Monday, March 13, 2023

On Our "Virtual Route 66" Around the World: On the Week That Was

 




As a new week is upon us, we present a snapshot of the week that was with reflections courtesy the team at the Bulwark, Heather Cox Richardson, Larry Sabato, The National of Abu Dhabi, the Financial Times of London  & the Institute for Policy Studies-and we begin with breaking news with the collapse of Silicon Valley Bank which we released comments on in our Visions Property:


 

At 6:15 this evening, Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin J. Gruenberg announced that Secretary Yellen has signed off on measures to enable the FDIC to fully protect everyone who had money in Silicon Valley Bank, Santa Clara, California, and Signature Bank, New York. They will have access to all of their money starting Monday, March 13. None of the losses associated with this resolution, the statement said, “will be borne by the taxpayer.”

But, it continued, “Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

The statement ended by assuring Americans that “the U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe.”

It’s been quite a weekend. 

On Friday, Silicon Valley Bank (SVB) failed in the largest bank failure since 2008. At the end of December 2022, SVB appears to have had about $209 billion in total assets and about $175 billion in deposits. This made SVB the sixteenth largest bank in the U.S., big in its sector but small compared with the more than $3 trillion JPMorgan Chase. This is the first bank failure of the Biden presidency (while Donald Trump Jr. tweeted that he had not heard of any bank failures during his father’s presidency, there were sixteen, eight of which happened before the pandemic). In fact, generally, a few banks fail every year; it is an oddity that none failed in 2021 or 2022. 

The failure of SVB created shock waves for three reasons. First, SVB was the major bank for technology start-ups, so it involved much of a single sector of the economy. Second, only about $8 billion of the $173 billion worth of deposits in SVB were greater than the $250,000 that the FDIC insures, meaning that the companies who had made those deposits might not get their money back quickly and thus might not be able to make payrolls, sparking a larger crisis. Third, there was concern that the problems that plagued SVB might cause other banks to fail, as well. 

What seems to have happened, though, appears to be specific to SVB. Bloomberg’s Matt Levine explained it most clearly: 

As the bank for start-ups, which have a lot of cash from investors and the initial public offering of stock, SVB had lots of deposits. But start-up companies don’t need much in the way of loans because they’ve just gotten so much cash and they don’t yet have fixed assets. So, rather than balancing deposits with loans that fluctuate with interest rates and thus keep a bank on an even keel, SVB’s directors took a gamble that the Federal Reserve would not raise interest rates. They invested in long-term Treasury bonds that paid better interest rates than short-term securities. But when, in fact, interest rates went up, the value of those long-term bonds sank.  

For most banks, higher interest rates are good news because they can charge more for loans. But for SVB, they hurt.

Then, because SVB concentrated on start-ups, they had another problem. Start-ups are also hurt by rising interest rates because they tend to promise to deliver returns in the long term, which is fine so long as interest rates stay steadily low, as they have been now for years. But as interest rates go up, investors tend to like faster returns than most start-ups can deliver. They take their money to places that are going to see returns sooner. For SVB, that meant their depositors began to need some of that money they had dumped into the bank and started to withdraw their deposits. 

So SVB sold securities at a loss to cover those deposits. Other investors panicked as they saw SVB selling at a loss and losing deposits, and they, too, started yanking their money out of the bank, collapsing it. Banks that have a more diverse client base are less likely to lose everyone all at once.

The FDIC took control of the bank on Friday. On Sunday, regulators also shut down Signature Bank, based in New York, which was a major bank for the cryptocurrency industry. Another crypto-friendly bank, Silvergate, failed last week. 

Congress created the FDIC under the Banking Act of 1933 to restore trust in the American banking system after more than a third of U.S. banks failed after the Great Crash of 1929, sparking runs on banks as depositors rushed to take out their money whenever rumors suggested a bank was in trouble, thus causing more failures. The FDIC is an independent agency that insures deposits, examines and supervises banks to make sure they’re healthy, and manages the fallout when they’re not. The FDIC is backed by the full faith and credit of the government, but it is not funded by the government. Member banks pay insurance dues to cover bank failures, and when that isn’t enough money, the FDIC can borrow from the federal government or issue debt.

Over the weekend, the crisis at SVB became a larger argument over the role of government in the protection of the economy. Tech leaders took to social media to insist that the government must cover all the deposits in the failed bank, not just the ones covered under FDIC. They warned that the companies whose deposits were uninsured would fail, taking down the rest of the economy with them. 

