Pew Research polling shows that Americans identify the economy as the most important issue in the presidential election; according to Gallup, Donald Trump is seen as better than Hillary Clinton on ability to guide the economy by a 53% to 43% margin. Let's develop that thought.
1. The obvious and undeniable: Trump is a businessman and Clinton is a career politician. There is nothing to build up on Clinton's personal resume, so the effort is to drag down Trump's - the lawsuit against Trump University; the bankruptcies; some other expose yet to come, maybe his tax returns. Trump doesn't have the breadth of experience or strategic perspective that Mitt Romney had with Bain Capital, but he definitely has been successful in a difficult industry in difficult markets - and internationally. He knows how to select talent, negotiate, and hold managers accountable. He has made a few billion dollars. His recent riff with the VFW that he would clean up the Veterans Administration rings true - woe be to the bureaucrat who fudges his or her customer service data.
2. Wall Street prefers Hillary. Some of this is obvious - Michael Bloomberg endorsed her; the Wall Street Journal is sounding like the New York Times in its coverage of the election; rich New York bankers have long been among the strongest supporters of the New York Senator; she has a long history of being bought - Whitewater; the Marc Rich pardon; the Clinton Foundation; her 91 speaking fees of $200,000 or more; the hedge fund that Goldman Sachs set up for her son-in-law. .
While Clinton's hard-earned reputation for dishonesty turns off many; with this constituency in this election, it is a cynical pre-requisite. Of course she supports the Democratic platform's call to break up the banks; of course she supports Elizabeth Warren's crusade against Wall Street; of course she agrees with Bernie that the system is rigged in favor of the millionaires and billionaires. No problem - she is a known quantity. The fix is in. Trump is an unknown who might actually do something to constrain the financial elite.
Maybe there was a time that people believed that what was good for Wall Street was good for Main Street, but certainly nobody makes that argument after the crash of 2008. Clinton sides with the lenders; Trump the borrowers.
3. The United States does have large economic issues. George W Bush and Barack Obama took the accumulated federal debt from 55 % of GDP to over 100 %. While the Republican Congress has constrained Obama to manageable annual deficits of about 3%, nothing has been done to rebuild the buffer which will be needed in the next major downturn, or when interest rates on the debt return to normal levels. Social Security and Medicare remain on a glide path to bankruptcy. Neither candidate sees any up-side in addressing the macro picture, so the question for the concerned voter is which candidate would be most likely to work with Paul Ryan to implement some form of his agenda. The logical answer is "the Republican", but it would be nice to see a nod in that direction.
4. The Obama meme - Michele and Barack - is that Trump's "Make America Great Again" slogan is off base. The country is doing fine; GDP is growing; unemployment is down; the stock market is up. Here's the great disconnect between the establishment economists and the real people - the median family income of about $54,000 is some 7% below what it was when Barack Obama assumed office; during the "Obama recovery" nearly 15 million people have dropped out of the labor force, yielding the lowest workforce participation rate in 38 years; prudent retirees who are trying to live on bond income are earning well less than the rate of inflation. Real people understand - some 24% of Rasmussen's survey participants think that we are on the "right track". Advantage Trump.
5. Trump's signature issues - foreign trade and immigration - are largely economic. On most tax issues either candidate will have to work it out with Congress and there probably isn't much difference which is elected - taxing hedge fund managers on "ordinary income" rather than "capital gains"; lowering the corporate tax rate to be more competitive internationally; a few points movement on tax rates for most individuals. The issues where Hillary has been pulled to the left - free college; a step toward universal health care - are dead on arrival with the Republican Congress which promises to last until at least the 2020 election.
To a large extent the Clinton and Trump campaigns bob along on the surface while the currents below determine the direction. A collapse such a that which doomed John McCain in 2008 is highly unlikely, Janet Yellen will do everything that she can to help, and the Clinton-oriented media will continue to tout the good data while dismissing the bad as aberrations. But in the wisdom of James Carville's "It's the economy, stupid", the strength of the Trump movement and the "wrong track" polling suggest that the people understand.
This week's video is a stark reminder of how little Hillary Clinton (and Barrack Obama) understand about how jobs are created.
bill bowen - 7/29/2016