On November 3rd, Americans will decide on who will be the next president of the United States. While every presidential election is considered the most important ever at the time, this one clearly comes at a time when America and the world stands at a fork in the road, disrupted, disoriented and disunited. The next president will inherit a country that is more divided that at any point since the Civil War, with the country increasingly splitting along racial, socio-economic and geographic lines that are driving increasing civil unrest and with the country’s government paralysed by widening political partisanship. The Russian heirs to the fallen great power, the Soviet Union, must be delighted, as must be the rapidly rising great power of China. Against this backdrop, the winner will need to chart the country’s near-term path through an ongoing global pandemic and the worst economic depression in nearly 100 years. Over the longer term, the winner will need to position the country in a world being reshaped by climate change, technological disruptions, the rise of China, shifting international alliances and increasing challenges to the system of capitalism that has formed the source of its power and prosperity over a century. Calculations suggest China is set on a course to overtake America in economic terms - the bulwark of any great power - as early as 2031 unless America can rethink its approach dramatically.1 This presidential election, in other words, truly matters, and the two candidates could not have more different views on how to address nearly every one of the main challenges.
While the rest of the world will not get to vote, of course, and can only hope that American’s elect a president that they believe to be good for them, international public opinion is clear, with 64% of respondents across 32 countries polled saying they do not have confidence in President Trump to do the right thing in world affairs, while just 29% express confidence in him. Moreover, with 60%-68% disapproving of the U.S. position on issues across trade, climate change, and foreign policy, fewer people express confidence in Trump than in any other major world leader.2 Should the incumbent president win the election, he will have to steer the country through a world that has little confidence in him as America faces some of the gravest challenges since its independence.
This month’s Sign of the Times lays out the key agenda items for the next presidential administration, highlighting the scope and scale of the actions needed to address the issues facing America, and contrasting the different approaches that Donald Trump and Joe Biden have taken, or said they will take, for each of these defining items. Underlying these diametrically opposed approaches are two very different views of the world and of America’s place within it, and the winner of the election will have a substantial role in the future transformation of the country and the world and large. This November, the American people will need to decide which of these two very different futures they wish to live in.
The Election at the Global Inflection Point
America is about to pick the man in whom to place the power of the world’s greatest military and economy as well as the greatest issues facing mankind, perhaps in history.
Every election matters. Elections are the most visible element of democratic government, the affirmation of man’s inalienable right to self-governance and a critical tool for government accountability. US presidential elections generally are among the world’s most important, given the extensive power of the office of the president to govern the country, and the country’s own power over the rest of the world.
The 2020 presidential election, however, stands out as one of the most important elections in a generation or more. It is occurring in the middle of the deepest global recession since the Great Depression and within a global pandemic that has failed to elicit any form of coordinated global response in the absence of US leadership. It is occurring at a time when the country itself finds itself increasingly divided over questions of politics, values, ethnicity and increasingly facts, with common ground receding further and further away. It is occurring at a time when technology is fundamentally disrupting our economies and societies, shifting industrial age economic patterns and throwing into disarray millions of livelihoods.
Perhaps, most importantly, this election is occurring at a time in which American global leadership, and the liberal world order it has supported, stand at the brink, challenged by both internal threats in the form of national populism3 and by external challengers, most critically by an assertive and rapidly rising China which is now the sole bastion of economic growth during the current recession and is charting an increasingly assured course towards global superpower status. Given the US may have less than a decade before its economy is overtaken by China’s, the choices by America’s next leader will be critical in shaping the country’s response to China and charting its own trajectory not just along economic dimensions, but in political, military and technological ones as well. Given China’s own authoritarian political and economic model, this trajectory is not just critical to the US, but to the future of all liberal democracies and the western values they would like to see as universal. So, this electoral choice will likely determine the broader trajectory of American leadership for the remainder of the 21st Century.
The Agenda for the Next President of the United States
It is abundantly clear that the two presidential candidates, Donald Trump and Joe Biden, have almost diametrically opposed views of America and its leadership role in the world. The past four years of the Trump administration and Biden’s almost 40 years in public service leave few unknowns about how each candidate will directionally lead America and thereby how they will shape the future of the world more broadly. On November 3rd, it will be up to the American people to choose, and thereby determine what sort of society and world they and their children will live in.
