American Melodrama

A Twist In The Plot

July 2024 has been the most tumultuous month in American politics of my lifetime. The US presidential election was to have been Trump versus Biden and Trump looked like a slam dunk. Now it will be Donald Trump versus Kamala Harris, and there is all to play for.

Why did President Joe Biden announce that he would not seek a second presidential term last Sunday (21 July) and would “pass the torch” (in his own words) to his Vice President?

Several factors coincided.

Firstly, The Trump-Biden TV debate of 27 June was a car crash for President Biden who slurred his words and at one point became entirely incoherent. He looked frail and tired. Donald Trump completely humiliated him. Thereafter, the donors began to mutter. Certain celebrity backers – including George Clooney and Michael Douglas – implied that a senile Biden could not beat Trump. Meanwhile, Elon Musk came out for Trump.

Secondly, those fears intensified after Donald Trump miraculously survived an assassination attempt at a rally in Butler, Pennsylvania on 13 July. The bullet that pierced Donald Trump’s right upper ear would have penetrated his skull had he not turned his head a split second before the shooter pulled the trigger. Whatever you might think of Donald Trump, he showed courage and defiance in this terrible moment, standing aloft – despite the efforts of five secret service agents to keep him supine – and clenching his fist and then chanting “Fight” to the acclaim of an adoring crowd.

Photos of that moment will remain iconic for decades to come. In the week that followed the contrast between Trump the Terminator (“I’ll be back”) and Sleepy Joe could not seem greater. Trump drew ahead of Biden in the polls in the key swing states – Georgia, Arizona, Nevada, North Carolina, Michigan, Wisconsin and Pennsylvania. Commentators began to say that Trump could not now lose in November. It was rumoured that Nancy Pelosi – the former Speaker of the House of Representatives, retired but still immensely influential – was urging Biden to stand aside.

And then, thirdly, just as he began his election campaign with a rally in Minnesota, poor old Joe went down with Covid and retreated to his Delaware beach house. The footage of his exit from Air Force One – and he always ascends and descends steps gingerly – reinforced the widespread impression that the president was past it.

Fourthly, Donald Trump, his right ear still bandaged, was officially anointed as the Republican presidential nominee at the Republican National Convention in Milwaukee, Wisconsin (a key swing state) on 18 July. He made an impassioned speech of acceptance lasting over 90 minutes – the longest ever. It was interrupted by ecstatic chants of “Fight, fight, fight”. This meant that the Republican Party and the Trump campaign swung into gear at precisely the moment that the brouhaha around Mr Biden’s candidacy had become a crescendo. Not only would Trump beat Biden but the Democrats might lose the Senate too. The entire Democratic Party was put on the back foot. Something had to be done well before the Democratic Party Convention scheduled for 19-22 August in Chicago.

One of the reasons Mr Biden did not step down earlier, apparently, is that it is legally questionable to transfer the campaign war chest he has raised to an alternative candidate. (Trump’s people are going to contest this in court). Another reason lies with the first lady, Dr Jill Biden. Until last weekend Mr Biden seemed determined to fight on; but clearly the siren voices eventually prevailed.

No putative presidential nominee has pulled out of the race just 107 days before the vote ever before. This gives the Harris campaign relatively little time to showcase their candidate. That said, Kamala Harris was reported to have raised $90 million in fresh donations within days. And on Tuesday (23 July) she kicked off her campaign with a rousing speech in Milwaukee – a symbolic location. Kamala mania continued on Wednesday at a rally for black women in Indianapolis.

Many Americans of all political persuasions have criticized the White House staff for allegedly having deliberately obscured the true state of Mr Biden’s cognitive decline. He should, some say, have been obliged to step down long ago, if necessary by invoking the 25^th Amendment. As it is, Mr Biden will remain the 46^th President of the United States until the end of his term of office on 20 January next year. That means that in his last six months he will become a “lame duck” as the American phrase has it, unable to instigate his programme because his authority will wane as he approaches the end of his tenure.

Technically, Ms Harris will not become the official Democratic Party presidential nominee until she is confirmed as such at the Democratic Convention in late August. But it is now virtually impossible for any other putative candidate such as California Governor Gary Newsom or Michigan Governor Gretchen Whitmer to snatch her crown. A contested Convention would go down badly with the electorate; a glitzy one will win votes. Either way, the Convention will keep Trump & Co. out of the headlines for a few days. And Ms Harris’s choice of running mate (who will be, we are told, white, male and heterosexual so as not to scare the horses further) will be interesting. Or possibly not.

Kamala Harris is a 59-year-old left-wing woman of colour who first came to prominence as the Attorney General for the State of California. In that capacity she prosecuted numerous high-profile offenders – an experience to which she referred in her speech of acceptance. But she is not without critics even amongst progressive Democrats. Her policy of punishing the parents of school truants rebounded mostly on black people. While serving as Vice President, she has not distinguished herself and is regarded as a weak public speaker. But the point for most Democrats and other progressives is that she is the Anti-Trump – she is all that stands in the way of a man whose return to the White House would – according to most left-leaning pundits – herald the end of American democracy itself.

On Wednesday evening (24 July), President Biden delivered a somewhat wistful live address to the nation from the Oval Office. He told Americans that, given his achievements, he would have deserved a second term but that he had decided it was in the nation’s best interest to step aside. He commended Vice President Harris as “tough and capable” but did not even mouth the name of her opponent. This reinforced the sense of an ending, even if Biden will continue to be the world’s most powerful man for another six months.

