New
Yorkers aren't amused. They'll vote for Democratic
presidential candidate John Kerry and well over half of
New York City residents
in a recent poll regard this
week's Madison Square Garden Republican National
Convention as an undue imposition that once again could
make them a terrorist target and - in a worst-case
scenario - could put their lives at risk. Many have left
the city to escape the mayhem of a foreign invasion. Of
those who stayed, thousands joined a large protest march
through midtown Manhattan against President George W
Bush's policies. The Republicans promise "A Safer World,
a More Hopeful America". New Yorkers don't quite see it
that way - not in Harlem, not on Wall Street.
To
candidate Bush, however, all this matters little. The
Republican convention site wasn't chosen for New York
City's voters, but for its victims. A total of 2,800
died there on September 11, 2001. The place is a
powerful symbol to showcase George W's leadership in the
"war on terrorism". While most of the world may
disagree, Bush's performance in that war (and in Iraq)
still earn him a high
rating among a majority of
Americans as commander-in-chief, well ahead of
challenger Kerry's qualifications in that regard. He's
determined to make the most of it.
In Las Vegas
you can bet on most anything - but not on US elections.
It's a federal law. British bookmakers, who are not
under such restrictions, offer odds of 5/6 for both
Kerry and Bush. Most recent US polls project a
statistical dead heat. It is nonetheless likely that
Bush will eke out a victory on November 2. Americans'
basic attitudes on the major issues, the likely course
of events over the coming two months, and key
economic-demographic factors favor the Republican.
Let's start with the main issues.
1.
Iraq/terrorism. A majority of Americans now
disapprove of Bush's policies on Iraq; but they
distinguish between that and the "war on terrorism" and
approve of Bush's handling of the latter by 53% to 42%
in the latest NBC/Wall Street Journal voters survey.
Moreover, only 30% regard Iraq as the principal issue.
That puts Kerry in a bind. While his own most avid
supporters are strongly anti-war, most Americans don't
think Iraq is that big a deal. Also, Kerry, like Bush,
opposes an early pullout from Iraq and merely wants
larger involvement of the international community -
which matters little to the ordinary American.
When it comes to the "war on terrorism", Bush is
seen as the stronger leader. Kerry tried to counteract
the perception that he would prove a weaker
commander-in-chief by playing up his Vietnam War record
during the Democratic National Convention in Boston. But
that was probably a mistake and overdone to the point of
coming across as opportunistic and disingenuous, not the
qualities of character a presidential candidate wants to
display. Kerry served in Vietnam for four months and
returned as a decorated war hero. He then became a vocal
opponent of the war and testified against it before the
US Senate. To my mind (I watched his 1971 testimony as a
student and strong war opponent), that was the right and
honorable position. But who is Kerry now or what does he
want to appear to be? The Vietnam hero or the man who
castigated the war and alleged atrocities committed by
his fellow US soldiers? On this, Bush need not say
anything and can just stand by and watch. To numerous
Americans, Kerry's present posture and the way he
reinvented himself at the Democratic convention smack of
dishonesty and opportunism.
2. The
economy. When Bush took office in January 2001, he
inherited an economy bloated by the Internet bubble and
falling into recession. The downturn was made worse by
the events of September 11. To cope with it, the
administration unleashed a double dose of fiscal
stimulus - a record tax cut and greatly increased
military spending. As a result, the federal budget went
into deficit, but the recession proved shallow and
recovery commenced in earnest last year, characterized
by record gains in productivity and corporate earnings.
But it lagged (and continues to lag) in new-job creation
and wage earners' income - and that's Bush's Achilles'
heel and Kerry's greatest political asset and
opportunity. The problem is that he has failed so far to
come up with a convincing economic policy alternative to
restore job and income growth. He harps on the
(undisputed) fact that the Bush tax cut tends to favor
"the rich" (annual income over US$200,000) and should be
canceled for the upper income brackets. Money saved
should be allocated to education, health care and
deficit reduction.
But it is far from clear how
such a populist redistributionist policy would create
more and better-paying jobs. The Republicans have
countered that Kerry in effect wants to raise taxes
rather than make cuts permanent, and that strikes a bad
chord with pretty much all Americans, who in any case
are suspicious of big-spending Democrats.