The Issue in Summary. Americans have lost over 230,000 lives of the 1.1 million lost worldwide and the spread is rising in America leading up to winter. The ongoing coronavirus pandemic continues to remain the most urgent issue facing America today and one that will almost certainly remain unresolved by the 59th presidential inauguration in January 2021 when the winner of the election will begin his term. Daily new infections in the US in mid-October crossed 70,000, the highest levels since the peak in July, with total deaths projected to cross 400,000 by year end.4 The US stands as the leader in its death count alongside Brazil, Mexico and Russia.
The Benchmark for Action. Most of the world have tackled the pandemic with a range of measures that have brought it under control from the very early days of its spread. The benchmarks include Germany, Japan and South Korea. A previous Sign of the Times5 had laid out the need for a wartime approach to managing the pandemic, integrating economic, health policy and political actions to comprehensively defeat the virus while minimising the economic fall-out. Such a plan will need to be executed in partnership with regional and local authorities, ensuring that appropriate containment measures are put in place where and when needed, economic fall-out is minimised and track and trace systems are efficiently utilised, alongside a national and international effort on improving treatment protocols and a potential vaccine.
The Candidate’s Views. In terms of the candidates’ positions, much like those parts of the world that have their lives and economies back to some semblance of normality, Biden has committed to following the overwhelming view of scientists in pursuing a series of multi-pronged plans to fight the virus,6 and in parallel work to be in a position to safely open the economy, while Trump has largely ignored the risk of the virus and the need for protective measures, speculating on potential solutions, setting the example himself, and encouraging people, regardless of local conditions to reopen for business as usual.
The Issue in Summary. America is more polarised politically and ideologically than at any time since the Civil War. It is almost as if a Cold War is playing out within the country. While partisanship has always been a feature of the country’s two party political system, it is hardening to the point where bipartisan legislation is becoming increasingly impossible, with 60-70% of the public believing that the other party is a serious threat to the country.7 Further, party allegiance is increasingly shaping opinions on issues outside of the realm of politics, determining views on the role of science in determining policy, the level of trust in experts and public institutions and faith in all manner of subversive conspiracy theories. The thwarted militia plan to storm, kidnap and kill the Michigan state’s Democratic governor, Gretchen Whitmer clearly crossed a critical red line for the nation. America’s next president will need to calm the nation, speak up for and protect their critics and political rivals, narrow and, if possible, close this widening societal and political divide if America is to be a stable nation eschewing communal violence and addressing the many challenges to its prosperity and position in the world.
The Benchmark for Action. America’s own history teaches us that civil wars are among the most vicious conflicts a country can face, a fact that continues to be true through the current day. The lessons from divided nations and territories, whether in Northern Ireland, Israel and Palestine or India and Pakistan in Kashmir repeatedly demonstrate that enmity is not resolved through animosity and hatred. While America is not yet at the levels of violence experienced during the Times of Troubles in Northern Ireland, the country’s 1998 Good Friday Agreement is a good example of what it takes to bridge deep partisan divides: the engagement of all stakeholders, compromise on all sides, and the creation of interlocking and interdependent institutions to guarantee the rights and obligations of all parties.
The Candidates’ Views. Mr Trump’s approach has been to give a voice to those who feel at odds with or threatened by liberal values, with public displays of contempt and ridicule for his opponents’ views. While this has energised parts of his base, it has also energised the resistance of his opponents. So, the outcome to date has been the exacerbation of divisions, increasing the support from those that support his views, threats towards his political opponents and parties, raising the voicing of unspoken prejudices on social media and triggering violent initiatives by armed factions of right-wing fringe and racists groups empowered by what the president says (and fails to say). Mr Biden has taken the opposite approach, making the need to restore national unity a central theme of his campaign, encouraging acceptance of differences of view, much in line with previous presidents from both parties, and his campaign is already well backed by a range of “traditional” Republicans.8
The Issue in Summary. America continues to be rocked by civil unrest and intermittent rioting in urban areas following the killing of George Floyd by police earlier this year and several subsequent actions of individual police officers raising the spectre of brutality against black people. This unrest has raised awareness of the broader plight of minority communities across the country and the racial inequality they suffer, while the polarising effect of the riots have shed light on the country’s division over questions of race that continues to blight parts of American society. The left has been largely cast as supporting the cause of the protests and the right as feeling maligned as racists over their prioritisation of law and order over issues of racial justice and equity.
