Politics as a Spectator Sport for Geeks
The upcoming US Presidential election will be just as fascinating as the World Cup
"I am a geek" by Julia Roy is licensed under CC BY-NC-ND 2.0.
There’s an old joke that politics is show business for ugly people. This contains a large element of truth: I certainly came across some extraordinary-looking people in the 18 months I spent as a Lobby reporter in the House of Commons in the early 2000s!
Today I want to discuss another metaphor to extend the idea a little. Politics is like a spectator sport for geeks. Half the world’s population live in countries where general elections are due in 2024. And the upcoming US presidential election is going to be the World Cup of politics!
Conspiracy theorists might imagine that the US vote will be irrelevant. This is staggeringly wrong and not just for the reasons we discuss here. In truth, the upcoming election is a testing ground for multiple contradictory strategies and the result will have deep implications for the future of the US specifically and the whole of the West in general, as we will see by the end of this essay.
Former President Donald Trump has a very difficult job on his hands. He has to fight for the Republican Party’s nomination, while simultaneously defending himself against multiple lawsuits. This is much harder than it might appear. His best strategy from a political point of view probably involves continuing to rant about “the deep state” and going on the attack, although it is difficult to see this resonating with many floating voters, let alone donors who want a return on their investment.
Meanwhile, Trump’s base will also have noticed more than 1,000 people getting arrested after the storming of the Capitol, which will hopefully make many of them think twice next time he calls for an insurrection. Some percentage of his donors will be concerned at the funds being used to pay his lawyers instead of buying campaign ads to defend his positions and attack President Joe Biden.
At the same time, Trump’s lawyers might well prefer a more refined strategy for his legal battles, possibly including deals to plead guilty to some crimes in return for reduced sentences. In any case, if he is found guilty of trying to overturn the 2020 election before November 2024, he might well find Section 3 of the 14th Amendment, which was passed in the wake of the Civil War, disbars him from seeking elected office from a prison cell.
There is a way for Trump to square the circle by positioning himself as a kingmaker for the Republican Party while concentrating on his multiple court cases. As a narcissist, stepping away from the election campaign would be a hard decision for the former president. Oil magnate Harold Hamm has already told Trump that this would be his best option. “I know he wasn’t happy,” he told the Financial Times (FT) [link behind the FT’s paywall].
The best strategy for Trump’s opponents in the Republican Party is also hard to define. How can someone stake out angry and populist positions that resonate with Trump’s small-town Christian nationalist base without alienating billionaire donors or floating voters interested in more a more mainstream approach? It might be possible, but it certainly won’t be easy.
For example, tech billionaire and Republican mega-donor Peter Thiel has already said he won’t put any money into the 2024 election because he feels the conservative and right-wing populist party is wasting its time with culture-war issues instead of focussing on creating the conditions for permissionless innovation. Can any of Trump’s rivals capture the imagination of Thiel and other rich donors?
At the time of writing, Ron DeSantis seems just as wooden as Hillary Clinton did in 2016; while current media darling Vivek Ramaswamy seems to be campaigning to be Trump’s running mate instead of a presidential candidate in his own right. Chris Christie’s campaign is great fun for critics of Trump, but appears unlikely to gain much traction in the primaries. I suspect that Nikki Haley and Tim Scott will be the underdog candidates to watch on the conservative side of the aisle, but they both face an uphill battle.
Meanwhile, President Biden is fighting the election with a conventional incumbent strategy, which relies more on economic stewardship than it does on emotional engagement. FT columnist Gideon Rachman quite correctly says that the Democrat is the heir of his Republican predecessor when it comes to the substance rather than the form. “‘Bidenomics’, the president’s ambitious and interventionist economic policies, are driven by a Trump-like desire to reindustrialise America and rebuild the middle class,” he writes [also behind the FT paywall].
An investigation by the FT shows that the cleantech and semiconductor investments coming as a result of Biden’s interventionist laws total $224bn [link behind the FT’s paywall]. At least 80% of the investments announced in the past year are going to Republican districts, the newspaper says. This creates an exquisite dilemma for Republican incumbents in down-ticket races in the rust belt, who will have to decide whether to try and claim credit for these projects after voting against the laws that made them possible.
Biden’s interventionist job-creation strategy should help his position next year, while Trump’s legal issues will act as a wild card for his position. The President is unlikely to provide any running commentary on his rival’s legal issues until Trump is convicted by at least one court - Biden wants to avoid any impression that the lawsuits are politically motivated.
Unfortunately for Biden, incumbent strategies are very sensitive to the economic mood at the time of the election. US inflation was running at 3.2% in the year to July, just ahead of the Federal Reserve’s 2% target. The Fed raised its benchmark rate to 5.25% to 5.50% in late July, the highest rate in 22 years, as a way of fighting inflation.
