The State of the US `Presidential Race, an Essay

the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics.

Michael Sakbani, Ph.D., is a former professor of Economics and Finance at the Geneva campus of Webster and Thunderbird. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook, then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and Special Programs. Michael Sakbani has published over 140 professional papers. and coauthored six books. in 2020,2021and 2023the "inteloigent Economist electzed michael.sakbani@blogspot .com as one of the top 100 blogs in trhe world.

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  The State of the US`Presidential Race; an Essay 

                   By

         Dr. Michael Sakbani 

 It is now a month since President Biden abandoned his bid for re-election. It feels like six months, for the race has dramatically shifted. Over the past 8 months, it has become apparent that President Biden is not in a physical shape to carry on for 4 more years. The fellow has some neuro -problems, which to his bad luck, come with age. Age and mother- nature simply cannot be resisted. After the debate, it became clear that he is not a viable candidate. Mr. Biden was trailing Trump in the crucial 8 deciding states and further, in 9 more states, which are traditionally democratic, he was either tied or behind Trump. It was a hopeless race as far as 85 percent of the Democrats were concerned. 

When Trump was wounded in the Republican Convention, his raised -fist -photo was the victory emblem etched in every democrat`s  thought. The Democratic Party, which is really a collection of elements often undisciplined, was facing disaster in the Presidentioal and in the Congressional and the states`races. This is when the capable politician Nancy Pelosi, the two Congressional leaders, and behind the scenes, President Obama, stepped in to convince Biden that he cannot win. Biden finally faced the data and in anger folded by grace, he decided to abandon. 

There was no time in late July for an open convention. After Biden endorsed Harris, the potential contenders, all endorsed her. In effect, she becames the proclaimed candidate. She was indeed an accidental choice, a lucky politician at the right time and place. 

 So, who is Harris, the official Democrat candidate now? 

The only clear record we have is her attorney generalship of California. In the US`Senate, she was a tough interrogator but not an accomplished US `senator. In her Presidential bid in 2020, she ran with her sister a failed and confused campaigne. In the Vice Presidency, she was a loyal untested. persona. This unknown, when she had the role to play, turned out to be incredibly energetic, a good speaker and a successful fund - raiser. So far, she has been flawless. She chose a complementary VP who balances her Californian background, and is a white Santa Claus from the Midwest with no further ambitions. She brought joy and enthusiasm to the scene. The question is could she beat Trump? 

So far, she has succeeded in energizing the dispirited Democrats. Her gains in the polls, however, are not from convincing independents but from solidifying the Democratic base. The whole question is whether she can enlarge her support to include independents in the battle-ground states. Trump has a solid low floor of 43 percent of the likely voters but a high of only 47 percent. Historical data show that the democrats must go somewhere around 52 percent in the national vote if they were to win the Electoral College. For this to happen, she must present a program of a change and hope to convince the independents and the young thereby enlarging her appeal. The Democrats always win when they present a change: FDR, Kennedy, Bill Clinton and, Obama. 

 The polls in the battle- ground states, except Nevada and Georgia, are now showing her with 1-3 points lead.  But her lead is within the statistical sample-error. Nevertheless, that is a vast improvement over Biden who was behind by three points in Pennsylvania, in Michigan and in Wisconsin, and much more behind in the other four states. She has reversed the other threatened states and given the party a hope to win Congressional and downstate races. This is a true achievement. If she can win Pennsylvania, Michigan, and Wisconsin, she would clinch the 270 Electoral votes. 

What is her catalog of policies to convince voters? More precisely, how can she, the incumbent VP, differentiate herself from the unpopular Biden and claim she is a candidate of change. There are several issues in my opinion on swhich she has to show her own voice. 

The Economy
 Issue number one is the economy. Biden has a solid economic record. He has created 16 million jobs in three years. He brought down the inflation rate from 9.5 percent to 3 percent. He invested in climate the bigest sum in history. He invested billions in infrastructur, the semi conductors chips, and brought back 800,000 manufacturing jobs. However, the state of the economy has not hit the kitchen-table issue of the level of the cost- of -living. High cost of living has hit all American budgets. Harris must explain the difference between inflation and the level of the cost of living. She has to bare-out where the rise of the cost of living is coming from and what she can do about it. 

Several sources, not all of which anyAdministration can control, are at play. The war in Ukraine which pulled up the prices of grains, oil  and fertilizers. Ukraine and Russia account for 31 percent of the world imports in these staples. Corporate gouging as attested by the record profits of food monopolies is another source. Since COVID 19, the economy is still affected by the supply-chain problem. And this problem is now aggravated by the Houti`s armed actions in the Red Sea. 

The federal Reserve hiked the interest rate by 500 basis-points to stop inflation. Furthermore, the cost of child care balooned after the expiry of the child-support act. All of these varied factors converged on the level of the cost of living.