The Benchmark for Action. Addressing America’s centuries long history of racial inequality is no small task to be sure, but one that recent events have made more urgent than ever. There is no answer for this problem from any corner of the world that is obvious. However, the answer is likely to be of the magnitude of leadership and method of reconciliation pursued by South Africa’s Truth and Reconciliation Commission initiated by Nelson Mandela following the end of the apartheid era. This serves as an example of a country attempting to heal deep racial divides in a programme of restorative justice. America will likely require a similar programme of soul searching in recognition of historic injustices if it is to create a common base from which to move forward and have a chance of reconciling differences and creating a more equitable society going forward.
The Candidates’ Views. President Trump has often stated that he is the best hope for Black Americans to succeed. This has of course not alleviated the sense of racial injustice among the black population and its sympathisers given he has not seen the need to acknowledge the nature of their challenges and the need for greater racial justice, going so far as to to directing federal government agencies to discontinue anti-bias and racial sensitivity training for their employees. He has also denied the systemic issue of police violence against the black community, focusing on the need for more law and order to address political violence from the left and has personified the political movement ‘Antifa’ as domestic terrorist organisation (rather than the FBI’s definition of it being an idea not a group).9 Biden has openly called for an end to violence, an end to police violence against black people and at the same time called for effective law enforcement, as well as putting forward a series of economic, social and legal initiatives to address racial inequality in the United States.
The Issue in Summary. In the last four years, America has withdrawn support, funding or its leadership position in a number of the major institutions and treaties including the Paris Accord, the Transpacific Partnership, the WHO, UNESCO, and the United Nations Human Rights Council, and has allowed China to lead four of the 15 specialised agencies that carry out the work of the United Nations.10 President Trump has called NATO obsolete and refused to confirm the US’ continued commitment to its members’ collective defence, the underlying idea of the military alliance, undermining its credibility.11 He has further stated that the EU would best be broken up, supporting Brexit and promising to reward the UK with a trade deal. The president’s embrace of Russian President Vladimir Putin has been a cause for concern among both allies and large parts of the US security community given that Russian interference in the 2016 election in the president’s favour has been widely recognised.12 While the transactional approach that Trump has taken can and has resulted in some breakthroughs (Gulf State-Israel normalisation), it has also shown limited consideration for longevity and unintended consequences (e.g. dismissing the Iran nuclear deal, approving of the blockade on Qatar, or providing status to the North Korea’s dictatorship).13 The Trump Administration’s actions have mostly created a leadership void that leaves global issues unmet or being addressed by countries with policy objectives that are not in America’s best interests. China, in particular, is emerging as a great power and has extended its reach into America’s traditional spheres of influence across the EU, South America, and parts of Asia.
The Benchmark for Action. America’s reorganisation of the global order in the wake of the Second World War in the form of the Bretton Woods system and the creation of the United Nations is an appropriate benchmark. This reorganisation established a system of objectives, ground rules and institutions ultimately overseen and safeguarded by the US which delivered the peace and prosperity of the post war era through the current day. This system of course needs renewal and the challenges have changed but the approach has proven to be successful for peace and prosperity.
The Candidates’ Views. Trump’s level of engagement with foreign powers and allies has appeared to be based on whether world leaders are complimentary personally to the president, regardless of the nature of the issues being discussed.14 The level of trust in him is low across the world and in comparison to every major world leader.15 At the core though Trump’s approach is based on transactional deal-making, seeking to maximise a set of narrowly defined and often short-term benefits, often in a zero-sum manner that de-emphasizes or ignores long term or large scale interdependencies and consequences. Biden has explicitly refuted most of Trump’s foreign policy actions and has called for a reset of “America First”, stating his intention to re-join the WHO, the Iran nuclear deal and the Paris Accord and to boost diplomatic ties with NATO and the EU, (while importantly continuing to endorse the Trump administration’s Middle East Policy) with the aim of resuming America’s position of global leadership.
The Issue in Summary. As China has strengthened their centralised grip on their country, more aggressive in its foreign policy and more successful economically, US policy makers have begun to form a consensus on the failure of its China policy, formed during the Nixon administration, based on constructive engagement encouraging China’s peaceful rise as a liberal (if not democratic) member of the international community. America has been unable to reign in China’s political and mercantilist ambitions, whether its territorial expansion in the South China Seas, its imposition of a security law in Hong Kong that is seen as a violation of the Sino-UK handover treaty or its continued appropriation of international intellectual property.16 With a decade or less left to America’s economic output advantage,17 the country appears no longer in a position to contain China on its own. Previous approaches of constructive engagement and economic pressures have failed to yield results satisfactory to the US in terms of changing the country’s behaviour, domestically or internationally.
