Why ‘risky’ Donald Trump looks a better bet in the race to be US president
Niall Ferguson says the Republican’s campaign, once seen in free fall, is gaining traction with rival Hillary Clinton seeming to offer just more of the same to struggling Americans
Desperate times call for desperate neologisms. A year later, American bomber crews came up with another acronym to describe a state of affairs more extreme than snafu: “fubar”, which stands for “f***ed up beyond all recognition.” The OED defines it as “bungled, ruined, messed up. Also: extremely intoxicated.”
The big question we in America confront as election day slouches towards us is whether the future of the United States will be snafu or fubar. Slumped in the Democratic corner, her haggard visage being fanned by anxious trainers, is Hillary Clinton, candidate of the effed-up status quo. Impatiently bouncing off the ropes on the other side of the ring is the overweight, orange-featured personification of very, very risky change.
As I write, the future still seems more likely to be snafu. But the status quo’s margin of advantage suddenly looks much smaller than in the dog days of summer.
The conventional wisdom, as August drew to a close, was that Trump’s campaign was in free fall. Some Clinton supporters had even begun to anticipate a landslide.
What a difference a couple of working weeks have made. In the 13 most recent national polls, Clinton is ahead in just seven, and by margins of between one and five percentage points. The latest LA Times poll has Trump ahead by six points. Even the closely watched New York Times/CBS News poll of likely voters has the race tied, taking into account the substantial numbers likely to go to the Libertarian and Green candidates. Moreover, Trump is now clearly ahead in the two most important battleground states, Ohio and Florida.
So what has changed? The easy answer is that Clinton has just had her worst week of the campaign. It began when she dismissed “half” of Trump’s supporters as belonging in “the basket of deplorables ... racist, sexist, homophobic, xenophobic, Islamaphobic – you name it.”
It continued two days later, when she lost her balance at an event to commemorate the 15th anniversary of the 9/11 attacks, forcing her campaign to admit she was suffering from pneumonia, a fact she had evidently hoped to conceal.
Yet there is something more profound going on here, which explains why these missteps had such a big impact.
Moreover, despite the low regard in which the government is generally held, there is new evidence that public programmes significantly mitigated the impact of the great recession. In terms of market incomes, according to a new McKinsey Global Institute study, 81 per cent of US households were worse off or no better off in 2014 than they were in 2005. But after redistributive government programmes (taxes on the rich, benefits to the poor), that share was fewer than 2 per cent of households.
All this seems like grist to the mill of a campaign that essentially promises continuity. Yet there is a problem. Take another look at those figures for inflation-adjusted median household income. Yes, it was US$56,500 (HK$438,276) last year, up from US$53,700 the year before. But back in 1999 it was US$57,909.
In other words, it’s been a round trip – and a very bumpy one indeed – since Clinton’s husband was in the White House. Moreover, two fifths of Americans surveyed last year by McKinsey say their financial position is worse than it was five years ago and/or agree with the statement: “My financial position is worse than my parents’ when they were my age.” Nearly half of this group do not expect their situation to improve and a third expect their children to advance more slowly than their own generation.
Telling Americans they are nearly back to where they were 17 years ago and expecting them to be grateful therefore looks like a losing strategy. When two thirds of Americans – and an even higher percentage of older white voters – say the country is on the wrong track, they are not (as Democrats claim) in denial about the Obama administration’s achievements. They are saying the US is on a circular track, and has been since this century began.
To see why Trump is gaining on Clinton, despite his flaws as a candidate, just compare their economic policy proposals. With Clinton, you get more of the same: more spending – a lot of it on infrastructure – paid for by higher taxes on richer households, plus more regulation, especially of banks and pharmaceutical companies. Call it Obama+: the trains go round in circles, the government keeps on growing, but the economy as a whole limps along at 2 per cent a year.
By comparison, Trump offers acceleration along a new track, albeit at the risk of derailment. This is true even when he is on his best, scripted behaviour, as he was at the Economic Club of New York. Much of that speech was red meat for the Republican establishment he needs to keep on board: tax simplification and tax cuts, increased spending on defence and border security, and deep cuts in environmental and consumer-protection regulation.
Ironically, the Keynesian economists who support Clinton are on the wrong side, because even the Trump campaign admits his tax cuts would cost US$4.4 trillion over the decade. He, not Clinton, is the true candidate of stimulus, as his budgets would only come close to balancing if growth went up to 3.5 per cent a year.
On top of all that are Trump’s earlier pledges to restrict immigration, free trade and offshoring, pledges that are especially appealing to those Americans who feel most pessimistic about the future.
Neither the snafu candidate nor the fubar candidate is trusted by much more than a third of voters. But Trump is very clearly the riskier candidate. Less than a third of voters regard him as a safe choice, compared with close to half who have that view of Clinton. But on the economy and jobs, Trump leads Clinton, 51 per cent to 43 per cent. And on “bringing about real change in Washington”, Trump leads by 48 per cent to 36 per cent.
The prediction markets and political pundits still have Clinton as favourite. But wouldn’t you risk being fubar ... if it was your only shot at avoiding four more years of snafu?
Niall Ferguson is a senior fellow at the Hoover Institution, Stanford University