In Brief
- Hawaii under attack! By Trump?
- Don’t get your hopes too high, but negotiation and the Olympics are the next steps on the Korean peninsula, not war.
- Trump’s language? Often unwise!
- Gallup Poll— for entire year of 2017– 42% Independents; 29% Democrats; 27% Republicans. Democratic landslide in November 2018? No indication of that from this key metric.
- Oprah for President in 2020? A sloppy ill-timed announcement.
- Steve Bannon fired at Breitbart.
In-Depth
What’s Important
N Korean Threat
The change over the last two months has been dramatic. Back then Trump and Kim were both blustering, and Kim was shooting missiles all over the place—clear threats to the US, Japan, S Korea and others.
Now, negotiations lead the news and both Koreas are going to participate in the S Korean Olympics, something few thought possible even weeks ago.
Don’t get your hopes too high that the core issues have been resolved. They have not been, but the dynamics have shifted substantially against N Kores and Kim and positively for the US and Trump.
How so…
Several weeks ago, I posited that war between the US and N Korea was possible but not likely as it would be a catastrophe for both and Kim Jong-un would lose the things most treasures by him—luxuries, dynasty and life.
Since that time, the threat has receded noticeably because of a series of inter-connected events.
- China has greatly tightened the economic screws on Kim, cutting off his transportation fuel as well as slashing total exports to him by half. The US and UN sanctions are working.
- Moon Jae-in, President of S Korea, offered talks to Kim after Kim’s New Year’s Day speech was partially conciliatory.
- The talks were not totally successful but mostly so. The N Koreans, very unexpectedly, have agreed to participate in S Korea’s February Winter Olympics. This is a hugely positive outcome made possible by President Trump’s willingness to push-back the starting date of the annual US-S Korea wargames until after the Olympics are completed. To quote the very liberal Moon…” I think President Trump deserves big credit about the inter-Korean talks.” …” It could be resulting [sic] work of the US-led sanction and pressure.”
- There have been no more ballistic missile tests.
None of this means the problems are solved or US pressure on N Korea or China should weaken. Strength got us to this better situation.
Trump, China and Kim are still the keys.
Elections 2018
US Partisanship
The best predictor of how people will vote is their partisanship—R, D or I. Know that, and 85% of the time you can accurately predict their vote in a major race.
Pundit after pundit is predicting a big Democratic victory in the November Congressional elections. Of course, these are the same folks who wrote off Trump and the Rs in 2016.
My prediction is that the Rs will lose House seats but not the majority, and that the Ds will lose Senate seats as they have 14 vulnerable seats and the Rs just 2.
I’ll update that prediction regularly right up to election day. I’ll also write numerous stories describing what each of the parties has working for and against them.
But, today just one metric to report. On Jan. 8, Gallup released its annual report on US partisanship for all of 2017 as well as prior years. In 2017, 42% of Americans describe themselves as Independents, 29% as Democrats and 27% as Republicans.
Now, take a look at the Gallup numbers since 2006 and the election results for the even numbered years.
| Year | D% | R% | D-R% | Election Outcome |
|---|---|---|---|---|
| 2006 | 34 | 29 | D+5 | Ds big winners in House and Senate |
| 2008 | 36 | 28 | D+8 | Ds big winners in House and Senate; big Presidential win |
| 2010 | 31 | 28 | D+3 | Rs big winners in House and Senate |
| 2012 | 31 | 28 | D+3 | Ds make small House and Senate gains; Obama re-election |
| 2014 | 30 | 26 | D+4 | Rs big winners in House and Senate |
| 2016 | 31 | 28 | D+3 | Rs small House and Senate losses; Trump election |
Note several things. The Ds always lead the Rs among US adults. Who actually turns out to vote is a different story and the reason Republicans win at times—better turn-out of their voters in some years.
When the Ds have a 5% or higher lead on this metric, they do well. When the Rs trail by less than 5%. they do well, or it is a draw.
Going into 2018, the parties are in a virtual tie on this indicator.
I won’t present the data because the conclusions are the same, but Gallup also provides, in the same report, the data where the Independents go when pushed to say whether they lean toward the Ds or Rs. Substantively the results show the same pattern—the Ds always ahead, but requiring a large lead to do well in the Congressional races.
Bottom line—watch this indicator throughout 2018. So far it indicates an election year without massive change in either direction.
Media
Bannon Out at Breitbart
Steve Bannon was fired by Breitbart losing his last major power-base. He took on Trump and got slaughtered. There is a message in that for others.
He also unified and strengthened the Republican Party and Trump’s control of it. Bannon’s maneuvers and failures have effectively greatly weakened the party’s extreme right. That empowers Trump and the core of the party, which he now clearly leads.
The Never-Trump wing of the party still doesn’t like Trump, especially his style, but they are starting to recognize major domestic and foreign policy successes and will either come on-board or just leave the party.