The Benchmark for Action. US strategies employed during the Cold War provide a potential set of approaches for engaging China, alternating between containment, détente and open competition as the situation required. However, while this enabled the US to successfully halt the further expansion of the Soviet Union and its influence in the world, it is important to note that its own underlying economic fragility was critical to its eventual downfall, and so the Soviet Union defeated itself as much as it was defeated by the US. China’s economy in comparison remains robust and America seems highly unlikely to win an economic war of attrition with it. A strategy that successfully contains China will require full and unwavering allied support. However it will also need a far more radical vision, including taking lessons from the EU which created a coalition of small nations in Europe that together form one of the biggest trading blocs in the world but alone would not be force.
The Candidates’ Views. While the Trump administration’s stance on China has continued to toughen relative to its predecessors it has largely done so in a unilateral and more or less exclusively economically focused fashion and, if previous foreign engagements are an indicator, seems to be set up for a deal.18 This approach will clearly not affect strategic change. Biden has promised to be tougher on China, stating his intent to rally international allies to the containment effort and to widen the scope of engagement beyond the economic realm, much like the early stages of the Cold War, while keeping the door open to partnership with China on areas of overlapping interest.
The Issue in Summary. The world is increasingly being driven by the technologies of the emerging information age including digital technologies, alternative energy technologies, biomedical and nanotechnologies. These technologies will be the critical drivers of economic value, development and increasingly geostrategic power. While America has traditionally led the world in technology innovation and commercialisation, China has launched a concentrated push across key technologies like 5G and AI with the ambition to be independent of the US and others and indeed set the next generation of technology standards by 2030 and diffuse these and its domestic technology globally along a ‘digital silk road’ uses. US investment banks and investors play a major role in the funding, IPOs and success of Chinese technology-based businesses as the Alibaba and Ant Financial cases show. For the US to lead during the remainder of the 21st Century it will need dominate the next generation strategic resources of information and innovation.
The Benchmark for Action. With China’s government enjoying a much higher degree of control over its private sector and economy as a whole, the US will need to effectively promote, fund, coordinate and deploy innovation carried out by a broad mix of private, public and academic institutions, much like it did in the 1960s during the Gemini and Apollo programs, which adjusted for inflation cost over $280bn.19 Over the next decade, the US will need to launch similar scale ‘Space Race’ efforts in parallel across AI, telecoms, clean tech and other critical technologies.
The Candidates’ Views. Both candidates are clearly in favour of increasing innovation and building out US tech leadership over China, while having an increasingly complex relationship (for different reasons) with ‘Big Tech’’; President Trump’s issues with it stem from his perception of their liberal political bias and particularly against him personally, Biden’s because of increasingly strong calls from the progressive wing of his party to bring Big Tech under control. Both are prepared to look at breaking up or heavily regulating America’s largest tech companies. Both will need to reconcile the need for global dominance with accountability. Perhaps the largest difference between the candidates though is on the topic of energy innovation: The Trump administration’s latest budget request slashed direct federal investment in applied energy programs by more than 44%, while Biden has called for an additional US$400bn of federal investment across clean energy as a whole to spur innovation.
The Issue in Summary. America’s GDP is projected to contract by 8.0% in 2020, largely due to the impact of the coronavirus and resulting shutdowns. And while growth is expected to rebound to 4.5% in 2021,20 largely due to the influx of significant further stimulus with bipartisan support, the country faces a number of structural issues that will impact its ability to deliver prosperity to its people over the long term. Falling labour participation due to an increasing number of retirees, slowing productivity gains, increasingly polarised wealth and income distribution and rising levels of overall poverty are all challenges that America’s next president will need to address. To these structural trends can be added a series of longer term secular trends like the coming energy transition, increasing robotisation and automation and digital and technological substitution of physical world businesses which are changing the fundamental competitiveness of whole industries and regions, and putting further long term pressure on parts of the economy.