The
new theme Bush will develop in his convention speech on
Thursday will be "ownership society", the notion that
government through tax and regulatory policies should
encourage entrepreneurship (business ownership),
facilitate home ownership, and allow families to control
their own health-care and social-security benefits. It's
likely to play well with the increasing number of
Americans who define themselves as "middle class". The
crux, however, remains whether US Federal Reserve
chairman Alan Greenspan is right in saying that the
economy in the second quarter of this year (when it grew
at a mere 2.8%) merely hit a temporary "soft patch" and
will resume rapid job creation. Only better payroll
numbers will allow Bush to sidestep Kerry's "no jobs,
lower pay" charges.
The presidential candidates'
campaign positions and rhetoric on security and economic
policy aside, the course and shape of events in
September and October will, of course, substantially
influence their electoral fortunes. On present evidence,
that should give Bush an edge. With the return of the
Grand Ayatollah Ali al-Sistani to Najaf, troubles in
Iraq appear to be subsiding. Oil prices have come well
down from their $49-plus recent highs, lending support
to US stock markets and consumer confidence. Greenspan's
economic forecast carries more credibility than Kerry's
advisers'. On one key item, we'll know better this
coming Friday when the US Labor Department publishes
payroll numbers for July. The number of new jobs created
in June was shockingly low - 32,000 versus economists'
consensus forecasts of 240,000. Anything well below
100,000 for July would be another major disappointment
and severe blow to Bush, from which he'd find it hard to
recover. But even pessimists now believe that the July
figure will come in at 100,000-150,000. Watch the stock
market. If it's up in October, then - on near-uniform
historical precedent - the incumbent, Bush, will win.
We've left some important economic/demographic
indicators for last. They may prove the most important.
Contrary to Kerry's contention in his convention speech
that the US middle class is shrinking and its income
declining, US Internal Revenue Service (the federal tax
collector) statistics show that the number of tax
returns in the $75,000-$100,000 bracket increased by 8%
between 2000 and 2002 while the number of returns in the
above-$200,000 categories dropped by anywhere from
10-50%. Incomes of those earning $100,000 or less
advanced marginally, while incomes of the big earners
above $100,000 declined substantially.
Overall,
some 75% of Americans now consider themselves
middle-class, 4% are upper-class, and the remainder
working- or lower-class. The upper and working/lower
classes in 2000 voted overwhelmingly Democratic and are
now pro-Kerry. Al Gore, the Democratic candidate in that
election, got fully 56% of the upper-class vote. And as
the middle class has expanded, it has moved into the
suburbs. In 2000, 50% of voters were suburbanites; this
year it will be nearly 52% - and upward mobility out to
the suburbs from the inner cities generally favors
Republicans.
Upper-upper-class members, whether
George Soros, Warren Buffet or Steve Jobs, have made no
secret of their political preferences. On Wall Street,
contrary to popular perception, Bush's support is soft.
The rich don't much care about entrepreneurship, wealth
creation and new-home ownership. They've got it. They
worry about wealth preservation (and hence don't like
deficits that drive down bond prices). The middle class
does worry about fiscal and regulatory measures
designed to create wealth and ownership. It's their
principal preoccupation. Bush's "ownership society" will
favor them and they'll favor it.
And then, of
course, there's the Hollywood-Nashville divide.
Nashville's country crooners like Bush; Hollywood's
stars hate Bush and will vote Kerry by default.
California and New York are solidly in Kerry's camp. But
Gore in 2000 lost Tennessee, his own state. Tennessee
again will be the better predictor this year.
(Copyright 2004 Asia Times Online Ltd. All
rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
in a recent poll regard this
week's Madison Square Garden Republican National
Convention as an undue imposition that once again could
make them a terrorist target and - in a worst-case
scenario - could put their lives at risk. Many have left
the city to escape the mayhem of a foreign invasion. Of
those who stayed, thousands joined a large protest march
through midtown Manhattan against President George W
Bush's policies. The Republicans promise "A Safer World,
a More Hopeful America". New Yorkers don't quite see it
that way - not in Harlem, not on Wall Street. 
rating among a majority of
Americans as commander-in-chief, well ahead of
challenger Kerry's qualifications in that regard. He's
determined to make the most of it. 
