This group could decide the election

 

Gordon L. Weil

A dozen people will meet behind closed doors next month and make a decision that will heavily influence the presidential election and might even decide it.

They are not politicians. They are a group of almost anonymous economists and bankers who will set the interest rate affecting everything from mortgages and housing to credit cards and pensions. 

Its decision will have an immediate and nationwide impact. That’s more real change than most economic policy actions by the president.  And it could also determine the election.

The group bears a technical sounding name: the Federal Open Market Committee or FOMC.  But its effect is hardly technical.  It is coldly practical, and its decision will cascade through the economy the minute it is announced at two o’clock on the afternoon of September 18.  This will come at the end of the only FOMC meeting scheduled before the elections.

The FOMC is poised to lower interest rates.  That’s a big deal and is expected to be politically popular.  Coming while a Democratic president holds office, the lower rates could boost the Democrats’ election chances.  Yet the decision will be a judgment based on economic factors, information available to the public, and not on politics.

The FOMC supports the Federal Reserve, which has two major tasks – keeping employment high and inflation low.  It’s a balancing act, because promoting one goal can produce negative results for the other.

Many people have faced a higher cost of living and assign blame to high interest rates.  Whatever the underlying factors, a majority holds President Biden responsible, with inflation being a key contributor to his unpopularity.  Lower rates and resulting lower prices could boost the chances of Kamala Harris.

Donald Trump has been an advocate of lower interest rates, a position that has political appeal.  He has come to dislike the rate policy of Jerome Powell, the person he had appointed as the Fed chief.  Recently, Trump has favored waiting to lower rates to deny political help to the Democrats. 

Trump backers have suggested that presidents ought to take part in setting interest rates.  If the president played such a role, it would be like their having a say in Supreme Court decisions.  Now, the president’s role with both the Supreme Court and the Federal Reserve Board consists of appointing their members. 

Presidents are supposed to keep away from these economic decisions.  Otherwise, short-term politics can seriously harm the national economy.  Leading central banks around the world, like the Fed, are kept independent of political leaders by law. 

The Federal Reserve has traditionally kept its distance from presidential politics, especially following a major crisis about 50 years ago when Fed policy got too close to a campaign. Since then, they have been a carefully reserved Reserve.

The FOMC is composed of twelve members:  the seven members of the Board of Governors of the Fed, appointed by the president for 14-year terms, plus five representatives of regional Federal Reserve banks.  The FOMC votes are made public, and, unlike the Supreme Court, there is remarkable agreement among the members, no matter their political affiliation.

Following the Great Recession of 2008 and the Covid crisis beginning in 2020, employment fell, eventually leading the FOMC to stimulate the economy by setting interest rates at zero.  Then, as the economy improved, it raised rates to block inflation by slowing business investment. 

Its policy worked.  First, unemployment was sharply cut.  Then, the FOMC raised rates back to traditional levels.  Price increases have slowed, but so has employment growth.  

Here’s where politics comes in.  People had grown accustomed to the low interest rates used to stimulate the economy.   When the FOMC increased rates, it intended to slow economic growth and reverse inflation.  But many people liked low rates, so grew unhappy with the FOMC interest policy.

The Fed has tried to bring about what is called a “soft landing.”  In dealing with both employment and inflation problems, it had to avoid pushing too hard either way, because it wanted to avoid a recession.  That’s a tough challenge, not always popular, and it seems to be working.  But the Fed has struggled to get the right timing for its moves.

If, by its decision in September, the FOMC lowers costs in the economy, almost everybody will take that as good news.  Their new optimism, probably accompanied by higher stock market values, could have a political effect.  With Trump now holding a slight lead on his ability to handle the economy, it could help Harris.

The cut won’t be huge, either a quarter or a half percent, but it will produce lower costs for people and businesses.  In this short campaign, that could be a big influence on how people vote.  Let’s see how the hot politics of a cold economic decision play out.

Harris, Trump promises depend on Congress

 

Gordon L. Weil

Promises, promises.

Presidential candidates make them.  Voters complain that they don’t keep them.

Promises reveal a candidate’s political views, but often they cannot be kept.  Keeping them most likely depends on the president’s party winning majorities in both the U.S. House and Senate. 