The Benchmark for Action. Battered by COVID-19, like much of the rest of the world, the US will need a more comprehensive recovery plan than the measures that have been enacted to date, which have largely focused on loan forgiveness and guarantees, tax rebates and expanded unemployment benefits, in addition to increased central bank liquidity. Following the Second World War United States rebuilt Europe’s economies with the Marshall Plan, removing trade barriers, modernising industry, creating prosperity, and preventing the spread of communism. With parts of the US economically devastated, structurally uncompetitive and with National Populism gaining hold, a similar domestic programme may now be required.
The Candidates’ Views. Publicly touted ‘wins’ over US manufacturers investing capital to create job at home aside, President Trump’s signature economic win over the past four years has been a US$1.5 trillion tax cut, which disproportionately benefited high income earners,21 massive equity market volatility from policy pronouncements by twitter and other methods, alongside a continued pumping of liquidity into the stock market, which has performed strongly on the back of higher liquidity. Looking ahead, Trump wants to roll forward these tax cuts while Biden would roll them back, increasing the top federal income tax rate from 37% back to 39.6%, the top rate prior to 2018, and the corporate tax rate from 21% to 28% (vs. the pre-2018 rate of 35%)22 coupled with a massive US$4 trillion programme to rebuild the economy.23 Both candidates on the other hand support increased infrastructure spending to create new jobs, with Biden’s proposal adding green energy investments and increased healthcare spending to drive employment in these sectors. Both, for different reasons, are set to boost the capital markets and the economy.
The Issue in Summary. Climate change outside of the US, is almost universally acknowledged as an existential threat to the world.24 The United Nations has reported that global carbon emissions need to be cut by 45% by 2030 in order to limit the average rise in global temperatures to 1.5C and to avoid further fuelling the heat waves, droughts and wildfires that are becoming harder and harder to ignore and are estimated to cost up to US$1 trillion globally over the next few years.25 In America on the other hand, the very existence of climate change has become a question of party politics, with most Democrats embracing the international view and large parts of the Republican establishment and electorate denying the underlying science of climate change and the existence of a problem that is susceptible to man-made solutions, and less than a third of Republicans believing that climate change is a major threat to the well-being of the country, as opposed to over 80% of Democrats.
The Benchmark for Action. There is frankly no benchmark for political leaders to turn to when looking to address climate change. While the world has developed mechanisms to address other long term and global challenges like nuclear proliferation, the causes of climate change are inextricably entwined with our economic systems, our societies and our way of life, with 7.9 bn people contributing to the problem, even though richer nations contribute more, (rather than just the leaders of a handful of countries with nuclear weapon capabilities). Solving climate change will therefore require more than an international treaty, it will require a change in global awareness that changes the decisions of citizens as voters, consumers and individuals, building bottom up demand for change and a willingness to bear the transition costs associated with a sustainable future. While no country can impose such leadership upon the rest of the world and no leader can impose such change on his or her people, America and its president have the potential to be a moral force for change and one that leads by example.
The Candidates’ Views. On matters of climate change the two candidates diverge to opposed positions. President Trump has appealed to his conservative Republican base on matters of climate change, calling it mythical, a natural phenomenon, a hoax by China and mocking alternative energies like wind power. His actions have followed these positions including withdrawing the US from the Paris Climate Accords, opening the Arctic National Wildlife Refuge to oil drilling, rolling back over 100 environmental rules and regulations many of which were bipartisan and decades in the making, and cutting the budget of the Environmental Protection Agency by over 30%. Joe Biden has called it the number one issue facing humanity, vowing to re-join the Paris Accord and to lead the world in developing solutions. He has proposed a US$2 trillion green energy plan that will see US electricity generation becoming carbon free by 2035, and the whole country carbon neutral by 2050, a decade before China’s pledged date to achieve the same goal.
The Issue in Summary. Both populists and socialists believe in the need to reform the economic model of US libertarian capitalism that has driven US development and prosperity for the past century. US real wages have remained largely flat for decades, causing income inequalities continuing to widen, one of the key drivers of support among large swathes of the electorate for protectionist, nationalist and isolationist policies.26 The Trump administration began with undermining multilateral trade and globalisation. Interventions in the capital markets followed and fuelled by cheap liquidity, have largely de-synchronised the markets from the reality of ‘ordinary people’ dependent on the underlying economy, with the NASDAQ up nearly 30% YTD despite the economy contracting nearly 9% this year. Imbalances and inequalities are now making the resilience of the system questionable, including of the US dollar, the US markets and US competitiveness in the face of a surging China and other rising regions in the world.
