The midterm map says America will turn right

The pioneering 20th-century Kenyan aviator Beryl Markham put it well in explaining the intellectual usefulness of maps: “A map says to you, ‘Read me carefully, follow me closely, doubt me not … I am the earth in the palm of your hand’.” And for all the fog obscuring the outcome of the 2022 US midterm elections, we have a clear map to guide us to the outcome if we simply decide to use it.

There is a lot we can already glean. First, historically, the party out of power two years after a new president is sworn in almost always does well, as “buyers’ remorse” sets in regarding the new administration. The simple fact is that there have been only four midterm elections out of 38 since 1870 in which the party holding the White House either gained seats in the House of Representatives or had a net loss of five seats or fewer — the very limited number that would cost the Democrats their current majority. This historical navigation point alone means the House is likely to shift to Republican control.

Second, the phrase most associated with the legendary former Democratic House Speaker Tip O’Neill — “All politics is local” — has been proved almost entirely wrong over the past generation; in fact, it’s national, not local. The single biggest determinant of House outcomes is the sitting president’s approval ratings. Again, as we have said before, a president with an overall approval rating above 60 percent can dictate to Congress his wishes; one with an approval rating below 40 percent is trying to squash rumors that he is dead.

According to RealClearPolitics’ most recent polling, the hapless Joe Biden is limping along at 43 percent, a number that does not augur well for Democratic hopes in the House. Adding these two navigation points together on our intellectual map, look for the Democrats to lose between 25 and 35 seats in the House, and for the Republicans to take control.

Third, while House races have become nationalized over the past generation, Senate races remain stubbornly idiosyncratic, with outcomes instead based on both the specific character of the candidates and the nature of the state itself. With a third of all Senate seats up for election in 2022, the Democrats also have the luck of the draw this time around. They are not defending any Senate seats in states carried by Donald Trump in 2020. Further, the Republicans must defend 20 seats, limiting their chances to make large gains, while this cycle the Democrats are defending only 14 seats. For these highly specific reasons, Democratic losses in the Senate will be fewer than in the House.

However, fourth, the primary issues the campaign has been fought on — the intellectual terrain of the political contest — have greatly favored the Republicans. November’s latest CNN poll finds the economy the overwhelming issue for most voters, with a majority 51 percent saying it is the most important policy area affecting them. Abortion — after the Supreme Court struck down Roe vs Wade and returned decision-making on this contentious social issue to the states — comes a distant second at just 15 percent.

A September NBC poll confirms our navigational data point, listing the top four issues as the Economy, the cost of living, abortion, and crime. Republicans have a decisive 23-point advantage over Democrats in terms of handling crime and 19 percent on the economy.

Voters overwhelmingly blame the Biden administration for the worst surge of inflation in over 40 years, after it ruinously spent trillions of dollars on social programs even as the economy quickly returned to pre-pandemic levels. Too much money chasing too few goods has been the largest factor leading to the price spike, in which adjustable mortgage rates topped 7 percent and the price of staples such as beef and gas skyrocketed. Grocery prices overall have increased by an uncomfortable 13 percent since Biden’s inauguration.

The economy, the cost-of-living crisis and the surge in inflation are voters’ greatest concerns, and the White House is who they blame. RealClearPolitics June polling shows a dominant 64 percent of those surveyed disapprove of how the president is handling the economy. This is simply killing Democratic chances to retain the 50-50 Senate.

Fifth, we know the states to watch on election night. Ohio, North Carolina, and Wisconsin are all narrowly trending Republican; buck that trend in any of these and the Democrats have a real chance to hold the upper chamber. However, New Hampshire, Arizona, and Pennsylvania have all been narrowly trending Democratic. A loss in any of these and it is going to be a long night for Joe Biden’s party. Control of the Senate may once again come down to Georgia, as it did in 2020. There, if any candidate fails to obtain 50 percent of the vote, there will be a run-off in a month’s time to determine the seat, and quite possibly the Senate majority.

Given our intellectual map, however, the midterm outcome is surprisingly clear. My firm’s final prediction is for the Republican Party to take the House by 25-35 seats, and the Senate more narrowly by a one to three-seat margin. The GOP is going to be back.

This piece was originally published in Arab news.

