2020 – The year America dumped Trump?

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2020 – The year America dumped Trump?
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Back in January President Trump looked assured to win the US presidential election come November. But the coronavirus pandemic has changed everything. Even with a weak opponent, Mr Trump faces an uphill challenge to survive, writes Victor Hill.

Mr Trump’s miserable spring

Around the end of January things were looking good for Donald Trump. The US economy was ticking along very nicely; unemployment had hit a record low; and Wall Street was hitting new all-time highs. The President had just shrugged off Ms Pelosi’s desultory attempt to impeach him (supposedly for malpractice in the Ukraine) and his approval ratings were good. The Democrats were squabbling about who would be their nominee for the forthcoming 03 November presidential election – but no candidate stood taller than the others.

Then in late February/ early March the coronavirus pandemic arrived in the United States and the President’s legendary luck began to run out. Not even Mr Trump’s greatest admirers believe that the President’s management of the pandemic has been his finest hour. First he downplayed the virus; then he blamed China and the WHO. As for his enemies, the inanity of some of his utterances (for example his proposal that sufferers should be injected with bleach) confirmed that this was a man unfit for high office.

To be fair, many observers overestimate the amount that a president can do in a crisis of this nature. The lockdowns, social distancing regulations and testing regimes were administered at state level with some state governors, notably Andrew Cuomo of New York, showing staunch leadership at a time of great adversity. The role of the President was to allocate federal resources to where they were needed and to coordinate the response of the various federal agencies – which, up to a point, Mr Trump has accomplished.

Where he was most notably remiss was his failure to articulate a narrative of national recovery. But that is Mr Trump. We knew that he is abrasive and discordant – that was his unique selling point back in 2016. America didn’t not vote for a man of mellifluous language and sensitive conciliation – the great Republic knowingly voted for a bruiser who was going to drain the swamp. (True, he lost the popular vote while winning the Electoral College: but in America some states are more equal than others).

The fact is, however, that America has suffered grievously from the coronavirus pandemic – much more than many less wealthy countries. And, in a country with huge disparities of wealth and income, its most disadvantaged citizens have suffered most. As of yesterday, the USA had recorded over two-and-a-half million cases of Covid-19 and nearly 127,000 fatalities. That is the largest case load and absolute number of fatalities in the world and equates to 383 deaths per million people.

Compare that to Germany’s 108 deaths per million people or Japan’s minuscule eight. (Or even China’s three – though we suspect that the number of Chinese fatalities has been under-reported.) And this happened in the nation which spends more on healthcare than any other.

Then the streets of America’s great cities erupted in discord, protest and violence. As I wrote two weeks ago, Black Lives Matter (BLM) arises out of decades of police brutality and racist attitudes; but it also arises from mass unemployment and the perception that blacks died in greater numbers than whites from the pandemic.

Mr Biden, the presumptive Democratic nominee, has maintained a low profile during the lockdowns, knowing that he only had to await the inevitable economic fallout of the pandemic to profit electorally. Mr Trump, for his part, began his re-election campaign badly last weekend with a poorly attended rally in Tulsa (a Covid-19 hot-spot). He blamed the media and the BLM protestors for the low turnout.

Woes to come

While many European countries have extended job retention schemes to the autumn and beyond, workers in the US face a cliff edge at the end of July when welfare will fall from nearly US$1,000 a week to the pre-coronavirus emergency stimulus level of US$378. If the income for 20 million Americans drawing benefit suddenly collapses, the fear is that consumer spending will plunge.

The Trump administration has rolled out the Paycheck Protection Program by terms of which small firms can get government-guaranteed loans of up to $10 million to fund payroll costs, rents and mortgage payments from a $650 billion fund. Despite the May unemployment data being better than expected, US unemployment now stands at 13.3 percent of the workforce – though most of those people expect to be re-hired when the lockdowns are unwound.

The fact remains that many Americans – including people who voted Trump in 2016 – will be feeling the pinch come November.