Others noted that the very men who were arguing the government should protect all the depositors’ money, not just that protected under the FDIC, have been vocal in opposing both government regulation of their industry and government relief for student loan debt, suggesting that they hate government action…except for themselves. They also pointed out that in 2018, under Trump, Congress weakened government regulations for banks like SVB and that SVB’s president had been a leading advocate for weakening those regulations. Had those regulations been in place, they argue, SVB would have remained solvent.

It appears that Yellen, Powell, and Gruenberg, in consultation with the president (as required), concluded that the collapse of SVB and Signature Bank was a systemic threat to the nation’s whole financial system, or perhaps they concluded that the panic over that collapse—which is a different thing than the collapse itself—was a threat to the nation’s financial system. They apparently decided to backstop the banks to prevent more damage. But they are eager to remind people that they are not using taxpayer money to shore up a poorly managed bank.

Right now, this appears to leave us with two takeaways. The Biden administration had been considering tightening the banking regulations that were loosened under Trump, and it seems likely that the need for the federal government to step in to protect the depositors at SVB and Signature Bank will make it much harder for those opposed to regulation to keep that from happening. There will likely be increased pressure on the Biden administration to guard against helping out the wealthy and corporations rather than ordinary Americans.

And, perhaps even more important, the weekend of panic and fear over the collapse of just one major bank should make it clear that the Republicans’ threat to default on the U.S. debt, thus pulling the rug out from under the entire U.S. economy unless they get their way, is simply unthinkable.


(Photo by Chip Somodevilla/Getty Images)

Joe’s pivot

This is the season of progressive discontent.

Which is odd, since Joe Biden just unveiled a budget blueprint jam-packed with progressive goodies, including big spending increases and tax hikes on the wealthy.

But…Via Semafor:

Progressive Democrats worry that President Joe Biden’s team is swerving to the right on crime and immigration….

Some members are also complaining about a lack of communication, with some saying they were caught off guard by the White House’s announcement it would sign a measure overturning a D.C. crime bill and recent reports it was considering detaining families at the border.

**

What’s happening here is pretty obvious.

Biden is choosing the ground he wants to fight on. He’s willing to fight on a robust expansion of government spending and power; and seems to relish a fight on Medicare and Social Security, and tax hikes on the rich, including a 25% minimum tax on billionaires (it almost sounds like…populism).

But he also understands where the political landmines are. He gets that Democrats are vulnerable on both crime and the chaos at the border, and is moving to dilute two of the most dangerous GOP talking points for 2024.

What Biden gets is this: He can move to the left on tax/spending, as long as he moves to the center on the other hot button issues where Democrats have been shedding support.

“This is the Joe Biden of 2020 who was the most centrist candidate in the field and romped to victory,” Jim Kessler, Executive Vice President for Policy at the moderate think tank Third Way, told Semafor. “Democrats have to be where voters are on crime and immigration. Biden gets that.”

Other Democrats seem to be following his lead, at least on crime. This week, the vast majority of Senate Democrats voted to overturn the D.C. crime package that lowered the penalties for carjacking (among other things.)

**

It’s almost as if the Administration is learning from its mistakes. Writes Nick Catoggio:

{Biden has] begun to tiptoe toward the center lately on another major Democratic liability, immigration. The ongoing fiasco at the border leaves him vulnerable to a Republican opponent whose political calling card is building a wall. Centrist analysts like Ruy Teixeira have warned Biden and his party that their political viability depends on escaping the left-wing “cultural bubble” in which an unsecured border is treated as a civic good. Lo and behold, on Tuesday morning the New York Times reported that the White House might reinstate Trump’s policy of detaining immigrant families who enter the country illegally, a strategy Biden ended after taking office. That would complement another new rule requiring asylum seekers from far-flung countries to seek refuge in nations they pass through instead of in the United States, another Trumpish initiative.

The new asylum policy brings Biden further into line with the balance of public opinion at the expense of crossing his own party. Among Democrats, a plurality want to see the number of asylum applicants increased rather than reduced. Among the overall public, it’s the opposite. Biden is tilting toward the latter.

**

Biden also seems to have been listening to Ruy Teixeira, who has been urging Democrats to get tough — or at least credible — on crime.

Democrats are hemorrhaging support among Asian voters, alienating other nonwhite voters with their lax approach to public safety and losing many formerly loyal white liberals and moderates who are “mad as hell and not going to take it anymore”. What to do?