There are three other sources that are endogenous economic policy factors. Both the Trump and the Biden administrations committed economic -policy errors. Trump cut the tax rates on business and the wealthy, which produced no down-trickling effect on investment; the resultant billions of tax-savings largely went into wealth accumulatiomn and buying own- equities. Biden injected billions of Government spending into the economy, but could not finance that by his proposed tax increases due to Congressional opposition. In other words, the two Administrations for different reasons, indulged in massive, non- financed deficit spending injecting billions into circulation.

Another cost of living issue is the unaffordability of housing. This is due to two factors: the low supply of new housing and the high cost of mortgage. While it is the Federal Reserve that caused the high mortgahge rates, it is the excess demand for housing in the cyclically depressed construction industry that has caused the astronomically hgigh prices of housing. 

what can Harris do?

 She can suggest important  government participation with the construction industry in building millions of new houses. She can give tax credit for new house owners and for new house construction.

 

The border 

The second issue is the border. Biden has been permissive on the border. She should outline a tough program to deal with asylum seekers and to reform the immigration system. Trump sabotaged the bi-partisan bil on the border, because he wanted to use the issue against the Democrates. a good suggestion is to reintroduce the bill after she wins.  She has expressed herself in favor of that. In this regard, it should be observed that the US in 2024 is not in the same situation as it was in the 19th and early 20th centuries. Immigration ought to be related to the economic social, and cultural needs and imperatives. Otherwise, it will face populous resistance.

The war in Gaza

 The third issue is Biden`s Zionist stand on Israel. She has problems there, she is married to an Israel supporter, and is dependent on Jewish money. She can camoflged her bias by pushing for a ceasefire and promising a modicum of US toughness on Israel. The US laws are clear that conditions must be attached to the use of US weapons and aid. Only Israerl has been left of the hook on that. It is a common belief that Israel security is bound up with the Palestinians` security. Thus, advocating seriously a two state-solution is a hard-headed position supported by many Israelis. And that is an issue -celebre for states like Michigan and Georgia , as well as for the youth votes.

It is obvioujs trhat Biden`s policies about Israel have produced no rersults.it is high time to change them.

The basket of false Republican assertions

The fourth issue is a basket of false Trump assertions. She should hit him on crime, which was higher during his term. The Republicans in so many states have been against voting rights and against any sensible gun.controls. Trump himself has expressed nefast views on Democracy and the US` constitution. He had received authoritarians like the Hungarian primer minister in his own home, and he counts Sissi of Egypt, Putin of Russia,and Polsinaro of Brazil among his friends. 

A common false claim is that the US had better economic situation under Trump, and thus, he had good economic opolicy record. Biden received from Trump a US`econmy with the higest rate of unemployment since the Great Depression. Investment and productivity were in deep decline. Many induistries were on the verge of collaps. The US balance of trade and services was much more in deficit than when Trump came to power. His promises of bringing back manufacturing jobs were not proven by actual data.

Other Issues

VP Harris has championed women issues. She should continue her advocasy of women control over their bodies and Trump`s role in the Supreme Court`s reversing of Roe.v.Wade. Today, in 26 states, women are not allowed in any meanigful way to control their bodies. Trump is responsible for appointing 3 USSC justices that reversed the law of the land. 

 She has now the edge in women voting and some but not all, of the youth voting and will be overwhelming in minority votes. She should think of the vote of white males on these issues and tempt to narrow the edge of Trump by assuring the reasonable centrists. If she is a strong -headed politician, she should show that she is not Biden on most of these issues. Will she, the incumbent VP, be skilled enough to find her own voice, and in the process, convince the voters that she is a candidate for the future? 

One of the key findings of the 2020 voting was that 50 percent of the youth did vote, and the majority went to Biden. In the present campaign, there are 5 million more young new potential voters, the majority of whom can be moved towards the Democrats. In this respect, the Dewmocrats seem to have neglected the male side of the young voters, a group that has problems not addressed by both parties. But the young are suspect; they might not vote. If Harris can incentify them to vote, that would give the Democrats an unequivocal win. 

Foreign Policy Issues

Foreign issues do not usually figure among the important election issues in the US. But Harris can expose the fantasy falsehoods uttered by Trump on ending the war in Ukraine in 24 hours. Trump has misguided transactional views on NATO and on the usefulness of allies. Without allies, the US is only 23 percent of world economy, while with allies the west approaches 60 percent of the world economy. 

Isolationist pèolicies are not in the interest of the US. Furthermore, the US financial position and the US`dollar position in particular, will be adversly affected by such policies. 

 If I were to bet, I would say it is now becoming more an election for Harris to lose than for Trump to lose. Can she sustain her present momentum to win? Can she convince the voters that she is a candidate for the future?