US Republicans challenge the foreign policy ‘blob’

In my experience, the widely quoted adage about America’s capital — “You want a friend in Washington? Get a dog” — makes a fair point; imagine a city populated entirely by high school student council presidents. Nevertheless, in my glory days in D.C. I managed to buck the odds and acquire a number of great colleagues who I have remained close to over the 16 years I have run my political risk firm.

I’ve just checked in with them over a marathon week, with 16 intensive meetings in five days. This concentrated process is by far the best way to take a mental snapshot of what is really going on in what remains the most important country in the world.

There are two major political risk takeaways from the week. Point one is that the current Western unity over the Ukraine war is misleading. It was pointed out to me by many that there are three strands of Western thinking on Russia, and they do not strategically agree.

First, the Eastern Europeans and the UK (for rather odd and specific reasons) want to roll back all Russian gains at almost any cost. But it is also true that of the three strands, those advocating total rollback are geopolitically the weakest.

Second, the Biden administration finds itself in a balancing position, writing Ukraine a series of blank checks, with the US having no specific war aims of its own but working hard to limit the conflict. The Biden team have a studied aversion to the no-fly zones that Western hawks are screaming for, as they could lead to a direct confrontation between superpower America and great power Russia — a breach of the “Kennedy Rules” that nuclear powers do not ever directly fight one another.

Third, European Council on Foreign Relations polling makes clear that Western European publics increasingly favor “peace” (the war stopping now so as to stem the looming tsunami of the cost-of-living crisis and rampant inflation brought on by Europe’s feckless energy policy) over “justice” (Ukraine regaining every yard of its territory, but at great economic cost to the continent).

In other words, there is trouble ahead for the Western alliance over the war, as strategically these fundamental differences become apparent to even the dimmest analyst.

Beyond the coming possible schisms in Western unity over the war, there was a second, vastly underreported takeaway from my fascinating trip — namely the coming rejuvenation of the Republican Party in foreign policy terms.

In Washington I met with every branch of foreign policy opinion formers for the GOP. They included the Heritage Foundation, the largest think tank in the world and the most important on the right in the US; the Congressional Research Service, Congress’s own in-house think tank; the over-arching and increasingly powerful Stand Together Alliance, which unites the Jeffersonian and Jacksonian wings of the GOP around a realist orientation; and two venerable establishment pillars, the Center for the National Interest and the Atlantic Council. I also had private meetings with senior foreign policy grandees. All the above testified to the fact that there is a revolt catching fire in the party to do away with its longstanding links to the foreign policy “blob,” the disastrous, overly interventionist elite that gave us the Iraq and Afghanistan wars.

It is far less likely the Republican Party will remain linked to the discredited foreign policy establishment if it comes back to power in 2024, as it is embracing a new, more skeptical and realist orientation, having under Trump jettisoned from positions of power in the party the fantasist, hyper-interventionist neo-conservatives who futilely and fatally wanted to impose democracy around the world — nation building at the point of a gun.

In essence, this new realist alliance between Jeffersonians (the Stand Together Alliance) and Jacksonians (Heritage) is fused around a more realist orientation, whereby the GOP is no longer content to serve as the junior interventionist member of the Washington foreign policy establishment, in lockstep with the liberal Wilsonian hawks who perpetually dominate the Democratic Party. Instead, they believe the US should focus its strategic engagement in regions where its primary interests are at stake, as in the Indo-Pacific, the source of most of the world’s coming economic growth and much of its political risk peril.

For them, Ukraine is a sideshow, and a terribly expensive one at that — obscuring America’s necessary pivot to Asia. It should be supported, but with clear limits to that support, as the US cannot care more about European security than Europeans do. At present America is responsible for about 70 percent of the military wherewithal heading to Kyiv, while Germany does as little as possible. While Biden is spending tens of billions of dollars on secondary-interest Ukraine, what should be the obvious, overriding focus on the Indo-Pacific is being lost. What I learned in my fascinating week in D.C. is that at last the karmic wheel is turning, as the Republican Party forsakes its disastrous adherence to the foreign policy blob and rediscovers its precious realist heritage.

This piece was originally published in Arab News.

