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Saturday, November 28, 2020

ExplainSpeaking: Be it elections in Bihar or the US, ‘it’s the economy, stupid’

Joe Biden seems set to take the White House but there are reasons why Donald Trump may surprise yet again

Written by Udit Misra , Edited by Explained Desk | New Delhi | Updated: November 6, 2020 10:25:44 am
An Indian artist makes paintings of President Donald Trump and Democratic rival Joe Biden in Mumbai (AP)

Dear Readers,

Bihar’s state Assembly election is already underway. It has already been dominating national news and will likely continue to do so in the coming week. But, at a global level, perhaps the more keenly watched election is for the Presidency of the United States.

Republican candidate Donald Trump surprised everyone in 2016 when he defeated Democratic Party rival, Hillary Clinton. The former Secretary of State Clinton was the firm favourite with most pollsters giving her 80-85 per cent chance to win the election and become the first woman President of the US.

In the past four years, the Trump administration has done a lot of things that Candidate Trump had promised. This has been, at once, the cause of much exhilaration for Trump supporters and deep dismay for his detractors.

In 2020, again, most polls show that Trump’s rival, former Vice President Joe Biden, is likely to win. If that happens, Trump will become the first US President since George H W Bush (1989 to 1993) to lose re-election.

What is most uncanny, however, is how closely Bill Clinton’s 1992 campaign messages resemble those of Biden’s 2020 campaign.

When Bill Clinton defeated Bush Sr in 1992, his campaign had three key mantras.

One, “It’s the economy, stupid”.

Clinton tried to pivot on the economic downturn caused by the oil price shock in the wake of the first Gulf War. The Democrats have been trying to do the same this time around as well. Of course, the trigger for a downturn now is the spread of Covid-19. What makes it worse for Trump is the massive second wave of infections spreading across the country, especially the Republican states.

Two, “Change vs More of the same”.

Much like 1992, this is one of the central messages by Democrats. They hope the people have had enough of President Trump’s questionable approach and actions, which even saw him getting impeached. Biden proposes to undo (what he calls) the mistakes of the past four years such as walking out of the Paris Climate Accord.

The third key slogan was: “Don’t forget healthcare”.

Thanks to the pandemic, Democrats have been able to corner President Trump on his healthcare plan — or, to be precise, the lack of his healthcare plan.

So, is it game over for President Trump?

Far from it. Trump may stump pollsters yet again.

For one, Trump’s rise epitomises the sharp divisions in US polity. The American voters continue to be quite polarised. Unfortunately, this often implies voting along the party line — even when facts do not support one’s claims — just to spite the Opposition. For instance, according to a Pew Research Centre survey conducted between October 6 and 12, only 24% of Trump supporters thought that Coronavirus outbreak was “very important” — in stark contrast to 82% of Biden supporters.

Don’t miss from Explained | Why US Election 2020 matters to India

Policy positions of President Donald Trump and Democratic nominee Joe Biden on the economy and taxes. (AP Graphic)

Two, Trump is still the champion of those Americans who believe politicians such as Joe Biden and Hillary Clinton are untrustworthy. That explains Trump’s repeated claim that he has done more for the US public in 47 months than what Biden did in 47 years of being a politician. Trump’s unconventional manners continue to set him apart from the rest of the political class (across party lines) in the US.

Three, thanks again to his appeal, Trump may still come across as the more believable leader when it comes to protecting American interests from competitors such as China. For instance, it is not too difficult to see how American voters may absolve Trump of any blame for his inept handling of the Covid pandemic.

Fourth, and most importantly, Trump may be putting the slogan “it’s the economy, stupid” to better use than his rival.

It is noteworthy that Trump has been reiterating how under a Biden presidency, Americans will lose millions of jobs in the oil and gas sector because of Biden’s stress on addressing climate change. In the similar vein, Trump has been arguing that Biden’s desire to raise minimum wages is likely to hurt the small businessmen and women (who will possibly find it costlier to employ workers), and low-skilled workers, especially immigrants (who will find it more difficult to get jobs). Similarly, Trump argues that Biden is likely to raise taxes and doing so will push jobs away from the US. In Trump worldview, it is a choice between a “Trump super-recovery and a Biden recession”.

