THE TUCHFARBER REPORT

Accurate Facts, Analysis, and Forecasts

In-Brief

1. Trade wars across the Atlantic…trade wars across the Pacific…trade wars everywhere. Strategy, chaos, or both?
2. Look to Monica Lewinsky, Bill Clinton, and his women for clues on how to handicap the potential political effects on Trump from the porn queen and other women.
3. China versus the US– cold war, warm war, or hot war? China is not our friend. It is a geo-strategic competitor on many levels and the relationship is fraught with risks.
4. Aggressive John Bolton replaces General McMaster at National Security Council in a signal of an even more hardline foreign policy.
5. Conservative, pro-life Democrat barely survives the progressives in the Democratic civil war.
6. An impressive March for Our Lives draws hundreds of thousands.
7. Chaos reigns as the massive and needed federal budget is passed.

In-Depth

Elections

The Porn Queen, Women, and Presidents

The title above is a bit strange for an article in a section on elections, but I think you will see how it fits.

I’m not going to judge the morals of anybody here. You can do that for yourselves.

I’m not going to judge whether “Stormy Daniels” or other women accusing President Trump or President Bill Clinton of wrong-doing are or have been truthful. You and others can make those judgements.

My focus is on the political consequences for Trump as various women make sexual accusations against him.

There is a great deal to be learned from the historic political consequences of the sexual accusations against Bill Clinton that will likely apply to Trump’s situation.

Let’s review facts and a bit of history:

• Bill Clinton had a “bimbo eruption” problem before being elected President, as well as during his presidency—think Gennifer Flowers, Paula Jones, Juanita Broaddrick, Kathleen Willey, and others.
• From November 1995 to March 1997, Clinton had a sexual relationship with White House intern Monica Lewinsky in the White House.
• The Lewinsky-Clinton story broke publicly in January 1998.
• Clinton’s approval rating in the December 1997 Gallup Poll, before that story emerged, was 56%.
• Three months after the story broke, in April, it was 63%.
• Throughout 1998, the Republicans unwisely planned Clinton’s impeachment.
• In November 1998, Clinton and the Democrats did something virtually unheard of in a 2nd term off-year election; they won seats in the November US House elections. Especially in the 2^nd term, the White House party nearly always loses dozens of seats.
• On December 19, 1998 the Republican dominated US House impeached Clinton, sending the case to a ”trial” in the Senate.
• In February 1999, the US Senate failed to get anywhere close to the 67 votes need to “convict” and remove Clinton from office even though it was clear he had perjured himself in federal investigations. [Clinton was later disbarred in Arkansas and the US Supreme Court because of the perjury.] Not one Democratic Senator voted to remove Clinton.
• Clinton’s March 1999 approval rating was 60%, with 35% disapproving.

I pursued this story because it is timely and because conservative friends were worried about the political effects of the accusations about Trump, while my liberal friends thought the revelations would destroy him.

The Clinton history suggests that is not likely the case.

Why is that?

First, neither Clinton nor Trump was thought to be a moral paragon by the voters before their elections. Both had well-known, sexually dubious pasts.

Second, deeply religious voters were well aware of the lifestyles of both before those voters decided whether or not to pull the lever for or against them in 1992, 1996, 1998, and 2016. I’m hard-pressed to make an argument why November 2018 will be different.

Third, Maxine Waters and other Democrats may want to take note that the impeachment of Bill Clinton turned him into a political martyr, strengthening him, rather than ruining him.

I would note, in fairness, that “#Me Too” has changed some things, but that there has been limited coverage of Bill’s abusive past, or Hillary’s enabling of it, since the Me-Too movement emerged.

The 2018 Congressional elections are not likely to be decided by Donald Trump’s sexual morality. They will be decided by the state of the economy, whether the US is in an unpopular war, the quality of the candidates the two parties run, and other things we don’t know about that are going to become salient.

Polls and Media

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.