The Benchmark for Action. America’s system of capitalism having proven itself as the winner against communism to emerge as been the leading system of enterprise for the world, is being challenged by China’s mercantile, form of state capitalism. This system includes the endorsement of national champions, the protection of the state, the use of the world’s IP for free, the inclusion of investment capital from the world, protectionist policies in the domestic market and accessing the rest of the world as an added customer base for its locally bred giants to compete for. Any sustainable system of enterprise for the US will need contend with this form of capitalism in being an effective competitor that can launch effective offensives in diverse foreign markets and create prosperity at home.
The Candidates’ Views. The battle is not between capitalism and socialism. Both presidential candidates are capitalists, and neither is a libertarian or free market capitalist. President Trump’s economic ‘philosophy’ or instincts appears to be what can be called “Populist Darwinism”. Populist in the sense that promises are made and benefits touted that will appeal to a mass of the population, Darwinist in the sense that the tax cuts that make up the bulk of his economic plan benefit groups with disproportionate wealth and power (in this case, corporations and high income households). Given that these have failed to result in broad based prosperity (as evidenced by the the country’s median wage growth, overall GDP growth, and changes in manufacturing output, among other indicators),27 they are widening rather than closing the income gap and so creating a less fit society. Biden’s economic plan appears to combine Keynesian orthodoxy with structural rebalancing: massive stimulus and infrastructure investment driven by debt on the one hand alongside significant investments in education, healthcare and future growth industries combined with (what most of the world would see as mildly) progressive taxation impacting high earners and corporations.28 This plan certainly attempts to address some of the challenges facing the system today and will probably alleviate some of its worst symptoms. However, neither approach is likely to reverse the tide of China’s economy eclipsing the US’ in a decade.
The Issue in Summary. During the era of American world leadership, history has shown that when the world does well, America does very well. America has led a global revolution built on trade, globalisation and democracy, underpinned by rules of engagement enshrined in international institutions. The election of President Trump inaugurated a new age of America seeing the world as series of trading partners, independent of the machinery of international institutions it had put in place. This has left its global standing diminished and the trust in it as a force for good at a low point in the post-war period, with only 34% of respondents across 13 major countries currently having a favourable view of the US (down from over 60% during the Obama Administration) and even fewer with a favourable view of this president.29 America’s enduring power and ability to continue to extract value from trade with the world requires it to be the world leader. If it is too tired (or not competent) to do so, it will quickly find itself a rule-taker. For its leadership to be credible again, it will need to rebuild the lost trust.
The Benchmark for Action. Barack Obama had demonstrated that international perceptions and America’s reputation can be turned around in a very short period of time. Confidence in then President George W Bush, in 2008, following two wars in the greater Middle East was below 20% in in Western Europe. Obama’s active outreach to Europe and his recommitment to the transatlantic partnership quickly turned around perceptions of the American president, reaching into the 90 percentages in many countries less than a year later. More importantly, confidence in Obama remained high in the world throughout his presidency, despite the president voicing many of the criticisms that Trump would later continue to do, such as Germany’s underspending on defence relative to NATO targets, Iran’s need to be under worldwide inspection and China to step back in the South China Sea, demonstrating that trust is not a function of agreeableness or passivity.
The Candidates’ Views. If the rest of the world could vote for the next president of America, this election would be a landslide victory for Biden it seems. For much of the rest of the world, “America First” sounds and feels like “America Only” (which was also mentioned in the speech) and Donald Trump is less trusted than Vladimir Putin and China’s Xi Jinping to “do the right thing regarding world affairs”.30 Joe Biden is seen as a local in America and a committed internationalist abroad who has stated his intention to rebuild trust in the global community and to reassume America’s leadership role in the world. It is important to note that Biden is also a patriot and a pragmatist: his vision for American leadership is also “America First” but in the sense of ‘America first among equals’ in a way that appeals to the hearts and minds of the world. Both candidates advocate placing American interests first but contrast in how they think that is best achieved and that difference is strategically significant since the wrong approach probably sets up China well for a greater role in the world.
Conclusion: Winning Through Unity or Through Divide and Rule
The American public thinks one of these candidates will set up a lost decade for America, they are just divided on which one of them will do that to them. What is certain is that this next decade is probably the most important decade for America and the world’s democracies given China’s economy is projected to leapfrog America in approximately a decade.