Overall, Trump now has a very high level of control and the Republicans are far more united going into 2018 than are the Democrats. The D disarray will become very visible when primary season is upon us in the spring.
30 Day Tests
Don’t forget the Tuchfarber 30 Day test—when you get upset about something in the news ask if it is likely to be IMPORTANT IN 30 days or so. Only seldom will it be so, and you can usually ignore it.
Global Economics
US Oil & Gas Production
The US-EIA just projected US oil production increasing from about 9 million bpd now to 11 million by the end of 2019. This will be the largest production level in US history, by far.
They also project substantial increases in US natural gas production, allowing more replacement of coal and a resultant decrease in CO2 emissions.
China’s Politics and Economy
China Watch
- NEW—China just announced a record trade surplus with the US. All await Trump administration sanctions by the US against China on a number of different products.
- Reuters reports…” China’s leaders fret over debts lurking in the shadow banking system. The complex lending hidden in the shadow banking sector compounds the threat posed by China’s rapid accumulation of debt. Economic pain from a string of defaults would present a challenge for a one-party regime that draws its legitimacy from the promise of prosperity.”
- During its key Central Economic Work Conference held Dec. 18-20 the Chinese leadership declares “war” on financial risk, poverty and pollution. China’s debt load is crushing, most of its citizens live in poverty or modest means, while many in the rich provinces thrive. And pollution is a major health and political hazard.
- China is placing its para-military police under the direct control of General Secretary Xi giving him even more extra-ordinary power.
- Next spring China is likely to modify its Constitution to allow Xi to serve more than two terms as President.
- The ambiguity, contradictions and risk of China’s economic policy is illustrated by two contradictory policy statements last week. On 12/20 the WSJ reported President Xi’s Economic Blueprint for 2018 stresses debt reduction less. Two days later Reuters reports that “China curbs lender-trust cooperation in fight against shadow banking “curbing a trust industry that has grown five times in five years to $3.51 trillion in an “industry which helps channel deposits into risky investments via products often designed to dodge capital or investment regulations”. China wants it both ways…continuing high growth and societal stability but also reining in the debt creation that created the high growth. The two are incompatible and a crash is guaranteed with only the timing in doubt.
- The fragility of China’s companies is illustrated by two headlines from last week, both from the WSJ. In the first, “HNA Seeks to Sell U.S. Properties: Chinese conglomerate to raise cash to pay off debt that funded acquisitions”. This is the same company the Chinese government is reining in. The other headline is “China IPOs in U.S. Aren’t Panning Out”.
- The International Monetary Fund [IMF] reported recently that China’s banks have insufficient capital to weather a credit or debt crisis. The problem is widespread but especially focused in the rapidly exploding “wealth management “arena and in the broader shadow banking arena where the authorities have not been able to keep up with “innovative” approaches by a variety of financial actors.
- China is becoming more and more authoritarian, forcing its tech companies and US tech companies to monitor Chinese citizens and make the results available to the government.
- The US and Europe are increasingly unwilling to let China flout the World Trade Organization rules it pledged to abide by when admitted is 2001.
Musings
Trump Language and Posturing Politicians
We may never know what Trump actually said this week at the negotiating session over DACA and immigration. It will make little difference beyond the next week or two.
There is little doubt Trump used language offensive to many and inappropriate for a President in a “public” setting.
Senator Durban’s [D-IL] version should be discounted as he is a well-known liar. The political posturing by many Democrats and Republicans illustrates why most of the public don’t like or trust them.
Hawaii Under Attack
Isn’t it amazing that President Trump had the ability to make Hawaii officials mistakenly issue a nuclear attack warning?
Isn’t it amazing that President Trump is responsible for N Korea’s nuclear threats against the US that go back more than 25 years before he became President?
What an amazing man with amazing powers!
Opinion & Commentary
Oprah for President?
As a political strategist and campaign manager for almost 40 years I chuckle at those who now are advancing Oprah as a 2020 presidential candidate. She has great name recognition and has been an enormous financial and media success story.
And…if Trump can do it why can’t Oprah?
All of that is true but let’s face some facts.
Oprah is now a political target. Advancing her ineptly and too early, as now, hurts her. She is already the target of #Me Too backlash… claims she has been part of the problem—and, the pictures of her kissing Harvey Weinstein. She is now a target for media folks who dislike her, in addition to the Republicans, and numerous Democrats who have other favorites for 2020. Where does Oprah fall in the Progressive v Traditionalist war in the Democratic party? Is she ready to handle the questions that are inevitable and have no answers that will satisfy both sides in the war?
Is she ready for detailed questions on DACA, N Korea and the Tax Bill?
“Nasty Trump” gets away with saying politically incorrect things. Is “Sweet Oprah” ready to be “politic” 100% of the time, like Mitt Romney had to be but couldn’t quite make it.
And, don’t forget there are already over 30 names in the 2010 Democratic hat with many more to follow.
Until next week…
Al Tuchfarber
Professor Emeritus of Political Science, University of Cincinnati