The Democrats

Lipinski [D IL-03] Survives Progressive Onslaught

Dan Lipinski is one of a handful of “Blue Dog” Democrats left in the country. He is pro-life and generally much more conservative than his party. The Ds have generally moved far to the left of Lipinski. And, like Conor Lamb, who won last week in PA-18, he is now an anomaly.

By a scant 2%, Lipinski defeated a strong challenge from newcomer and “progressive” Marie Newman. He will almost certainly win in November; IL-03 is a solid Democratic district and an extreme rightist, Arthur Jones, whom the GOP leadership has rejected, won the Republican nomination.

The battle between Lipinski and Newman is emblematic of the civil war in their party between the traditional “labor Democrats” and the ascending “progressives.” This battle will be played out in many primaries this year and is similar to the battles between the Tea Party Rs and the mainstream Rs in 2010-2014.

The Democratic civil war will be nasty in 2018 but become really ugly and aggressive next summer in 2019 as the battle for the 2020 Democratic nomination for president heats up.

If you are a true “political junkie” pay close attention to these internal Democratic battles in the primaries. Also, pay attention to which party turns out more of their voters in the primaries, in competitive states this year.

Trump and the White House

Bolton In – McMaster Out

Former UN Ambassador John Bolton is in as Director of the National Security Council replacing General McMaster in that role. Both are skilled, smart professionals.

John Bolton is very aggressive in his foreign policy positions, substantially more so than McMaster. That fits Trump’s temperament and priorities better but may beg for some other moderating voices.

But aggressive voices, articulate public ones, which Bolton is, may be what Trump wants as he extends a foreign policy strategy that includes almost always being on the offensive.

Tuchfarber Global Political – Economics

China Watch

What is the fundamental relationship between China and the US?

China has been in a one-sided trade war with the US and Europe [the “West”] for about two decades. It has played loose with the guidelines of world trade—those of the World Trade Organization [WTO]. With trade, and in other arenas of global competition, the Chinese play fast and loose, breaking the rules when it suits them and using the WTO and other rule makers when the rules benefit them.

The US, other countries, and their businesses complained and sought redress, but never very seriously. Administration after administration in the US let China off-the-hook.

President Trump appears to have decided to tackle the issue head-on now.

Yet, now the US needs China’s help with N Korea and other problems.

To most observers, things are very confusing on many aspects of the various China issues.

Is China a friend or enemy of the US?

Is a major trade-war or a shooting war near between the two?

No one knows for sure what is coming, but a look at some basic facts provides a foundation for analysis and understanding.

President Trump calls President Xi his friend and they do seem to get along together personally. China has been helpful with N Korea in recent months and is crucial for solving that problem. But, China has even more serious problems with which it needs Trump’s help.

There is no doubt that China is in a vicious, massive trade war with the US and that the two are geo-political competitors.

Let’s strip away some of the confusion by stating some fundamental facts:

1. The US is a nation with a capitalistic/market driven economy and a vibrant, if fractious and frustrating, democracy. It is governed under an effective Constitution and a strong rule-of-law. The American economic model is a bottom-up, organic form of capitalism with only very limited government control of business ownership or priorities. Resources, including financial resources, are mostly allocated by markets.
2. The People’s Republic of China is a totalitarian, one-party dictatorship headed by the new leader for life, Xi Jinping. It has a top-down, corporatist, mercantilist, crony capitalism model with substantial state control of resources, including financial resources. The government sets priorities for the many state-owned-enterprises it controls and increasingly for Chinese and foreign-owned private businesses it does not own. The public sector is corrupt, and the rule-of-law is a “sometimes” thing, with the Communist Party leaders the real arbiters of who wins and who gets the shaft.
3. The US is very wealthy and is by far the world’s biggest economy at a $20T GDP and about $60,000 per capita GDP. Including both real growth and inflation, it is growing at about 5% per year.
4. China is the #2 world economy at $12T but is a low-to-middle income country with a per capita income of around $9,000 per year—about the same as Russia or Mexico as a reference point. Counting real growth and inflation, China is growing at about 9% per year. [As described in numerous previous issues of the Tuchfarber Report, I am predicting a dramatic decline in China’s total growth rate into low single digits by 2020 due to an exploding debt crisis.]
5. Total US defense spending was just increased last week, by over 10% to about $700B, while the Chinese total is about $200B.
6. The US has been the world’s hegemon—dominant nation—since WWII. Its official policy statements won’t state it, but, have no doubt, it plans to remain dominant.
7. Not surprisingly, many around the world deeply resent that. Historically, China dominated East Asia for thousands of years. Their doctrine and national goals are now to push the US out of East Asia, dominate it themselves again, and then supplant the US as the world’s #1 country.