The two candidates for the presidency represent very different values, which are reflected in their style, approach and behaviours. As a result, their respective election will provide for very different outcomes for America and the World. President Trump presents the choice of a leader of a multi-factional America, based on divide-and-rule at home and abroad, that believes it can win in the world at large through muscle and satisfy their faction better than the opposition can. Presidential presumptive Biden presents the belief that Americans can find a common ground that is wide enough for opposing views, and a leader of a united America at home and abroad, where America wins by uniting with its allies and against its rivals. The choice is stark and depends on one’s world view.
Under a second Trump administration, at home, it seems likely the pandemic will continue to spread, without widespread availability of a vaccine or a safe path to herd immunity,31 leaving the US economy destabilised, the political divide will continue to widen with every vote being an opportunity to thwart the opposition, citizens will continue to feel divided and factionalised and domestic violence can be expected to rise, despite increasingly heavy-handed interventions by the federal government and its supporters, while financial markets will most likely rise on the back of low taxes and deregulation.
A continuation of the current administration’s policies abroad, will likely mean that America continues to gradually lose its 70 year grip on the instruments of international power embodied in the institutions that it led to establish and it will also lose the will of its allies in the EU (the most powerful of its allies) to follow America. It may gain ground in India for the much longer term, but India is not a substitute for an existing ally of the scale of the EU (and India will be an ally for Joe Biden too). China will offer a series of deals to spurned existing or aspiring US allies (and a deal perhaps to America too to de-escalate) that smooths its path during the next decade it needs to overtake the US economically. America’s allies will work with the US on individual projects of mutual interest rather than on the basis of shared fundamental values, no longer seeing the US as a reliable long term partner and so gradually learning self-reliance, strengthening regional groupings and beginning to align with a powerful China on many issues. The US will continue to compete with and seek to contain China but will find its ability to do so effectively decline as it stands increasingly alone in the world with the economic balance shifting against its favour.
A Biden presidency would see a very different domestic approach over the near term, with a comprehensive economic and health policy plan to mitigate the impact of the coronavirus, including a significant stimulus package that will see a quicker economic recovery.32 While it is unlikely that a decade of increasing political partisanship can be reversed in a single administration, particularly with the “progressive” wing of the Democratic party strengthening, a Biden Administration is more likely to seek bipartisan solutions on major policy initiatives, as well as seeking to create greater social and racial equity, thereby reducing the potential for further domestic violence. While capital markets may take a short term hit on the back of increased corporate taxation, easier US fiscal policy, a reduced risk of renewed trade escalation, and a firmer global growth outlook should provide a strong basis for both long term equity and economic growth.
Aboard, a Biden presidency would seek to restore the liberal internationalist strategy that has guided America for decades, reaffirming commitments to allies, re-joining and reasserting itself in international institutions and leading the international community to addressing the biggest global challenges. While this in practice may not quite equate to the globalist ‘love fest’ that its allies seem to dream of, it will provide for a more predictable and stable geopolitical landscape and sounder basis for shared action in the future. Such an America will also seek to stand up to China with an alliance of diversified partners and and so stands a better chance of containing China’s political and economic ambitions when they run counter to its and its allies interests and values, despite their actions periodically destabilising global markets and economies, at least over the short term.
Of course, it is up to the American people to decide which of these two Americas and worlds they want to live in, and both candidates have rightly framed the election as a stark choice, mainly by seeking to discredit their opponent and by painting dystopian pictures of what their victories would result in, either catastrophic socialism or increasing totalitarianism. While neither extreme is true, a last decade is not one that America can afford.
For either candidate to win, they will need to secure the support of a coalition of diverse voter groups, requiring some part of their vision to be overwhelmingly compelling to a given group. Such a coalition in 2020 for Donald Trump could include a number of key groups that seemingly had little in common. Firstly, it needs the hardcore republican base, that will vote along party lines regards of the issues above, such as evangelical Christians, paleoconservatives, and the alt-right. Secondly, the support of economically marginalised groups that have been neglected by the Democratic party, particularly blue-collar white males. Thirdly, the vote of small government libertarians wary of further government interventions over the coronavirus. Fourthly, the support of the wealthy who prioritise further tax cuts above almost all else. And fifthly, the support of citizens concerned by social unrest who focus on law and order, not to be underestimated as a sizable group. While such a coalition would have widely different world views, they would need to share a some core beliefs including the American Dream and a proto-libertarian form of capitalism, the primacy of individual choice and freedom as the highest values, the unassailability of American power, a view that the rest of the world needs America more than vice-versa, an acceptance of social and racial inequality (or at least the belief that they can be addressed without direct action) and the conviction that one cannot or need not address climate change. They may also need to believe that the alternative is worse.
