:

SPECIAL REPORT

The Race for the White House

Madrid, August 2016

Barcelona • Bogota • Buenos Aires • Havana • Lima • Lisbon • Madrid • Mexico City • Miami • New York City • Panama City • Quito • Rio de Janeiro • Sao Paulo Santiago • Santo Domingo • Washington, DC THE RACE FOR THE WHITE HOUSE

1. INTRODUCTION

If the American elections were held today, Hillary Clinton would 1. INTRODUCTION be elected the 45th president of the United States. Over the last 2. THE BACKSTORY month, Donald Trump has fumbled away his brief lead in national 3. THE CANDIDATES polls and trails in the handful of battleground states that will 4. THE CAMPAIGNS ultimately decide who wins and who loses. Hillary Clinton has 5. WHAT MATTERS? been smart enough to let her opponent trip over his own ego and 6. THE MORNING AFTER political inexperience, without offering new targets to her many 7. THE MORNING AFTER THE enemies across the political spectrum. MORNING AFTER Pollsters, the media and elites have already declared the election all but over.

Figure 1. Clinton vs. Trump: the polls

Source: Huffpost Pollster (August 17, 2016)

But the election is not today, and pollsters, the media and –above all– the elites have been wrong about Donald Trump since he declared his candidacy in June 2015, saying, “We need somebody that literally will take this country and make it great again.” The fact is that Clinton can still lose and Trump can still win, and imagining a path to a Trump victory does not also require belief in Santa Claus or unicorns. Actually, against all odds, he already did in the primary elections. It does, however, require recognition that Trump is not a normal candidate that politics are going through a dramatic change in the rules of the game, that there is a deep malaise gripping significant numbers of Americans, and that the political and economic elite are largely disconnected from what is happening in much of the country.

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Trump is also blessed by having Hillary Clinton as an opponent. She is perceived by many –Republicans, Democrats and independents– as a flawed candidate; if she wins, she would enter office with the highest unfavorable ratings (53 %) and the lowest trust ratings (two-thirds of the respondents in a July CNN poll called her untrustworthy) of any modern U.S. president1. (Trump’s unfavorable –averaging 61 %– are even higher2.) In her own party, she had to beat back a surprisingly strong challenge from a 74-year-old senator, Bernie Sanders. There are many explanations, but surely the most compelling is that voters are deeply unhappy with the status quo, with politics as usual and with conventional politicians, and Hillary Clinton personifies all three.

1 CNN Poll, July 25, 2016 2 Real Clear Politics, August 12, 2016, average of recent polls

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2. THE BACKSTORY 15 years, mostly due to depression (suicide) and the But this election is not, in consequences of alcohol the first instance, about the and drug abuse3; candidates. Rather it is about a country in which two- • Americans tell pollsters thirds of citizens tell pollsters that, compared to 50 years “In recent years the the nation is heading in the ago, life for people like middle class has been wrong direction, in which them is either worse (46 %) squeezed by stagnant overwhelming majorities say or the same (14 %) and that they think existing political they expect life for the incomes, excessive and economic institutions are next generation to be worse debt, job losses and rigged against them, and in (51 %) or the same (18 %)4; a marked sense that which 85 to 90 % say they are frustrated or angry with the • 40 % of Americans told the their best years are federal government and the Federal Reserve in a 2015 behind them” political system. survey that they either could not cope with a $400 The United States has defined household emergency itself as a middle class country or would have to sell at least since the early 1950s. something or borrow However, in recent years the from family to do so5; middle class has been squeezed by stagnant incomes, excessive • By a variety of measures, debt, job losses and a marked almost 60 % of U.S. high sense that their best years are schoolers are neither job behind them: –nor college– ready when they graduate6. • Median real household income today is only The result is that the slightly higher than it percentage of Americans who was in 1996; define themselves to pollsters as “middle class” dropped from • Uniquely among 60 % in 2000 to 51 % in 2015 industrial countries, and seems to be still falling, the life expectancy of while many of those who still white Americans has think they are middle class declined during the last say they are badly squeezed.

3 “Rising morbidity and mortality among white non- Hispanic Americans in the 21st century,” Anne Case and Angus Deaton, September 2015, Proceedings of the National Academy 4 “American Rage: The Esquire/NBC News Survey,” Esquire Magazine, January 3, 2016 5 “Report on the Economic Well Being of US Households in 2014,” May 2015, Board of Governors of the Federal Reserve System 6 “The Condition of College and Career Readiness, 2015,” ACT 7 Quinnipiac University Poll, April 15, 2016

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As a consequence, two-thirds notwithstanding, that whites of Americans say they want were disproportionately hit by “radical change,” including the Great Recession, and blame majorities of both Republicans the (black) President. (71 %) and Democrats (58 %) 7. Regardless of the explanation, This political and economic recent polling shows that, “Recent polling insecurity needs one other while most Republicans are shows that, while element to complete the not racists, racists people are picture: identity insecurity. The more likely to cast their votes most Republicans are United States has always been on Trump9. not racists, racists a white majority country, fed are more likely to by great waves of European immigration. However, the 3. THE CANDIDATES be Republicans, as most recent immigration well as full-throated wave was from Mexico with Hillary Clinton has been Trump supporters” the result that non-Hispanic described as the most famous whites will soon be the largest woman whom no one really minority. Last year the U.S. knows, in spite of 25 years on Census Bureau reported that, the national and global stages. for the first time, a majority of During her stints as First Lady, American children under five Senator and Secretary of State are black, Asian or Hispanic8. she developed deep expertise in Thereby, the white middle a wide range of domestic and class American becomes a foreign policy issues. confused minority. Like the good lawyer she is, One last complicating, Clinton has a reputation for controversial dynamic. In the learning her brief almost better age of Obama, researchers and than her clients. But she also pollsters have documented has a long history of adopting a resurgence of racism. different personas. At various Some of this is old fashioned times she has been an idealist resentment of a black man (as in her heartfelt advocacy who “should not” be president for children’s rights), a (evident in the still lingering pragmatist (as in her aggressive conviction among some people work on behalf of her New York that Obama was not born constituents), a hawk (as an in America and that he is a advocate for airstrikes against Muslim); some of it is a more Qaddafi’s Libya and Assad’s modern version which insists, Syria) and a progressive (as evidence to the contrary when she abandoned years in