This year, the presidential election takes place alongside races for all 435 House seats and 33 Senate seats.  The results of those 438 other federal elections may reveal as much about national policy in the next couple of years as the outcome of the contest between Kamala Harris and Donald Trump.

Right now, the balance of power in both houses of Congress is close and is expected to remain tight.  Currently, the House has 220 Republicans and 212 Democrats with three vacancies.   In November’s election, 21 seats are rated as toss-ups, so House control is up for grabs.

A toss-up seat is usually one where the representative aligns with one party, while the voters support a presidential candidate of the other party.  Maine’s Second District, represented by Jared Golden, is one of the most Republican districts with a Democratic representative.

Golden is a classic case, like Sen. Joe Manchin of West Virginia, a Democrat who keeps the views of his district always ahead of pure partisanship.  Goldin has made clear why he is a Democrat, but keeps his distance from the Democratic Party, sometimes opposing it on issues supported by most of its House members.

While he has voted against the policies of President Biden more than any other House Democrat, he has not cast the decisive vote to kill a Biden policy. That’s partly because there are other Democrats who share his approach.  In 2021, he refused to back Nancy Pelosi for House Speaker and joined others voting for another Democrat.  Still, Pelosi was elected.

The presidential race could have a major influence on his re-election chances.  Trump expects to carry the district.  Either Golden must continue to convince voters that his loyalty to them is greater than his Democratic ties or Harris must succeed in reducing Trump’s strength in the district.

By not endorsing Harris, Golden has immunized himself from having to support or defend her positions as she announces them, keeping his focus on district interests. Still, as a Democrat, he is sure to get seats on House committees, less possible for a true independent.  His committee roles can be important for Maine.

Golden’s race could be critically important to the Democrats, because they have a realistic hope of winning control of the House.  Their chances in the Senate are far slimmer, so the House could be the barrier to the possibility of full Trump government control.

The Senate now includes 51 Democrats and allies and 49 Republicans. The Democrats have 22 seats up for election this year while the GOP has only 11.   Only two of these seats, both held by Democrats, are considered to be toss-ups.  If they hold those seats, the full Senate would end up split 50-50.  The Vice President breaks ties, so the presidential election outcome matters.

But tie-breaking might not be enough, because the minority party could deny the 60 votes required to end debate and could block most decisions.  The only limit is that the American people have no appetite for a government shutdown resulting from total disagreement, so a band-aid budget could be allowed to pass.

Presidents have gained more power in recent years, but they are not completely free to act.  The courts may restrain them, and the congressional power of the purse may limit how far they can go.  Without congressionally approved spending, they can be at least partially blocked.

After the Democratic National Convention, the campaigns enter into the home stretch of this unusually short race.  The September 10 presidential debate could be a turning point.  Trump might step up his efforts to undermine public confidence in Harris.  As the younger candidate with special appeal to women voters, she could try to push her momentum.

If Trump regained the polling lead, he could have a strong influence either way on the congressional races.  Voters might support Democratic candidates to ensure a balanced or divided government or they might vote Republican to give Trump the full support he needs to keep his promises.

In contrast, a growing Harris lead would mean she had strong momentum.  That could yield her a bigger win, possibly providing a margin that would make it more difficult for the almost inevitable election challenges that would follow a Trump loss.   

If her gains continue, her momentum could help Democrats in toss-up congressional races.  Beyond that, watch to see if any race where the GOP candidate is currently rated as a sure winner becomes a toss-up, which could be a bellwether of a possible Harris victory.

 

Harris’ policies versus Trump’s

 

Gordon L. Weil

During the Democratic National Convention, news analysts repeatedly say that Kamala Harris had better hurry up and define her policies before Trump does it for her, putting her on the defensive.

They start from a false premise.  She has stated these major policy positions:

Reproductive choice (formerly known as abortion rights).  She is outspoken on this key issue and wants a federal guarantee of this right.  By contrast, Trump varies between banning it nationally and state action.

Economy.  She has proposed traditional Democratic pump-priming measures to stimulate housing and jobs.   She wants anti-gouging laws as some states, like Texas, already have. She favors an independent Federal Reserve.  By contrast, Trump favors wealth accumulation, which should be an incentive to striving workers. This is even less than trickle-down.  He would end Fed independence.