The answer seems clear to me. It’s time for Democrats to adopt former UK prime minister Tony Blair’s felicitous slogan: “Tough on crime, tough on the causes of crime”. Conservative outlets like Fox News may exaggerate but voters really do want law and order—done fairly and humanely, but law and order just the same. Democrats still seem reluctant to highlight their commitment to cracking down on crime and criminals because that is something that, well, Fox News would say.

This has got to stop. Weakness on crime damages the Democrats’ brand and especially hurts some of their most vulnerable constituents.

As London Breed, the Democratic mayor of San Francisco who will appoint Boudin’s successor, put it:

It’s time the reign of criminals who are destroying our city, it is time for it to come to an end. And it comes to an end when we take the steps to be more aggressive with law enforcement. More aggressive with the changes in our policies and less tolerant of all the bullshit that has destroyed our city.

Biden (or some other leading Democrat) should say something like this, as recommended by Charlie Sykes at The Bulwark:

We must continue the fight for social justice, but it should not come at the price of public safety. In some of our biggest cities we have folks who think that we shouldn’t put criminals in jail or downplay the dangers of violent crime. They are wrong. We have to protect our families and our neighborhoods.

And then name some names. I think you know who I have in mind….

 

 





 

In a New York Times op-ed today, President Joe Biden offered the opening salvo in his battle with the Republicans over budget measures. He outlined his promise to make the Medicare trust solvent beyond 2050 without cutting benefits. Indeed, he says, his plan will make the program deliver better value on the money Americans invest in it.

Biden noted that both he and former president Barack Obama signed into law the biggest health reforms since the creation of Medicare in 1965. In 2010, Obama established the Affordable Care Act, more popularly known as Obamacare, extending medical coverage to many for whom it was out of reach. That law significantly slowed the growth of healthcare spending.

In 2022, Biden signed the Inflation Reduction Act, permitting Medicare officials to negotiate with pharmaceutical companies for lower drug prices and capping the costs of drugs for seniors. This measure is projected to reduce the deficit by $159 billion.

Biden proposes to build on those two measures, increasing the scope of Medicare’s negotiations over drug prices, a process he claims would yield $200 billion in savings that he would put directly into Medicare’s trust fund.

He also proposes to raise the Medicare tax rate on earned and unearned income above $400,000 from its current rate of 3.8% to 5%. That money, too, would go into Medicare’s trust fund. “When Medicare was passed, the wealthiest 1 percent of Americans didn’t have more than five times the wealth of the bottom 50 percent combined,” Biden commented, “and it only makes sense that some adjustments be made to reflect that reality today. Let’s ask them to pay their fair share so that the millions of workers who helped them build that wealth can retire with dignity and the Medicare they paid into.”

Biden wrote that his budget would protect Medicare for more than another generation, beyond 2050. In contrast, he pointed out, MAGA Republicans want to repeal the Inflation Reduction Act, getting rid of drug negotiations and price caps.

Biden promised that this week he will release his “full budget vision to invest in America, lower costs, grow the economy and not raise taxes on anyone making under $400,000. I urge my Republican friends in Congress to do the same—and show the American people what they value.”

The circus at the Conservative Political Action Conference and the outrage when House speaker Kevin McCarthy (R-CA) gave exclusive access to 44,000 hours of videos from the U.S. Capitol on January 6, 2021, have taken oxygen away from what amounts to a crisis in the Republican Party.

Republican leadership has vowed to cut the U.S. budget significantly but has also said publicly that it would not touch Social Security or Medicare. (However, former vice president Mike Pence promptly negated that promise when he said, "While I respect the speaker's commitment to take Social Security and Medicare off the table for the debt ceiling negotiations, we've got to put them on the table in the long term.”) Few Republicans will agree to cuts in the defense budget, either.

So McCarthy is in the impossible position of delivering the budget cuts his conference demands without actually having the room to cut in most of the budget. It’s a circle he is unlikely to be able to square.

Biden seems to be pushing the Republicans to release a budget plan not only to illustrate to the American people that for all their grandstanding they don’t have one, but also because he would like to return to a political norm in which parties actually explain how they would address issues, and then let voters choose which approach they prefer. It’s an old model and one the Republicans, who since 1980 have for the most part simply complained about the government rather than offering positive solutions, have no interest in adopting. Worse for them, polls show that the solutions Democrats want are popular, while their own insistence on privatizing everything is not.

Going forward, I suspect we’ll see a lot of distractions rather than an actual budget plan from the Republicans.