Biden’s political comeback much less than meets the eye

Washington insiders read polls like the rest of the country looks at baseball scores: Relentlessly, daily, obsessively. A politician’s “numbers” are akin to understanding his political health. A basic rule of thumb is that any president with an approval rating over 60 percent can tell Congress what to do and be pretty sure to get what he wants, so great is his sway with the public. On the other hand, a president with a rating below 40 percent must spend his time trying to squelch rumors that he is dead.

So, on its surface, it is notable that President Joe Biden’s recent numbers tell of his survival from a near-death political experience. Following months of intraparty Democratic bickering, the White House’s signature “Build Back Better” initiative — a multitrillion-dollar bill stuffed with progressive wish-list items like universal preschool and free community college — fell victim to both Senate moderates (such as Joe Manchin of West Virginia and Kyrsten Sinema of Arizona) and the alarming resurrection of inflation. In the wake of this ignominious defeat, Biden had only a 40 percent approval rating in RealClearPolitics’ aggregation of presidential polls. The president found himself on the cliff-edge of continuing relevance.

Recently, however, things have begun to look up politically for the White House, as Biden’s numbers have slowly but clearly edged upward to about 43 percent approval; far from great, but trending away from the writing off of his presidency. Two seminal factors explain the marginal improvement: The abatement of COVID-19 and the advent of the Ukraine war.

In the case of the first, after two grim years of lockdown, death and economic stultification, at last things seem to be returning to something approaching normal, with the children back in school (if still too often masked, in defiance of “the science”), parents back at work and commerce picking up. The fourth quarter of 2021 saw US gross domestic product increase 0.5 percent, 1.7 percent quarter-on-quarter, and the American economy enjoy its best year as a whole since 1984, growing at a robust 5.7 percent. While these impressive numbers are contextually a reaction to the deep dive the US economy took just before as a result of the pandemic, they do signal a very welcome return to economic normality.

At the same time, the Biden of old has reemerged as a result of the Ukraine crisis. Measured, moderate and clear-spoken, the president has made it obvious that, while he supports the hard-pressed Zelensky government in Kyiv, he is sensibly not prepared to risk widening the conflict by adopting a dangerous no-fly zone over Ukraine. Following his lead, and despite Volodymyr Zelensky’s impassioned pleas, NATO has unanimously followed suit.

Biden’s pro-Ukrainian tilt, then, has its limits. While genuine, it is secondary for the president to containing a possible escalation of the war. Beyond being strategically reasonable, Biden’s position is where most Americans are regarding the conflict. The war has reminded US voters of the “safe pair of hands” they thought they were electing in the first place, before the Biden White House came to be hijacked by the left wing of the Democratic Party.

But it is far too early for White House staffers to be quaffing champagne regarding Biden’s political comeback, as a number of overexcitable commentators have done. For one thing, a three-point “bounce,” while better than a drop, hardly amounts to a sea change in how the American public views the president. A March 15 Wall Street Journal poll confirms this. Only 29 percent of US voters think the president will run for reelection, with a dominant 52 percent believing Biden will call it quits after only one term in office.

If Biden were to run and win again, he would be 82 at the time of his second inauguration, by far the oldest man to have held the most demanding job in the world. Given his increasingly stiff gait, often rambling answers to questions and abject forgetfulness, it is unkind but true to note the president has lost a step over the past few years. The world seems dangerous, complicated and demanding. A large majority of the American people do not think Biden is up to a second term.

Beyond the personal, one issue above all has reared its ugly head, stifling the prospects for Biden’s comeback. As this column has long worried about, it is now increasingly clear that the beast of inflation — long cowed by the resolute actions of former Federal Reserve Chairman Paul Volcker and President Ronald Reagan — has slipped its restraints. Inflation increased to an eye-popping 7.9 percent year-on-year in February, the highest level in fully 40 years. Food, rent and fuel costs were dangerously climbing even before the Russian war has made an energy price shock a reality.

As the world looks increasingly like the dreary 1970s — stuck in a stagflation of low growth, high inflation and decreased living standards — Biden is sure to be blamed for this, just as Jimmy Carter was in 1980. Biden’s uptick in the polls is a blip, not a salvation. Instead, longer-range forces are bearing down on the White House, making it likely that, one way or the other, Biden is merely a one-term president.

This post was originally published in Arab News.