What The Markets Make Of It

The week after the assassination manqué the markets were impacted by what became known as the “Trump Trade” as traders raised the probability of a second Trump presidency to more than 70 percent. But what would Trump 2.0 entail? Probably not a material cut in the US fiscal deficit – and as a result the yields on longer-dated US Treasuries edged higher. But very likely a pro-business, tax-cutting programme – and that sent the S&P 500 to new highs on Tuesday, 16 July. Notably, smaller companies fared better than the tech giants with whom Trump is thought to be unfriendly.

In terms of the currency, Trump has called in the past for a weaker dollar to bolster exports from the US manufacturing sector. On the other hand, judging from the rhetoric, it seems likely that a second Trump administration would slap tariffs of imported goods – and that might strengthen the dollar and unleash inflation. Team Trump want lower interest rates even though many of their policies could be inflationary. That points to a potential conflict between the White House and the Federal Reserve.

The 2024 Q2 GDP data released on Thursday (25 July) confirmed that the US economy is still growing at pace – up by 2.8 percent during the quarter, compared with 1.4 percent in Q1. That was more than the markets were expecting. This is seen as too hot as it could be inflationary. That means that the Fed may not be able to cut rates as far and fast as hoped.

The Trump rhetoric is around laissez-faire economics and de-regulation with a menacing hint of trade wars – against America’s allies as well as the Chinese dragon. Trump’s first presidency was characterised by economic and geopolitical stability, even if it was derailed by the Covid pandemic and The Donald’s somewhat unconventional medical pronouncements like the benefits of drinking bleach. Right now, the pandemic has been exorcized from our collective memories – note that it was not even mentioned during the recent UK election campaign.

Ms Harris now looks like a serious contender even if most high-level Democrats believe that she would never have been the Democratic nominee except in these exceptional circumstances – her presidential bid in 2019 got nowhere. And her opponent is clearly concerned by the turn of events, even if he calls Harris “dumb as a rock”. Harris is 19 years younger than Trump and has wide appeal amongst minority groups. One week ago, Team Trump thought the election was in the bag – but no longer. The latest polls put Trump and Harris neck-and-neck. Accordingly, this week, the New York equity markets have been more restrained. But the mood could swivel at any moment.

The Harris Question

In terms of foreign policy, Kamala Harris is an entirely unknown quantity. She has zero experience of foreign relations and has never opined on geopolitics. We can suppose that she might wish to retain the services of two of President Biden’s more successful appointments – namely, Antony Blinken as Secretary of State (foreign minister) and Jake Sullivan as National Security Advisor – which would reassure America’s allies. She has been more outspoken regarding the civilian death toll in Gaza than President Biden and appeared deliberately to avoid Benjamin Netanyahu during his visit to Washington this week. However, it is unlikely that US support for Israel would fundamentally change under a Harris presidency.

Ms Harris’s stint as “border czar” in the first year of the Biden administration was underwhelming. In June 2021, she travelled to Guatemala City and declared: “I want to be clear to folks in the region who are thinking about making that dangerous trek to the United States-Mexico border: Do not come.” This plea went unheeded. Illegal border crossings have reached record highs these last two summers. In fact, there are few achievements that can be directly credited to her.

The great foreign policy faux pas of the Biden administration was the decision to withdraw the US garrison from Afghanistan. This force of a mere 3,000 military personnel sustained the pro-western government of Ashraf Ghani. Once removed, the country was effectively handed over to the Taliban. Arguably, that was the moment when President Putin decided that he could invade Ukraine with impunity – something he did in February 2022.

It is unlikely that the leaders of the anti-western quartet – Russia, China, Iran and North Korea – would quake in their boots at the prospect of dealing with Kamala Harris. On the other hand, they will think twice before offending Donald Trump. We do not really know what Mr Trump’s policy would be on Ukraine. He and his prospective Vice President have said ungenerous things about Ukraine and President Zelensky – JD Vance said in 2022 that he “did not care” about Ukraine. But that does not necessarily mean that they would throw Ukraine to the Russian wolf. And would a ceasefire followed by a peace conference be such a bad thing?

Trump’s Likely Legacy

The most consequential thing that Mr Trump has done is to transform the Republican Party – prospectively for good. The Donald Trump of 2024 is not the same Donald Trump of 2016. Then, Trump was forced to pick a vice-presidential running mate who was mainstream and acceptable to the old Republican establishment. He chose Mike Pence, a mid-western evangelical Christian (with whom he is no longer on speaking terms since the insurrection of 06 January 2021). This time, he has chosen in JD Vance – a man who is capable of putting intellectual flesh on the populist bones of Trump’s stomach-punching MAGA ideology. Mr Vance has already attracted the support of trade union leaders such as the boss of the Teamsters Union who speaks for 1.3 million working class Americans.

Mr Vance is deeply marinated in contemporary American conservative thought and sees himself as a leader of a movement. (That word again – as in France’s Rassemblement National). Mr Vance is a convert to Catholicism, married to a Hindu. (American Hindus incline towards conservatism). Trump, in contrast, is of no known spiritual address, though he claims that his favourite book is the Bible – even if he cannot cite his favourite passage.

If Trump is re-elected on 05 November, JD Vance will become his presumed successor and thus the likely Republican presidential nominee in 2028. He will still be only 43 years old then and would only be in his early fifties after two terms in office. And then Donald Jnr., or Eric or Ivanka might take the reins. Maybe the future will be as dynastic as the past. One wonders what Kim Jung-Un makes of it all.

In this way, Trump could sail away into retirement in January 2029, knowing that he has changed America, and indeed the world, forever. I wrote a piece here about the world in 2099 a few Christmases ago. I can still visualise the gigantic pink marble ziggurat in Arlington National Cemetery that I imagined will be his mausoleum.