Immigration.  She supports bi-partisan legislation, which Trump instructed the GOP to block, so he could later get the credit for it.  She also supports Biden’s immigration controls which are working with Mexican help. Trump wants to deport millions of long-term residents, that would undermine the economy.  Plus, the wall.

Labor unions.  She supports them and their greater role.  Trump would fire people who seek to organize.

Israel-Palestine.  She supports immediate cease-fire, but cannot depart from Biden policy on arms sales.  The country can have only one foreign policy at a time.  Trump supports Netanyahu, so could not broker peace.  This is a loose end for Harris, but you cannot negotiate independently from Biden or by showing your hand publicly.

In a short campaign, the candidates can focus on a few of the most major issues.  They have done so and have contrasting positions.  The pundits should back off. 

Finally, Trump sees America as failing; Harris sees it rising.  It’s the “vision thing.”

Election puts image over issues

Gordon L. Weil

Political campaigns look for motivational catch phrases. 

One of the most famous was posted in Bill Clinton’s 1992 campaign headquarters.  It simply read: “The economy, stupid.”  Workers were to focus on this single issue as a key to winning.

This year, the key may just be emerging to voters distracted by daily polls.  It could be: “It’s about image.”

Pollsters ask voters about the issues most important to them.  Or they may ask about whether a voter views a candidate favorably or unfavorably.  If you have ever voted for a candidate you disagreed with on a major issue or just plain disliked, you might doubt the value of such opinion surveys.

Polls don’t ask if the personality and character of a candidate influences a voter more than their position on major issues.  This year, it’s possible that the image reflecting each candidate’s character may matter more than their positions on issues.

Of course, this effect focuses mostly on swing voters.  The great majority of voters decide based on party affiliation or their personal loyalty to a specific candidate.   Relatively few such people are moved by campaigns. Some issues, like immigration or abortion, may promote voting swings, but how much is not clear.

The contest between former President Trump and Vice President Harris appears to turn largely on who they are more than on any single issue.

Donald Trump provides simple answers to difficult questions. His intentionally inflammatory statements appeal to some people unhappy with the government, especially when they believe others benefit at their expense.  He is negative about the country, and his recourse to America’s “great” past may signal an attempt to slow the changing national ethnic mix.

Yet, Trump’s simple answers may turn out to be simplistic, turning off some voters.  He does not hesitate to lie about objectively verifiable facts.  Recently, he has boldly asserted that there were no crowds at Harris rallies, when thousands could directly testify to having been there. 

He makes claims about his past successes and unfounded charges against the Democrats, but the risk is that the media’s fact-checking can sound like sour grapes.  He is harshly negative about the state of the nation.  His self-confidence may stifle reporters, who struggle to avoid showing any bias against him.

He is more attached to power than the substance of policies, many adopted from hard-right advocates.  He has successfully attached himself to extreme Republican conservatism, which he found ready for strong leadership.

Trump has always been ambitious.  His political career seems more driven by self-gratification than public service.  As with some other past political leaders, the old mantra may apply: “Deep down, he’s shallow.” 

Perhaps above all else, the undeniable fact is that he is now by far the oldest candidate, which could bring him under closer scrutiny.  He now seeks debates, both because he may see himself as the underdog and to demonstrate that age has not taken the same toll on him as it has on Biden.

Trump is well-known, but Kamala Harris has to become known in a short period of time.  Her undeniable facts are that she is middle-aged, far younger than Trump, and a woman.  The challenge for her is to demonstrate that matters politically.

She is trying to show herself as highly active and able to maintain a level of campaigning that is beyond Trump’s ability.  She implicitly makes age an issue and makes frequent campaign stops so that voters and the media can form fresh opinions about her.  She is upbeat.

The test of her political skill comes in having to remain loyal to Biden, who gave her the path to the presidency, while showing she has a mind of her own and can open some space with the administration in which she still serves.  Israel-Palestine may be a bigger challenge to showing if she can lead than immigration or the economy.

Pundits have focused on the Democrats ceding blue collar voters to the GOP, implying that these losses cannot be fully made up by their gains among educated women voters. Harris obviously ties her image to support for abortion choice, an issue resonating with women voters, and the numbers may be in her favor.