China’s leaders and people see the US as a competitor and an enemy.

The US must understand that.

A major shooting war is not likely, but possible. Various levels of conflict are a near certainty.

It you keep these fundamental facts and goals in mind, it will help you understand the actions of both countries.

I’ll be writing a great deal more about the china versus us conflict and its details in the Tuchfarber Global Political-Economics report in coming months.

Predictive Political & Economic Measures

POLITICAL MEASURES

1. Right Direction-Wrong Track— This measure is widely used by pollsters, asking if things are going well or badly in the US. It has proven to be a good indicator if the party “in-power” was going to do well or badly. If the “wrong-track” reading is 62% or higher, it bodes ill for them. If 58% or lower, they do well. THIS IS MY MOST-PREFERRED ELECTION PREDICTION MEASURE. I use many quantitative and qualitative indicators, but this one seems to strip out a lot of extraneous noise. “Wrong-Track” is now at 55%, down 1% from last week.
2. Generic Congressional Ballot—Also used by many pollsters, this indicator measures the current preferences of voters for which party they prefer in US House races. The polls I’m averaging are now at 45% D and 39% R, the same as last week. More important is that the Democratic lead has fallen from about 13% at the beginning of 2018 to 6% now. Historically, Ds need a solid lead on this measure to win a House majority.
3. Presidential Approval—Trump’s approval rating, using my measure, is now 43%, unchanged from last week. His approval rating is up from 40% at the start of the year. It is at a below average level for recent Presidents. But, because of his unique and often disruptive style, the Gallup organization and others, including myself, believe this measure underestimates his real approval ratings by 5% or more. I will report his approval rating, but will use it for trend analysis, not election predictions.

ECONOMIC MEASURES

4. U-3 official unemployment rate—The current level is 4.1%, a 17-year low. Low or falling levels of this measure are a positive for the “in” party. It is low and falling now, down from 4.8% a year ago. The February jobs report saw a huge increase in jobs created and in Americans returning to the job market, both very positive signs.
5. U-6 unemployment rate [broadest measure, including under-employment]—The current level is at 8.2%. This is a very low level and fell from 9.4% a year ago.
6. GDP GROWTH—Growth last quarter was 2.6% which is significantly higher than the average growth over the last eight years.

WAR

7. The jobs issue and war issue are the 500-pound gorillas of American public opinion. If the economy is bad or there is a major unpopular war, the party in power is in trouble. Unpopular wars, like Vietnam and Iraq, shatter their support. Small wars, like Afghanistan and Syria are nearly always underway and usually do not have major effect unless they grow substantially in the cost in US lives.

ANALYSIS

Among the Political Punditry, the conventional wisdom for months has been that a Democratic Wave was building that would gain them the House majority and minimize their losses in the Senate, where they have many vulnerable seats.

I have disagreed and the predictions in the next section quantify that. I’ve demurred because my preferred metric [right direction-wrong track] is in territory that predicts relative success for the Rs. In addition, economic growth and job creation are excellent, and there is no major war.

The measures above could change, but if they stay where they are, the Democrats will make only modest gains in November. If the indicators change, so too will my predictions.