While they try to fudge the budget issue, the Republicans are still vowing to refuse to lift the debt ceiling, which is separate from the budget. The debt ceiling is a holdover from the World War I era, when Congress stopped debating which financial instruments the Treasury should use and instead just set an upper limit on borrowing. Raising the debt ceiling does not create new spending; it simply enables the government to pay for expenses already incurred. If it is not lifted, the U.S. Treasury will default. The U.S. has hit the current limit of $31.4 trillion, and Treasury Secretary Janet Yellen is using extraordinary measures to pay bills.

Republicans are eager to pin the growing debt on Biden and the Democrats, but as Jim Tankersley noted in the New York Times yesterday, “Republicans bear at least equal blame as Democrats for the biggest drivers of federal debt growth that passed Congress over the last two presidential administrations.” Since early 2017—the start of Trump’s administration—three fifths of the ballooning new debt was signed into law by Trump, and nearly 75% of it came from bills approved by a majority of Republicans in at least one chamber of Congress. In laws passed on strict party-line votes, Republicans added slightly more debt than Democrats did. Notably, the Republicans’ tax cuts for the wealthy and for corporations under Trump cost at least $2 trillion over time.

Today the Senate Subcommittee on Economic Policy, which sits under the Banking, Housing, and Urban Affairs Committee and is chaired by Senator Elizabeth Warren (D-MA), heard from economist Mark Zandi of Moody’s Analytics. Zandi warned that a U.S. default would “be a catastrophic blow to the already fragile economy.”

As Chelsey Cox of CNBC reported, Zandi explained that “[g]lobal financial markets and the economy would be upended, and even if resolved quickly, Americans would likely pay for this default for generations, as global investors would rightly believe that the federal government’s finances have been politicized and that a time may come when they would not be paid what they are owed when owed it.” Zaidi also warned that, considering how much of the budget is now off-limits, the cuts Republicans promise will be so extreme they will prompt a recession that will cost as many as 2.6 million jobs.

The Republican Party is in its current chaos in part because it has been boxed in by the former president. Trump’s base has forced party leaders to take impossible extremists stands like, for example, a showdown over the debt ceiling. New materials released tonight in the Dominion Voting Systems defamation lawsuit against the Fox News Network confirm that Fox News Channel executives and hosts did not believe that Trump won the election in 2020, although they continued to push that lie on their channel to hold Trump viewers.

But tonight’s material went further, suggesting that some of the hosts who were most vocal in promoting Trump were less fond of him in private. On January 4, 2021, host Tucker Carlson tweeted to someone: We are very, very close to being able to ignore Trump most nights. I truly can’t wait…. I hate him passionately.”

Speaking of Trump’s presidency, Tucker wrote: “We’re all pretending we’ve got a lot to show for it, because admitting what a disaster it’s been is too tough to digest. But come on. There really isn’t an upside to Trump.”

—

Notes:

https://www.nytimes.com/2023/03/07/opinion/joe-biden-medicare.html 

https://www.usatoday.com/story/news/politics/2023/02/22/mike-pence-social-security-medicare-debt-ceiling/11322677002/

https://www.nytimes.com/2023/03/06/us/politics/federal-debt-republicans-democrats.html

https://www.cnbc.com/2023/03/07/economists-activists-warn-lawmakers-of-looming-debt-default-.html

Assessing the GOP presidential primary

It feels late -- and also early -- in the race for the Republican presidential nomination.

It may be late because despite the fact that we are still nearly a year away from the actual voting, the top 2 contenders seem to be so clear. The winnowing process that so often defines the year in advance of the primary voting may have effectively already happened – it’s just that the winnowed candidates, some of whom aren’t even candidates yet, don’t know that their fate is already sealed.

And yet it may be very early because the person who seems like Donald Trump’s chief rival, Gov. Ron DeSantis (R-FL), is both in an enviable, impressive position but also is unproven as a national candidate, which means he is not guaranteed to have staying power.

Donald Trump already served a single term as president, lost reelection, and is seeking to be renominated, putting him in the position of being a quasi-incumbent. In national polls of the GOP presidential primary that ask about multiple candidates, Trump typically registers in the 40s, sometimes getting into the 50s. That is a strong starting point, but he is not the undisputed leader of the party, like he was in 2020 when he was an incumbent running for reelection. He also may be coasting to some degree on name ID. Still, Republicans have long struggled to actually land punches on him -- to the extent they have even tried.

