airstrikes and drone warfare. The military budget, as a result of economic pressures, peaked in 2010 at $849 billion and then began to fall (just as I predicted but not as significantly as I would have liked to see).

      Embed from Getty Images

      China has steadily strengthened its global position since 2007. The US economy remains larger than the Chinese economy, as measured by nominal GDP. But if you look at GDP by purchasing power parity, China surpassed the US in 2017. Either way, of course, China is still behind the United States in GDP per capita. Whether China on balance has become economically more powerful than the US remains controversial.

      What is not controversial, however, is China’s creation of a rival multilateralism. It decided to do this not through the Shanghai Cooperation Organization (SCO), as I predicted, but through a set of institutions that it could more easily control: the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank it launched in 2014 and the various “One Belt, One Road” (OBOR) initiatives that it started in 2013. Many European countries, by the way, joined the AIIB, over the objections of the US. Those defections didn’t end the transatlantic relationship, but they certainly weakened it.

      At the moment, the US is focused on China’s nationalism and the more assertive foreign policy of Xi Jinping. But even as it clashes with certain of its neighbors — India, Vietnam — China remains more focused on building a web of strong economic and diplomatic relationships around the world. And that makes China a more powerful rival for global influence than the flexing of its muscles in its neighborhood.

      Finally, let’s take a look at the US economy. The subprime mortgage crisis of 2007 turned into a full-blown financial crisis the following year when Lehman Brothers collapsed in September 2008. Nearly 10 million Americans lost their houses to foreclosure between 2006 and 2014, and less than a third of them would buy another house. In 2008, 2.6 million Americans lost their jobs. The housing market didn’t recover by 2009. But the Obama administration stabilized the economy with a significant bailout of the banks, and the US economy would eventually recover.

      But the financial crisis, in part because of the bank bailouts, also helped shift enormous resources to the wealthy. The resentment that caused, in the US and elsewhere around the world, helped generate a wave of right-wing politics that eventually deposited Donald Trump in the White House.

      Trump and the Next President

      In 2007, I could not have predicted the ultimate political triumph of Donald Trump. In fact, up until election night 2016, I still expected him to go down to defeat. Instead, I predicted that the backlash to Obama’s tepid, middle-of-the-road politics would hit in 2020. America B, the large part of the country that got hit hard by the financial crisis and never recovered, was itching for revenge. As I wrote in June 2016:

      “As long as America B is left in the lurch by what passes for modernity, it will inevitably try to pull the entire country back to some imagined golden age of the past before all those ‘others’ hijacked the red, white, and blue. Donald Trump has hitched his presidential wagon to America B. The real nightmare, however, is likely to emerge in 2020 or thereafter, if a far more capable politician who embraces similar retrograde positions rides America B into Washington.”

      Today, America faces a much more serious economic crisis. The stock market has barely taken any notice, as it heads back to its historic highs. Nor has Jeff Bezos and his fellow billionaires suffered from all the business closures and surging unemployment (indeed, Bezos has benefited tremendously from it all). America B, already weakened by President Trump’s trade war with China, is getting hit by the COVID-19 pandemic both economically and medically.

      So, it turns out that my memo to the 2020 president is eerily prescient. The cratering economy is shaping up to be the downfall of Trump. Let’s assume that the Democrats win in November. If they want to save the country — and that is the goal, not restoring America to its unipolar position — they’d better not repeat the mistakes of the Obama era. The cold, hard bottom line is that stabilizing the economy is not sufficient, particularly if it means locking in the economic inequality of US society, preserving the unsustainable nature of US manufacturing and agriculture, and relying on financial services to pull the economy out of its current hole.

      The next president has to deal with all the debacles of the Trump era — the failure to contain the pandemic, the miscalculated confrontations with China, the self-defeating hostility to internationalism. But the next president must also ensure that Trumpism doesn’t return in a politically more palatable form. To do that will require the kind of economic transformation that Obama didn’t have the political nerve (or the congressional backing) to enact.

      To win in November, the Democrats have to remember that simple electoral catchphrase of the 1990s. To govern successfully and remain in charge in Washington, however, they’d better repeat to themselves an updated mantra: It’s the sustainable economy, stupid.

      *[This article was originally published by FPIF.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More