Rats and sinking ships…

One of the many reported revelations (allegations?) that former National Security Advisor John Bolton makes in his new book about Mr Trump’s White House is the President asked China’s President Xi to help him get re-elected. If you drill down into this claim it turns out that Mr Trump told Mr Xi (when they were still chums) at the 2019 G-20 meeting that if China could buy more agricultural products (soybeans et al) from US farmers that would do him a favour, electorally speaking. This is exactly the kind of thing that leaders say to one another while trying to build personal bonds and promote the interests of their constituencies. What is all the fuss about?

More telling for British readers is the claim that Mr Trump revealed in a meeting with Mrs May that he didn’t know that Britain was a nuclear power. Further, he thought that Finland was a part of Russia. (It used to be – he’s only a century out of time.) Mr Bolton’s theme is that the president lives in a bubble of ignorance; he doesn’t listen to informed advice; and that he has very poor judgment.

The Trump administration, via the US Department of Justice, has tried to sue Mr Bolton and to stop publication by Simon & Schuster (owned by ViacomCBS (NASDAQ:VIACA)) – but by mid-week the book was already high-up on Amazon’s best-sellers list. Mr Bolton this week declared that he would vote for a Democratic President for the first time in his life in November. Mr Trump described 71-year old Mr Bolton as a “sick puppy”. Secretary of State Pompeo described him as “a traitor”.

The odd thing is that Mr Bolton is positioned well to the right of the conventional political spectrum: a neo-con hawk who believes that America has a duty to flex its muscles and to kick the butts of intransigent counterparties, of which there are many. Mr Trump, in contrast, has turned out to be overly emollient with pudding-bowl hair-cut Asian dictators, the recycled KGB men who dominate the Russian Federation, and the increasingly chilling Chinese state apparatus.

Perhaps future historians will judge that the decline of the American Empire came about because Americans wanted to be liked too much – for such is their Achilles Heel. A beaming, senescent, doddering President Biden will no doubt restore the approbation of the woke and the chattering liberals across the West – just as the rise of totalitarian China goes unchecked.

As if Mr Bolton’s book is not bad enough, Mr Trump’s niece, Mary, the daughter of his late elder brother, is due to publish a tell-all book just before the Republican convention in August. She will reveal just how odious her uncle is – but there will be nothing that changes the minds of either Mr Trump’s supporters or his foes. The memoir I’m really looking forward to is Melania’s – in about ten years’ time.

Forecasts and polls

This week The Economist published the workings of its model of how the US presidential election will pan out[i]. According to their findings, Mr Biden has a 98 percent chance – based on sentiment prevailing on 23 June – of polling the most votes and an 86 percent chance of winning the most support in the Electoral College. The Economist’s polls suggest that Mr Biden pulled ahead of Mr Trump back in mid-March and that his lead has been widening consistently ever since. The model combines USA-wide polling data with political and economic factors at state level. It takes into account that similar states move in similar directions. Thus, if Mr Trump were to win Minnesota then he would probably win Wisconsin too. The key swing states where the outcome is still highly uncertain, according to The Economist, will be Arizona, North Carolina, Ohio and Georgia.

The model averages polls, weighting them by their sample size and correcting partisan biases. It then combines this average with forecasts based on non-polling data. On that basis, The Economist expects Mr Biden to receive 53.8 percent of the popular vote and Mr Trump 46.2 percent. According to the Washington Examiner, Mr Biden’s great advantage over Hillary Clinton is that nobody hates him: most find him inoffensive.

The British Perspective

Mr Trump is famously a proponent of Brexit and devoutly desires a beautiful trade deal with the UK – something which is currently being negotiated. He is an Anglophile who often speaks of his Scottish mother. He has significant private investments in the UK. These things have offered the British side some degree of leverage in the UK-EU trade talks.

That is because the worst case scenarios of a no-deal Brexit at the end of the transition period (31 December) would be mitigated by additional trade with the United States. The GDP of the USA is greater than that of the EU – so a relatively small increase in UK exports to America would be hugely important to our economy. Moreover, under Mr Trump, the USA has been broadly supportive of Britain’s foreign policy objectives, such as the need to uphold the Sino-British Agreement of 1984.