Meanwhile, DeSantis remains an undeclared candidate, but he is acting very much like an actual candidate. He just released a book, and he embarked on a national tour recently, including speaking at one of the great Republican forums in the country, the Reagan Presidential Library in Simi Valley, California. While he generally polls considerably lower than Trump in national polls, DeSantis still registers a level of support ranging from the mid-20s to the low-to-mid 30s. That is impressive for someone who has never before run for president or been part of a presidential ticket, as Nate Cohn recently documented in the New York Times.

In the RealClearPolitics average of national polls, Trump and DeSantis together get about 75% of the total support. That’s a little bit more than what national polls showed in the early days of the 2008 Democratic presidential primary, which turned into a 2-way contest between Hillary Clinton and Barack Obama: At this time in 2007, Obama and Clinton generally shared about 60%-65% of the support in national polls. Maybe this race will just end up looking a lot like that 2008 Democratic contest -- one in which many candidates competed, but only 2, Clinton and Obama, ever really showed much ability to actually win the nomination.

But this race is not guaranteed to follow the Clinton-Obama model. The composition of the debate stage -- or stages, depending on the number of candidates -- at the first Republican presidential primary debate in August remains a mystery. Political scientist Seth Masket has identified 14 potential Republican candidates, but only 5 of them have announced bids -- and only 2 are people we would consider prominent national politicians. There is Trump, of course, as well as former ambassador to the United Nations Nikki Haley. Beyond them, there is businessman Perry Johnson, who was last seen failing to secure a place on the Michigan gubernatorial ballot; Vivek Ramaswamy, an entrepreneur and author; and Corey Stapleton, the former Montana secretary of state who has previously lost several primaries for higher office. Meanwhile, a couple of potential contenders have said they will not run: Sen. Ted Cruz (R-TX) and former Gov. Larry Hogan (R-MD).

That still leaves several other possible candidates who are technically undecided but have been behaving as though they might become candidates. DeSantis obviously leads that list, but we would also add former Vice President Mike Pence, Sen. Tim Scott (R-SC), and former Secretary of State Mike Pompeo, among others.

Whether those candidates can get any traction depends very much on the first of 5 questions and observations we have about the GOP field.

1. We have to see DeSantis prove it

As mentioned above, DeSantis is in an unusually strong position for a newcomer to presidential politics. In addition to garnering a quarter or more of GOP support in national polls, DeSantis has arguably been even more competitive with Trump in state-level polls. He even sometimes leads Trump in polls of key states that ask about multiple candidates, as opposed to just a hypothetical head-to-head with Trump (where DeSantis often fares better). DeSantis has led Trump in recent multi-candidate polls of likely or registered voters released since Feb. 1 in California, Pennsylvania, and Virginia, while Trump has led DeSantis in Arizona, Kansas, Maryland, Missouri, New Hampshire, and South Carolina (we used the latest polls list from FiveThirtyEight to track these surveys). So the individual polls vary, but both Trump and DeSantis backers can point to good results for their candidate in individual states.

Say what you want about Trump, and we have said plenty, but he is basically a proven commodity at this point. He has won, he has lost, he has been at the center of politics for almost 8 years now and has been a well-known figure in American life for much longer than that. He is well-defined. He continues to face several ongoing legal questions -- Insider laid all of them out here. These cases are obviously worth monitoring but we’re not going to assume in advance that any of them will ensnare him or cause his campaign serious damage. That is not to say that we should assume Trump’s level of support will be static in the primary -- he may rise or fall depending on his own performance or the performance of his rivals -- but at this point we think it’s less likely that he experiences huge gyrations in his level of support.

DeSantis is different -- or at least might be different. We have no idea how he will perform as an actual presidential candidate, and the public’s perception of him is less solid. Maybe he enters the race, is well-received, and emerges more clearly as Trump’s chief rival, perhaps even surpassing the former president. Or maybe he flames out, as other seemingly formidable but ultimately unsuccessful candidates before him, like then-Texas Gov. Rick Perry after he was a relatively late entrant to the 2012 GOP presidential race. Perry skyrocketed to the top of the GOP field but then fell off quickly as he performed poorly as a candidate.

Current polling numbers are not going to help us project how DeSantis will actually perform. We don’t know what to expect -- all we know is that we don’t know.

How well DeSantis campaigns is really the key to the question posed at the start of the article, whether it is late or early in the primary process. If DeSantis is as strong as he now appears, there just is not much oxygen for anyone else besides Trump.