For Biden a winning coalition would also consist of a number of disparate groups, but they appeal to far less extreme factions being mostly liberals and those alienated by the president. Their natural voters are firstly, the loyal Democratic base (including African Americans and other minorities, and unions). Secondly, they need young voters more attuned to the longer-term challenges of social and racial equity and climate change. Thirdly, the vote of college educated voters who have traditionally leaned left is a natural one. Fourthly, suburbanites traditionally attracted by moderate (and familiar) positions across a range of issues. The next two categories need to convert. He would need to capture senior citizens concerned about the coronavirus, that have traditionally leaned Republican. And independents and traditional Republicans turned off by the past four years of the Trump Administration would need to vote Biden. Such a voter base would need to share views that the American Dream is not working for everybody, at least in the current system, that wealth redistribution policies are fair and moreover necessary, that social and racial justice is an urgent issue that needs to be addressed, that individual freedom can be curtailed for the common good, at least to some degree, and that America is stronger with allies than it is alone. They may also share the view that the alternative is worse.
The fundamental views of each coalition laid out above represent the baseline of what an America under the different candidates might look like. Despite the demonisation of each party by “the other side”, it is clear that America, its people, and its institutions will survive (with some swings to right or left) and have the potential to thrive for a time under either scenario. However, in a bitterly divided America, almost half the population will be ecstatic next week, and half will be in despair. The world watches on anxiously too to see if America is to lead the world through working for unity or through a policy of divide and rule.
- See the August 2019 Sign of the Times: National Populism and the New World Order
- Source: Pew Survey on World Opinions Sept 2020
- See the August 2020 Sign of the Times: American Power – Mapping its Rise and Calculating its Fall (and Return)
- Institute for Health Metrics and Evaluation
- Source: May 2020 Sign of the Times: Waging the War
- Source: Joebiden.com
- Source: Pew Survey on World Opinions Sept 2020
- A group that includes the ‘Never Trump’ movement, multiple military leaders including the former joint chiefs of staff, and a number of current Republican officeholders including state governors and legislators
- Source: House Homeland Security hearing, testimony of FBI director Christopher Wray 17 September 2020
- Source: The Wall Street Journal
- Sources: Foreign Policy, BBC
- Including by the Central Intelligence Agency, the National Security Agency, the F.B.I., the Office of the Director of National, and the US Senate Select Committee of Intelligence.
- Sources: BBC, The Washington Post
- Source: Financial Times: Tickling Trump: World leaders use flattery to influence America
- Source: Pew Survey on World Opinions Sept 2020
- Source: 2017 updated report by the Commission on the Theft of American Intellectual Property.
- See the August 2020 Sign of the Times: https://www.greaterpacificcapital.com/thought-leadership/american-power-mapping-its-rise-and-calculating-its-fall-and-return
- Source: White House Report on China
- Source: The Planetary Society
- Source: IMF
- Source: Tax Policy Center: The wealthiest 20% of families in the U.S. saw their post-tax income increase by 2.9% on average after the cuts, while middle-income earners saw just a 1.6% increase,
- Source: https://taxfoundation.org/joe-biden-tax-plan-2020/, US Internal Revenue Service
- Source: Tax Policy Center
- Source: WEF Global Risk Survey, Pew
- Source: Reuters
- Source: The Institute for New Economic Thinking: The Economic and Social Roots of Populist Rebellion: Support for Donald Trump in 2016
- Capital spending steadily decreased in the two years following the tax cuts (Source: IMF), Average wages increased by less than half the rate projected (source: WSJ), GDP growth was 2.3% vs the 3% projected (Source: Congressional Budget Office) and manufacturing activity continued to decline (source: FT)
- With tax increases impacting only the maximum marginal tax rate for taxpayers with over US$500,000 in annual income
- Source: Pew Survey on World Opinions Sept 2020
- Source: FT
- Source: Goldman Sachs