The number of women over age 25 with post-high school educational attainment far exceeds the number of men whose schooling ended at high school or earlier.   Here Harris’ persona could matter.

As for running mates, they likely can hurt a ticket more than help it.  JD Vance, like Trump who chose him, runs based on his celebrity.  He is intensely loyal.  Harris’ Tim Walz, a Minnesotan, comes across as a Midwesterner in the tradition of his state’s long-ago Veep, Hubert Humphrey, called “the happy warrior.”

Voters may decide based on candidates’ images, more than on the issues.  Maybe they always have. 

 

‘The Big Mo’ -- Harris needs momentum; Trump would block it

 

Gordon L. Weil

Political candidates want “The Big Mo” – big momentum.

The idea, which originated in professional sports in the 1960s, soon spread to politics.  The theory is that momentum influences how people vote. Progress promotes progress.

In this year’s presidential race, we may see momentum. That’s because the 100-day campaign is much shorter than it has been in more than half a century.  President Biden’s withdrawal produced a new Democratic candidate and entirely changed the landscape for the challenger. 

Not only is the campaign brief, but also both candidates start from scratch.  Though her success came rapidly, Vice President Kamala Harris could not begin her campaign until she had lined up the necessary delegate support.  For former President Donald Trump, it meant going “back to the old drawing board” to redesign his campaign.

For Harris, given the declining Biden support, there’s nowhere to go but up and momentum is essential.  She needs to restore Democratic unity and gain among independents and disaffected Republicans.  For Trump, who may have peaked just short of 50 percent, the challenge is stalling her momentum by adding to his core support.

The shorter campaign with its necessarily sharper focus might increase voter interest between now and November 5.  In this short race, the vice-presidential picks could be a factor.

Trump’s choice of hard-hitting JD Vance was meant to appeal to Mid-America’s workers. So far, Vance has not boosted Trump’s standing.  Harris’ had the same intent with Tim Walz.  She may hope that his affable style plus his greater federal government experience than Trump, Vance or herself can add to her momentum.

The media plays a critical role in how campaign interest develops.  Aside from the purely partisan players like MSNBC and Fox, preaching to the faithful, many voters develop their impressions of candidates from the media’s coverage.  Media messages may not be explicit, but can be tilted.

Of course, money also matters. With huge war chests, candidates’ paid media conveys often exaggerated or false information, focusing more on the opposition than themselves.  That can motivate their supporters and influence people who accept the video spots as fact.  The bias is obvious but still can be influential.

A driving force behind media attitudes is opinion polling.  The polls now come in a daily torrent.  Every day’s little movement, even within the so-called margin of error, influences the media. Does it focus on Harris’ experience or inexperience?   On Trump’s policies or his posing?  The polls may guide the coverage.

As frequently noted in this column, polls have serious defects, ranging from the refusal of many voters to participate to the undisclosed bias of the pollsters.  So, survey numbers should be viewed with skepticism.

But they are useful in at least one respect. They reveal momentum.  If a candidate’s numbers are steadily growing, that shows positive momentum.  At that point, the media can be expected to become more positive about a candidate whose support is growing.  In turn, more positive media coverage can stimulate more positive poll results.

Handle with care. The poll results are fragile and can be affected by a single major event.  The bottom fell out for Biden after his debate failure in a way that could not have been foreseen.  That one evening changed the entire election campaign.  If the event or error is big enough, simple coverage of it can affect voters.

Much of the media and voter focus is on the national poll standing of the candidates.  That’s not really helpful, because we do not have a national, popular election.  Given the way the electoral vote works, a Democrat is likely to need a solid lead in the country as a whole to be assured of gaining enough electoral votes.  Running even with a GOP opponent may not do the job.

Where history has shown close races, the media focuses on swing states that might determine the election outcome.  Polling may focus on individual states, but the surveys may be intermittent or incompetent. The same concerns apply as for national polling.

The greater the margin between the two alternatives, the more reliable are the poll results.  Statistics show that survey data is more reliable the wider the gap.  Here polling momentum can matter, flowing through to the media and back again.  Within the margin of error, differences don’t matter.