2. Wine track versus beer track

The astute political journalist Ron Brownstein long ago coined the term “wine track” versus “beer track” to analyze presidential primary coalitions. He recently discussed the history of the dynamic and how it has often applied to Democratic primaries, but now is very salient on the GOP side (we recommend his CNN piece for a fuller exploration of this dynamic).

Basically, on the GOP side, the “wine track” means having a 4-year college degree, while “beer track” means not having a 4-year degree. Trump won in 2016 by not only doing better among beer track voters than wine track voters, Brownstein writes, but also because wine track voters were more divided in 2016 among different candidates than beer track voters were.

This blue collar/white collar divide is evident in polling. For instance, a recent national survey from the GOP firm Echelon Insights showed Trump leading DeSantis 46%-31%, with Pence at 9% and Haley at 6%. Trump dominated among those who do not have a bachelor’s degree, 54%-27%, but DeSantis led Trump, narrowly, 36%-33% among those who had a bachelor’s degree or more. The Pence/Haley combo also got more support among college graduates -- 22% combined compared to 11% among the non-college group. This poll -- and others show similar findings -- illustrates the basic dynamic: Trump is stronger with the non-college group than the college group, and the college group is more divided than the non-college group.

We can see this at the state level, too. The GOP firm Differentiators polled likely Virginia GOP primary voters in late February, finding DeSantis up 37%-34% in a multi-candidate field. But the regional splits were telling: DeSantis led Trump by 14 points in the highly-educated Washington, DC suburbs/Northern Virginia region, while Trump led DeSantis by 17 points in rural, western Virginia, where 4-year college attainment is not nearly as high. This reflects the pattern we saw in Virginia in the 2016 primary: Trump beat the second-place finisher, Rubio, by about 3 points statewide. Rubio won the core DC suburban counties, as well as Richmond and its most vote-rich suburban counties. Trump won almost everywhere else, including landslide margins in many western Virginia locales.

So one can see the outlines of a dynamic similar to 2016, and how in order to defeat Trump, a single candidate likely needs to consolidate the “wine track” (college-educated) vote at least as well as Trump consolidates the “beer track” (non-college) vote. That candidate very well may be DeSantis but, again, we’ll just have to wait and see.

While individual states varied, exit polls in many GOP contests in 2016 pointed to an overall electorate that was basically split 50-50 between those who held 4-year college degrees and those who did not. Non-college voters more clearly outnumber college-educated voters in the broader electorate, but remember that primaries (even very competitive ones) are going to have lower turnout than presidential general elections, and that people with degrees are likelier to vote than those who do not have degrees. That said, it’s also possible that exit polls, which have a reputation for overstating the education level of the electorate, may have suggested that the 2016 electorate had a bit higher of an education level than it did in reality.

Trying to determine the education level of the likely GOP electorate is going to be a challenging but important task for pollsters in the leadup to the primary season, because there is likely to be a difference in the preferences of college graduates versus non-graduates, with Trump drawing more support from voters who do not have a 4-year degree and his main rival, or rivals, doing better with those who do have a 4-year degree.

3. Watching for a Carson or Cain

Though the 1988 presidential election is most remembered for its largely negative general election campaign between then-Vice President George H. W. Bush (R) and Gov. Michael Dukakis (D-MA), it was also the first of 3 attempts that Joe Biden made at the White House. While Biden ended up dropping out before the first primary votes were cast, there were a handful of other Democrats in the running -- the press sometimes referred to the group of hopefuls as the “Seven Dwarfs.”

Some primaries that have taken place more recently -- namely the 2016 GOP and 2020 Democratic contests -- have felt more like watching 101 Dalmatians, to use another Disney reference. In the latter primary, roughly 2 dozen candidates ended up participating in at least one debate.

The ballooning number of candidates in recent cycles has been driven, at least to some degree, by the entrance of lesser-known, electorally inexperienced candidates. Could one or more of them break through, at least for a time, in 2023 or 2024?

Trump is the ultimate example of what has become a familiar dynamic on the Republican side: Someone with no previous elected experience achieving prominence within the party. But there were other examples in recent GOP presidential primaries. In late October/early November in 2011, the late businessman Herman Cain took a lead in national GOP primary polling. Four years later at almost the exact same time in the GOP primary, Trump very briefly relinquished the national polling lead to Ben Carson, a prominent former neurosurgeon. Neither first-time candidate lasted at the top for very long, and both ended up as afterthoughts when the voting actually began, but we do wonder if we may see similarly shocking rises this time.

It may be that the dominance of Trump and DeSantis prevents anyone else from breaking through. But if someone does, it may not necessarily be the most obvious, or most experienced, alternatives who do.