Why Biden’s domestic agenda is already dead

The modern American presidency, like water, always runs along the path of least resistance. Once a president’s window to enact domestic legislation closes — as it invariably does at some point in his first term — he then shifts course, setting his sights on foreign policy. Constitutionally, this amounts to far more fertile ground, as America’s founding document gives the executive branch a great deal more power to conduct foreign policy than it does domestic policy.

Historically, this process has happened even to presidents with significant domestic achievements to their name. For all the brilliant overall luster of his presidency, it was during Franklin Roosevelt’s first 100 days in office that the lion’s share of the “New Deal” programs to combat the Great Depression were enacted. Likewise, following his landslide victory in 1964, Lyndon Johnson’s seismic civil rights legislation (and the formulation of his “Great Society” domestic programs) came early on in his term. The same holds true on the right. Ronald Reagan’s landmark tax cuts came shortly after his victory over Jimmy Carter in 1980, but before the midterms of 1982. More recently, Barack Obama’s signature healthcare legislation, “Obamacare,” came about after his famous electoral win in 2008 and was the first and last major piece of domestic legislation he got over the line.

So, in this larger historical sense, what is presently happening to Joe Biden comfortably fits into the overall historical narrative of the modern American presidency. Presidents achieve their domestic legislative successes early and then — once that political avenue has been halted — like water, move along the path of least resistance to focus on foreign affairs. Nevertheless, the speed of Biden’s domestic legislative decline is as striking as it is unusual.

Following his electoral victory in 2020, Biden rode a year-long wave of domestic political success, enacting both the trillion-dollar COVID-19 emergency legislation and his bipartisan infrastructure plans. However, the even more expensive progressive wish-list bill, the Build Back Better plan, fell afoul of two immovable objects: Ideological tensions within the Democratic Party and a dramatic change in circumstances due to the stratospheric rise in inflation.

Since the Democrats swept to power in both houses of Congress and the White House in 2020, there has been an endemic structural tension between Biden’s maximalist domestic agenda (as he adopted much of the progressive left of the party’s desire for dangerously high rates of spending) and his scant majorities in both the House of Representatives and the Senate.

The upper chamber, split in half at 50-50 (with Vice President Kamala Harris there to break ties), left Biden entirely at the mercy of any single Democratic senator who was uncomfortable with the political direction the White House was moving in. As Biden tacked ever to the left, moderate Sen. Joe Manchin of West Virginia (and, to a significant but lesser extent, Sen. Kyrsten Sinema of Arizona) balked at the cost as well as the scope of Biden’s domestic agenda.

Late last year, the nonpartisan Congressional Budget Office made plain that, shorn of its accounting trickeries, the actual 10-year cost of the BBB plan would amount to $5 trillion, much higher than had been advertised. It was then that Manchin openly revolted, adamantly refusing to go along with such excessive spending.

Politically, Manchin has ample cover for his revolt. He is the last significant Democratic office holder in a state that voted for Donald Trump in 2020 by the overwhelming margin of 38.9 points, in what amounted to Trump’s second-strongest showing in the nation. In leading the charge against the leftist Democrats’ wish-list bill, Manchin was merely doing what his constituents unabashedly wanted him to do. Biden’s great error was in politically forgetting that, while the Democrats won slender majorities in Congress in 2020, the progressive wing of the party did not.

Beyond the politics, the incontestable fact that made Manchin’s opposition to BBB so successful was that, after an absence of 40 years, the beast of inflation has again been loosed on the American public. According to former Secretary of the Treasury Larry Summers’ sagacious analysis, worried about the effects that COVID-19 lockdowns might have on the economy, both the Trump and Biden presidencies primed the pumps, putting a further 14 to 15 percent of federal spending into the economy. Due to the fact that the US economy bounced back far more robustly and more quickly than had been thought, we have a situation wherein this vast amount of new federal spending has been visited upon an economy already roughly back to pre-pandemic levels.

Disastrously, the math being the math, rampant inflation can be the only result. True to form, in January, inflation increased to its highest level in 40 years — an alarming 7.5 percent year on year. Huge increases in the cost of food, electricity and shelter led the way. In such dramatic circumstances, Manchin’s protest against BBB merely looked sane, as the last thing the American economy needs is the gas of further spending poured onto the roaring fire of inflation.

For all these reasons — historical, political and economic — it is safe to say that Biden’s domestic agenda is well and truly over.

This post was originally published in Arab News.