Trump must try to block any Harris momentum by extending his appeal beyond his MAGA core.  If he holds onto Republican conservatives, he could win.

Harris has benefitted from increased party unity following her selection and may get a lift from the Democratic National Convention. 

Can she capture “the Big Mo” next month?  If her progress is more than a polling “bounce,” she could surprise with a solid victory. The bigger her margin, the lower the likelihood of an effective Trump post-election challenge.

Election campaign worries? Take the long view

 

Gordon L. Weil

The political campaign these days often makes it sound as if the ultimate fate of the democracy and the country will be decided in November.  It’s now or never.

But this year’s election, though of unusual importance, will not represent the last word in American history no matter how much the campaigns raise fears.  Of course, elections matter and people should always vote, but some current trends seem highly likely to recede over time.  The underlying course of the country yields reasons for optimism.

The motto of Donald Trump and the Republican Party he has captured is “Make America Great Again.” By its own terms, this is a backward-looking message.  It is based on the belief that if the country can return to its glorious past, reversing immigration, halting inflation, ending diversity efforts, limiting environmental protection and stymying the rise of women.

This premise is almost entirely false.  Many of the claims lack evidence, but gain some acceptance thanks to sheer repetition.  It’s the triumph of politics over truth.

Here are some facts.  Immigration policy has been proposed more than once, but it won’t happen without the support of both parties, and that has been lacking.  Meanwhile, illegal immigration has again been slowed, though much needs to be done. And we can’t deport the millions who arrived in the U.S. unlawfully.  Besides, their removal would severely damage the economy.

Both inflation and prosperity have many causes, and presidents should not take the blame or the credit for either.  Government institutions, created to tame economic excess, have done generally well. No president can be held responsible for economic change.  Many forces outside of the government will propel the economy.

Without full equality for all Americans, some people exploit others. That may be fine with the people on top. That may be what “great again” means to some MAGA partisans, but, however traditional, it’s a long way from American ideals.  And it doesn’t work.

If corporate success is more important than human health, then the country could dismantle efforts to protect land, water and air.  That would restore some version of “great again,” by trading future survival for short-term gain.

The dominance of women by men, dating back to the Stone Age, may be what some men want, but women are better educated and less dominated these days.  Their progress can no longer be stopped or reversed.  Four of the nine Supreme Court justices are women.  More than a quarter of Congress members are women.

The country was long controlled by white men, presumably when America was “great.”  If you want to reverse or halt the loss of that control, preventing a majority from sharing in it, then MAGA is your movement.  But demographic reality rejects MAGA.

We are urged to believe that if Trump and the GOP win in November, MAGA will rule and its policies will be applied, dismantling representative democracy and replacing it with an irreversible authoritarianism.

Like the bases of MAGA itself, this conclusion won’t stand up. Nations pass through difficult times without necessarily succumbing to them. 

Take the extreme case of the Civil War when the very existence of the country was at stake. The Union was preserved and a changed country emerged to become the world’s greatest power.  While the war and its aftermath transformed the country, America kept its ideals intact and was able to adapt to rapid change.

Under far worse circumstances, countries recover.  Germany went from Nazi rule to liberal democracy with widely enjoyed prosperity.  In Chile, a popularly elected left-wing government was overthrown by the military.  Yet that the authoritarian regime could not hold onto power and democratic government has come back.

This year’s elections, whatever way they go, will not be the last word.  Of course, MAGA will fight the result, if it loses.  Over the longer term, it will be overtaken by change.

Despite efforts to block “the browning of America,” the make-up of the American population is gradually changing.  The Census Bureau forecasts that no one racial group will be a majority after 2044. 

Educated women wield new political power and anti-abortion efforts stimulate their increased involvement.  Racial attacks increase Black and Latino participation.  Climate change raises broader environmental concerns.  As it always has, immigration will change the country.

Liberal Democrats should neither panic nor hunker down while fearing eventual MAGA long-term rule.  They should agree on and pursue their own agenda and not merely respond to Trump. The moment when MAGA loses its hold could come anytime.

The greatest victim of the MAGA movement has been historically constructive American conservatism.  Traditional conservatives could retake the Republican Party.  The country needs them to get back into the political system.

This long view points to a day when “Make America Great Again” might be only an historic relic.