4. Home cooking

One thing to watch out for, especially as candidates enter the race, will be the strength of candidates in their own home states. Throughout the past several primary cycles, some candidates have been able to perform well in their home state, or region, despite having limited support elsewhere. For someone trying to actually win a nomination, doing well in one’s home state seems like a prerequisite.

One of the more recent examples, on the Republican side, came in 2016: Kasich carried his home state by 11 points over the then-ascendent Trump. Though it earned the governor a less-than flattering nickname -- after that mid-March contest, Trump derided him as “1 for 38 Kasich” -- it did give the Kasich campaign some credibility, in that he became 1 of only 3 candidates in a wide field to actually beat Trump in a nominating contest. The Ohio primary that year also previewed some of the dynamics that took hold in the general election: Kasich took majorities in several metro counties, but Trump won almost every county in the state’s post-industrial Appalachian east. Still, on that same primary day, Trump easily won Florida over home-state Sen. Rubio, which pushed Rubio out of the race.

In past cycles, the “favorite son” effect has made some contests that occur earlier on the calendar less predictive. In 1992, the Iowa caucus, which kickstarted the campaigns of future presidents Jimmy Carter in 1976 and Barack Obama in 2008, got little attention. That year, its home state senator, prairie populist Tom Harkin, was running. As other Democrats eschewed Iowa, and Harkin won with close to 80% of the vote. But in the next contest, the New Hampshire primary, Harkin’s fourth place showing cast doubt on his national viability. Bill Clinton, a southerner who finished second to former Sen. Paul Tsongas of neighboring Massachusetts, meanwhile spun his relatively strong showing by famously declaring himself the “comeback kid.”

South Carolina -- which has, all things considered, been one of the more predictive early states -- has also occasionally been impacted by home region candidates. In the 2004 Democratic contest, Sen. John Edwards, from next door North Carolina, won the contest handily but struggled in subsequent primaries, although he remained competitive in some other southern contests -- most notably, he won his home state’s caucus despite having dropped out. Edwards, of course, eventually found his way onto the national ticket that year. In early 2012, former House Speaker Newt Gingrich (R) seemed to have some momentum but similarly stalled out -- he carried South Carolina and then his neighboring home state, Georgia, on Super Tuesday. Former Sen. Rick Santorum (R-PA) then emerged as the most viable conservative alternative to eventual nominee Mitt Romney (R-MA). Had Gingrich not been in the running, would things have been different if his voters consolidated behind Santorum?

The 2024 GOP field might include at least 2 South Carolinians, each of whom could conceivably have some similar home-state appeal: former Gov. Haley entered the race last month, while Sen. Scott has been sounding like a candidate in recent months. Still, with presidential politics becoming more nationalized, the home state bonus candidates receive has been lessening. In the 3 most recent South Carolina polls (all from conservative sources), Trump and DeSantis were first and second in the state, with Haley and Scott behind them.

In our home state, Gov. Glenn Youngkin (R-VA) has been widely rumored to be an eventual national candidate. While he gets a near-unanimous (87%) positive favorability from Republicans in the commonwealth, the aforementioned Virginia poll from the Differentiators found him taking just 6% against a field of potential candidates (another February poll from Roanoke College found Youngkin also at 6% in Virginia). Gov. Chris Sununu (R-NH), a Trump critic and potential candidate, polled at just 7% in a recent Emerson College survey of his home state. To the extent that any of these announced or potential candidates break through, one would think they would first have to show significant strength at home.

5. Trump’s candidacy is without modern precedent

Trump is effectively in an unprecedented position in the modern history of presidential nominations, a time period that covers basically the last half-century, when presidential nominations became much more about winning primaries and caucuses as opposed to using backdoor wheeling and dealing to win the nomination at the convention. In that timeframe, Gerald Ford, Jimmy Carter, George H.W. Bush, and Trump lost reelection bids. None of the prior trio later sought a return to the presidency, although Ronald Reagan and Ford did discuss the latter joining his ticket as the vice presidential nominee in 1980. So what Trump is attempting is unfamiliar, as is so much else about his political persona.

In a webcast held shortly after the 2020 election, longtime Almanac of American Politics co-author Michael Barone looked to history when evaluating the GOP’s future. One of Barone’s conclusions was that past Republican presidents were typically popular with their party while in office, but had difficulty winning over their fellow partisans when trying to stage a comeback.