Mr Biden, in contrast, is not particularly known as an Anglophile; and, like President Obama, would probably regard the EU as a more important trading partner and geopolitical player than the UK. Britain would have to get to the back of the queue to do a trade deal, to use Mr Obama’s famous phrase, and indeed there may not be a trade deal at all.

All this would come at a critical moment in Mr Johnson’s premiership. The UK prime minister has lost political capital during the coronavirus pandemic, Britain having had more fatalities per million people than any of its peers.

Covid-19: More bad news

I explained last week how Covid-19 can have long-term deleterious health effects on those who recover from it. This week a study published in Nature magazine[ii] suggests that immunity to the SARS-CoV-2 virus may fade quickly, at least in people who remain asymptomatic or mildly ill, which is about 80 percent of all those who contract it. The duration of protection from reinfection is a subject of intense continued debate. This adds to the fear that Covid-19 will be around for some time to come.

CAT-scans of the lungs showed that two-thirds of those with no clinical signs of Covid-19 had what are called ground-glass opacity abnormalities in at least one lung, and one-third showed ground-glass opacities in both lungs. In simple terms, SARS-CoV-2 is damaging the lungs of most people who appear to be symptom-free. As I wrote last week, many people who contract the virus do not develop the antigen. It now looks like such people could be susceptible to contracting the virus for a second time.

About half of US states, mainly in the south and southwest, have rising daily infections; and, for the whole country as a whole, daily new cases are well above the level that prevailed in late May as the virus continues to spread throughout the population.

The nightmare for Mr Trump’s supporters is that there is a significant uptick in new infections and deaths in the months preceding the election. Some of the states which appear most vulnerable to a second wave are states that Mr Trump won in 2016 and which he must win again in order to secure re-election – such as Arizona, Florida and Georgia.

Texas was supposed to be solid for Trump. But a poll by Quinnipiac University last week puts Messrs Trump and Biden neck-and-neck. And the infection curve there is causing concern. On Tuesday (23 June) Governor Greg Abbott told Texans to stay home unless they have an urgent need to go out.

California is also showing signs of a second wave – Apple has been closing stores again there. But few Republicans expect the Golden State to go for Trump anyway. Although it has had Republican governors, California generally goes for Democrats in presidential elections.

Will America dump Trump come November? That is now more likely than not. But do not underestimate the Orange One’s capacity to surprise.


[i] See: https://projects.economist.com/us-2020-forecast/president?utm_campaign=us2020-forecast&utm_medium=email&utm_source=salesforce-marketing-cloud&utm_content=link-to-forecast-registrants&utm_term=2020-06-23&

[ii] See: https://www.nature.com/articles/s41591-020-0965-6


Comments (3)

  • Steve says:

    Victor,
    I always enjoy your pieces and have been reading Master investor for years. However, (you probably guessed there was a however coming) near the start you wrote “for example his proposal that sufferers should be injected with bleach”.

    I wonder if you have got this information from the MSM who invented this myth. I only know because I was so incredulous at the time that I took a closer look. His actual words were (talking to a doctor),

    “And then I see the disinfectant where it knocks it out in a minute. One minute. And is there a way we can do something like that, by injection inside or almost a cleaning?

    “So it’d be interesting to check that.”

    Obviously a stupid thing to say but the words “is there a way we can do something like that” is a question (a dumb one as our American cousins might say) whereas your word “should” alters the question to a statement. I hope you are not copying most of the media in skewing his words for sensationalism.

    With respect

    Steve

  • Victor Hill says:

    Hi Steve – thanks for that. Well expressed. I am guilty of repeating what was reported. Of course The Donald is not an idiot – that was the thrust of the piece – but he does have a tendency to say things that are open to ridicule by his opponents. Respect to you too – and keep reading. Victor

  • Steve says:

    Thanks for replying Victor, I absolutely agree with every word, also someone in the Whitehouse should stop him tweeting from his bed!
    Unfortunately (to my mind) he is looking on his way out if one can believe the polls.
    BTW, I particularly enjoyed your year of the plague series, keep up the good work.

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