High interest rates tend to dampen the economy, hurting people with adjustable-rate mortgages in particular (between 8% and 18% of US home loans have had adjustable rates in recent years), as well as people with large credit-card bills and outstanding loans, as well as companies and financial investors with debt on their balance sheets.
Biden’s chances very much depend on what Fed chairman Jerome Powell and his colleagues do next. The central banker has said that inflation is still “too high” ahead of the Fed’s next meeting on 19-20 September - a further sign that he is wary of declaring victory in the fight against inflation too early. Inflation had hit 8.5% in 2022.
Any Bayesians will be keeping a close eye on the US inflation data as 5 November 2024 draws closer. If inflation hits 2% in the months ahead and the Fed starts holding or cutting rates, Biden’s chances will go up significantly.
On the other hand, Biden’s chances will go down if inflation surges again and the Fed has to continue tightening the cost of money, particularly in the months immediately ahead of the election. With Russia recently agreeing oil-production cuts with Saudi Arabia, energy prices are a second wild card that could blow up Biden’s strategy*.
It is probably premature to make any definitive predictions this far out, particularly given Biden and Trump’s advanced ages. I do feel that the bookies are correct to have Biden as the clear favourite at this stage.
One prediction that I am happy to make now is that if Trump finds a path to win the Republican nomination and the election, he will certainly indulge in extreme democratic backsliding in office. Some kind of self-coup within the following four years is more likely than not. It is an open question whether the coastal blue states would stay within the union afterwards if Trump openly breaks the Constitution. The risk of a new civil war is hard to assess in this scenario, but it wouldn’t be zero.
After eroding the institutions that are meant to hold him back, Trump would also seek to turn contemporary interventionist economics into full-blown Russian-style gangster capitalism, using executive power to reward his friends and punish his enemies without worrying about the market (or the courts) sorting out the difference between value creation and grifts. In parallel, he would seek to enrich himself, his family and his allies through kickbacks.
I also have a second prediction. Even if Trump fails to get the Republican nomination or runs and loses the election, if he gets away with his attempt to overturn the 2020 election in his various court cases, all the dodgy practices his team came up with will become standard practice in future elections. These include fake electors to the Electoral College and mob violence as the votes are counted. American democracy would be unlikely to survive another generation in this scenario. The stakes are high, as we mentioned at the beginning of the essay.
US allies need to start thinking about the implications of both scenarios now. Foreign policy in the West is often based on the assumption that the US position as the cornerstone of a web of institutions will never change, as Bronwen Maddox argues in the FT [behind the paper’s paywall]. That is no longer the case.
One book that I recommend for any geeks interested in following the election is Strategy by Edward Luttwak (see link below). He argues that we can only understand strategy by thinking about paradoxes and contradictions.
“To move toward its objective, an advancing force can choose between two roads, one good and one bad, the first broad, direct, and well paved, the second narrow, circuitous, and unpaved. Only in the paradoxical realm of strategy would the choice arise at all, because it is only in war that a bad road can be good precisely because it is bad and may therefore be less strongly defended or even left unguarded by the enemy. Equally, the good road can be bad precisely because it is the much better road, whose use by the advancing force is more likely to be anticipated and opposed.”
An election isn’t a war, but it does have winners and losers. Trump’s open threats to lock up his political opponents makes this one much more war-like than it should be. We can certainly expect to see many paradoxes and contradictions in the next 15 months as the vote draws closer.
Trump’s struggle to reconcile his legal and political strategies; the difficulties that his Republican rivals face in searching for positions that appeal to populists, donors and floating voters; and Biden’s attempt to create well-paying jobs for people who are tempted to vote for the other side are all examples of potential contradictions. There will be more. The comments are open. See you next week!
Further Reading
Strategy: The Logic of War and Peace by Edward N. Luttwak
*Russia’s interest in raising energy prices just before an election year in the US should be obvious - Biden has positioned the US as a long-term ally of Ukraine. An energy shock could hurt his position and raises the odds of a new face in the White House, possibly including one who would provide less muscular support to Ukraine. DeSantis, Ramaswamy and Trump have all made the case that Russia should be appeased, although other Republican candidates, like Christie, Haley and Scott, want to beef up Biden’s strategy.
Meanwhile, Saudi Arabia is nominally a US ally. There are probably many reasons why it decided to support Russia on energy prices. It is worth mentioning one element that might have influenced the decision: the Democrats, Biden’s party, are making noises about investigating the 2021 investment of $2bn by Saudi Arabia’s sovereign wealth fund (SWF) into Affinity Partners, a private equity fund run by Trump’s son-in-law and former senior advisor, Jared Kushner.
The Saudi SWF that made the investment is chaired by Prince Mohammed bin Salman (MBS), who has been accused of organising the murder of journalist Jamal Khashoggi. The Biden administration declassified a document in 2021 that blamed MBS for the journalist’s death. More recently, Biden’s administration has been trying to broker a historical deal between Saudi Arabia and Israel. Understanding the Middle East is always complex!
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