The best example of that phenomenon was from over a century ago (which, again, speaks to how rarely former presidents seek a return to the White House). After leaving office, Teddy Roosevelt remained a popular figure, and actually finished first in most states that held Republican primaries in 1912 -- but he could not convince Republican convention delegates to dump his successor, William Howard Taft. Roosevelt famously ran as an independent “Bull Moose” candidate in the general election, which handed the presidency to Democrats. Pundits have discussed the prospect of a third-third party run by a snubbed Trump since at least 2016, but looking to 2024, Trump may face some logistical hurdles if he opts to go that route.

While history has not been a perfect guide in today’s politics -- a recent example being Democrats overperformance in last year’s midterms -- Trump’s standing with Republicans is not as strong as it once was -- a sign that the party may be ready to move on.

Trump is probably the favorite to start, if only because -- as mentioned above -- we need to see how DeSantis performs. If the Florida governor does enter, and does maintain or grow his level of support after becoming a candidate, then the battle for the nomination becomes more of a coin flip.

IRAN

Iran's most senior Sunni cleric has called for schools to be closed as poison attacks continue across the country, while authorities have accused protesters of being behind the incidents.

Iran has jailed an Irish-French citizen for up to six and a half years his family has said, adding that his life is in danger due to health problems.

The US Treasury Department marked International Women's Day by issuing sanctions against two senior Iranian prison officials responsible for serious human rights abuses against women and girls.

Dozens of British-Iranian women marched through the centre of London wearing red cloaks and white bonnets, similar to those worn by female characters in Margaret Atwood's dystopian novel, The Handmaid's Tale, showing support for Iranians who took to the streets following the death of Mahsa Amini last September.

A coalition of Afghan and Iranian women leaders and international lawyers launched a global campaign yesterday urging the world to recognise gender apartheid as a crime under international law.

ISRAEL

Militants in the Gaza Strip fired a rocket and detonated an explosive yesterday, Israel said, hours after its soldiers killed six Palestinians in a raid in Jenin.

US Defence Secretary Lloyd Austin's Israel trip was cut short due to protests, as demonstrations continue against the proposed plan to overhaul the court system and violence surges in the West Bank.

Prime Minister Benjamin Netanyahu is expected to travel to the Ben Gurion Airport from Jerusalem by helicopter ahead of his trip to Italy today, to avoid protesters who have threatened to block roads.

UAE

First lady of Ukraine Olena Zelenska and former US secretary of state Hillary Clinton batted for women's rights at the Forbes 30/50 Summit held in Abu Dhabi yesterday. Ms Clinton then met New York University Abu Dhabi students during her visit to the capital.

Arif Naqvi, the founder of what was once the largest private equity fund in the Middle East, Abraaj Group, has lost his appeal to challenge his extradition from the UK to the US to face criminal charges of fraud and money laundering.

The UAE’s lunar mission manager Hamad Al Marzooqi is preparing for a 'risky' Rashid rover landing in the coming weeks, after more than half of Moon-landing missions have failed so far.

SYRIA

At least four people have been reported killed in a drone strike in Deir ez Zor, eastern Syria.

Increased engagement with Syria might pave the way for its return to the Arab League as ties thaw after more than a decade of isolation, Saudi Arabia's Foreign Minister has said.

The UN's special envoy for Syria reiterated calls for revived peace talks following the February 6 earthquake that killed at least 5,000 people in the northern part of the country and at least 45,000 in Turkey.

The UAE has sent 151 relief flights to support earthquake-hit Syria, delivering 4,925 tonnes of aid in the past 30 days.

EGYPT

Egypt is looking to fellow Arab nations to persuade Ethiopia to accept a legally binding deal on the filling and operation of the Grand Ethiopian Renaissance Dam, the country's Foreign Minister said.

LEBANON

A UN investigation into the Beirut port blast could eventually be carried out as a result of a joint statement issued before the Human Rights Council on Tuesday in Geneva, a French diplomatic source has told The National.

Lebanon’s commercial banks do not have the liquidity to return money to depositors who retain their savings in the country's bank accounts, the head of the Lebanese banking association said.

TURKEY

Women who braved a ban on an International Women’s Day march in Turkish city Istanbul were hit with teargas by police who also made several arrests.

SUDAN

Paramilitary commander Gen Mohammed Hamdan Dagalo has slammed the ruling generals and said they oppose stepping down to allow a democratic transition under a civilian administration.

YEMEN

Eleven women and three children have died after a boat sank off Yemen’s province of Hodeidah, the Houthi-run Saba news agency reported.


 

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