Predictions

Changes this Week

Election Predictions

• 80-90%: the probability the Rs will lose seats in the 2018 House elections.
• 10-20%: the probability that the Rs will lose control of the House in 2018
• 90-95%: the probability that the Rs will still control the Senate in 2019
• 90-95%: the chance that the Ds will lose seats in the 2018 Senate elections
• 50%: the chance the Republicans will gain five or more Senate seats in the 2018 elections.
• 90-95%: the chance that Donald Trump will be the 2020 Republican nominee unless he decides not to run.
• 80-85%: the chance that Trump will be re-elected in 2020

Policy & Legislative Predictions

• CHANGE: There is more than a 70% chance that pressure on the DACA–“Dreamer” — issue will force the Democrats to negotiate a deal with President Trump on the border wall and other immigration issues by this spring. [CHANGE: change to 70% from 60% because of Trump’s pressure on the issue.]
• The chance that Donald Trump will be impeached and removed from office by the Congress in the next three years is less than 1%. *
• The chance that Trump will be removed from office by the Congress in the next seven years is less than 5%.

*NOTE: Remember that after being impeached by a Republican controlled House in 1998, not one Democratic Senator voted to remove Bill Clinton from office. It takes 67 votes and is more of a political process than a legal one. NO President has ever been impeached and removed. Richard Nixon resigned before the House and Senate could impeach and remove him from office.

Musings

The Tuchfarber Report is grounded by facts rather than advocacy or wishful thinking. But there are times when a little speculation is appropriate, which is why I periodically include this Musings section.

The March for our Lives

The March for Our Lives had an impressive turnout. Hundreds of thousands marched across hundreds of US cities. CBS News hired a professional firm to estimate the DC crowd size. It was gauged at 203,000.

As happens with many of these so-called “people’s marches”, this event had professional paid organizers. It had numerous left-wing celebrity marchers and speakers. And, across the country hundreds of Democratic politicians turned the marches into partisan rallies.

THERE IS NOTHING WRONG WITH ANY OF THAT.

Nevertheless, as a political analyst, my point in bringing up those facts is that the marches are unlikely to change many votes or initiate a truly organic, bottom-up movement that will persist independently.

Trump Creates Budget Deal Chaos

It is fascinating and a bit scary to watch Donald Trump control a news cycle. All presidents have the means to do that, but Trump does it with a unique brand of creativity.

On Thursday last week the $1.3T budget package was approved by the House and Senate. It had four major story lines:

1. The huge, bust the bank, budget was passed in a bi-partisan vote, with major spending increases for the military and domestic programs.
2. Republican fiscal conservatives were furious about the deficit and debt increases.
3. D leaders Pelosi and Schumer were gloating that they had “won” the budget battle.
4. The military had gotten a huge $71B increase that would allow it to undo the budget sequester damage over the next few years.

All four of those major story lines were reasonably accurate and appropriate.

Early Friday morning, without even informing his staff, Trump tweets he might veto the bill because it does not solve the DACA- “Dreamer” issue, nor provide adequate funding for the border wall.

All hell breaks loose from every quarter. Many in Congress have already left town and the government will shut-down at midnight without the funding.

Senior Republicans and Trump administration officials are clueless. Democrats and the mainstream press are sputtering.

General Mattis requests lunch with Trump and convinces him the military and national defense must come first. They need the new money “today”.

The Commander-in Chief listens and signs the bill.

But, now that he has everyone’s full attention, he points out that he and the Rs insist that the 1.8 million-person DACA issue be solved and that the border wall be funded. Furthermore, he asserts that the Democrats don’t want to solve the DACA problem, but, rather, want a campaign issue for November.

The “bully pulpit” is truly amazing in the hands of someone who knows how to deploy it.

Trump is in a class with Reagan, Kennedy and FDR.

Until next week…
Al Tuchfarber
Professor Emeritus of Political Science, University of Cincinnati

Al.Tuchfarber@gmail.com
Tuchfarber Political-Economics LLC, Inc.

Dr. Tuchfarber founded the Ohio Poll, one of the nation’s most accurate, while directing the social science Institute for Policy Research from 1975 to 2004. He also founded and directed the Institute for Health Policy from 1996 to 2004. He is an engaging and dynamic speaker and has published over 100 articles and papers about politics, society, and research methods.