In other words, yes, it is the economy that might be the key to this election but it is an argument that Trump is making just as effectively (if not more) as the Biden campaign.

Don’t miss from Explained | How and why Donald Trump vs Joe Biden affects the world

Donald trump, US elections, US polls 2020 fight, trump-Biden fight, abki baar, trump sarkaar slogan, Man behind trump sarkar slogan, Shalabh Kumar, world news, Indian express In this Oct. 22, 2020, file photo Democratic presidential candidate former Vice President Joe Biden answers a question as President Donald Trump listens during the second and final presidential debate at Belmont University in Nashville, Tenn. (AP Photo/Morry Gash, Pool, File)

If there was one lesson from Trump’s first upset victory it was this: This is an election for the President of the US, not the leader of the free world. Since the Global Financial Crisis, more and more voters have made that distinction. And in an atmosphere of grave all-round mistrust, especially vis-a-vis China, there is no surety that the American voter has discarded that distinction. Thankfully, we would not have to wait for too long to know the answer after the voting is completed on November 3.

Coming back to the Bihar election, it is clear that the choice before the Bihari voters is not as stark as the one facing the American voters. After all, Chief Minister Nitish Kumar’s JDU and the main Opposition party, Tejashwi Yadav-led RJD, were close allies when they routed the BJP in the last Assembly elections in 2015.

Broadly speaking, Bihar has seen 15 years of Lalu Yadav’s RJD rule and 15 years of Nitish Kumar rule. As the Chief Minister, Kumar has astutely shifted his political stance several times over the past 15 years to fight both against and alongside all the main political parties in the state at different times. His genius has been that he has always managed to hold on to the top job.

Such a spread makes analysis of the key issues rather pointless. However, it might serve some purpose to just look at Bihar’s economy and where it stands vis-a-vis the rest of India (see TABLE; Source: Care Ratings).

READ | Quixplained: From jobs to a free Covid-19 vaccine, what parties have promised Bihar

Parameter Bihar as a percentage of India 

(or comparative India data)

Population 9%
Per capita Net State Domestic Product (2019-20) 34.7%
Rural Unemployment per 1000 persons (as per usual status) in 2018-19 102 

(India: 50)

Urban Unemployment per 1000 persons (as per usual status) in 2018-19 105

(India: 77)

Rice Yield per hectare as of 2019 (kg/hectare)  1,948 

(India:  2,638)

Pulses Yield per hectare as of 2019 (kg/hectare)  946

(India: 757)

Number of factories (2017-18) 1.5%
Fixed capital  0.6%
Bank credit to industry  (2019) 0.46%
Minimum wages for construction workers in 2019-20 88.6%
New projects announced (Rs crore)  3%
Number of units of Medium and small scale industries (2015-16) 5.4%
Investments by Medium and Small Scale Industries (2015-16) 1.3%
Passenger vehicles sold (2019-20) 2%
Two wheelers sold (2019-20) 5.5%
Per capita availability of power kw/hr  (2018-19) 287.3 

(India: 1028.9) 

Telephones per 100 households (2018-19) 59.95

(India: 90.1)

FDI Inflows (2019-20) 0.01%

As can be seen from the data, Bihar, which accounts for 9% of India’s population, has a long way to go in terms of even achieving proportionate economic success.

For instance, Bihar’s per capita economic output is just one-third of India’s. It has considerably higher levels of unemployment which is hardly surprising because it has very few factories and barely attracts any foreign direct investment. Low incomes result in low consumption levels as witnessed from car and two-wheeler sales.

It must be noted that even these low levels represent an improvement across all parameters — some more than others — since 2004-05, the year that splits the Lalu and Nitish years.  📣 Express Explained is now on Telegram

Bihar Chief Minister Nitish Kumar with Tejashwi Yadav in 2017. (Express Photo by Prashant Ravi)

The question that may eventually turn the election, albeit quietly: Is the pace of economic growth fast enough for this generation of Bihari voters?

Stay safe!

Udit

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