8 “Census: Minority babies are now majority in United States,” Washington Post, May 17, 2015 9 “The disturbing data on Republicans and racism: Trump backers are the most bigoted within the GOP,” Chauncey Devega, Salon, July 6, 2016

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favor of free trade agreements Trump is supremely self- “We see in in the face of Bernie Sanders’ confident; even voters who Donald Trump: the challenge). This shape shifting should otherwise be repulsed partly explains the lack by his misogyny and crude extroversion and social of trust that has become language (like evangelicals) are dominance, the volatile a key component of her drawn to his decisiveness. In temper, the shades of political baggage. a world of terrorist outrages, banning Muslims from narcissism, the populist Clinton’s decades on stage coming to the United States authoritarian appeal” have produced more than sounds reasonable to people their share of scandals, real who watch images of Muslim or invented by her enemies. suicide bombers on their Google “Hillary Clinton news feeds. scandals” and the entries seem endless: the suicide of Vince As a businessman he made Foster, Whitewater, the Clinton (and lost) fortunes developing Foundation, her private email building projects and server, Benghazi, huge speaking marketing a larger-than-life fees from Goldman Sachs, etc. persona, stamping his brand Whether that’s noblesse oblige, in huge letters on everything corruption, or the inevitable from apartment towers to barnacles accumulated in casinos to airliners to steaks. the hand-to-hand combat of Life, he proclaims, is about modern politics depends on successful deal making; even the eye (and the politics) of when he loses –like his multiple the beholder – but it helps bankruptcies– he is able to to explain why many voters imagine a parallel universe hate her. where the loss is somehow a win. Who is Donald Trump? A recent Atlantic psychological profile Unlike most modern American ended by comparing Trump presidential campaigns, to the 19th century populist ideology– in terms of president, Andrew Jackson: right vs. left, small vs. big “President Andrew Jackson government, unilateralism vs. displayed many of the same multilateralism– plays little psychological characteristics part in this presidential race. we see in Donald Trump: Clinton has positioned herself the extroversion and social as running for Obama’s third dominance, the volatile term, probably more out of temper, the shades of expediency than commitment, narcissism, the populist albeit with an inclination authoritarian appeal.10” towards a more traditional,

10 “The Mind of Donald Trump,” Dan McAdams, June 2016, The Atlantic

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muscular foreign policy. Trump off-the-cuff pronouncement or is best described as “post- social media posting. But those ideological:” he is the ultimate tweets drive news cycle after “Team Clinton is pragmatist, looking for the best news cycle and keep Trump business as usual, deal within his overarching at the center of the national done at a high level frame of “America First.” What political discussion. A lifelong that means in practice may be master of building his own of professionalism, as much a mystery to him as to brand, Trump is the campaign, benefitting from the everyone else. in ways never before seen in experiences of five modern American politics. The candidates’ political previous presidential strategies reflect their As a consequence, when campaigns” personalities. Calculating and judged by conventional risk averse, Clinton runs a political wisdom, Trump’s traditional campaign, heavy approach seems chaotic, on money, people, polls, ineffective, coarse and grossly endorsements, television unequal to the challenge of advertising, and carefully competing across 50 states. scripted events. She has built Trump would probably answer a huge, highly articulated that the measuring stick is organization and deployed it wrong: politics as usual is throughout the country; her exactly what many voters are policy research team alone rejecting, which is why he beat numbers in the hundreds. 16 establishment candidates Team Clinton is business as over the course of the usual, done at a high level of Republican primaries. professionalism, benefitting from the experiences of five previous presidential 4. THE CAMPAIGNS campaigns (Bill Clinton’s, Obama’s and Hillary’s 2008 However, Hillary Clinton primary loss). seems to have more pathways to victory on November 8 Trump, the spontaneous and than Donald Trump, both proudly irreverent amateur, in the popular vote and has evolved a campaign that in the Electoral College, lurches randomly from place and has led in the polls to place, issue to issue, insult except for a brief moment to insult. He relies heavily on after the July Republican his family for advice, and has convention. In part, this gradually added a small team reflects political demographics: of seasoned campaign experts 39 % of Americans and advisers who, more often identify as independents, than not, seem as surprised 32 % as Democrats and as everyone else at his latest 23 % as Republicans; among

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independents, 48 % lean possible, but a long shot. Democratic, while 39 % lean Republican.11 However, the issue is less who votes than where they vote, More importantly, Clinton’s since it’s the Electoral College campaign looks like it could that elects presidents. At least replicate Obama’s victory by two-thirds of states have voted winning the overwhelming for the same party in the past “However, the issue share of black, Hispanic and five presidential elections. is less who votes women voters –but only a Clinton can count on at least minority of white voters – 227 Electoral College votes than where they as well as swing states like from states that she practically vote, since it's the Virginia, Ohio, Colorado and cannot lose. In practice, that Electoral College that Pennsylvania. In 2012 that means the next president will appeal to diversity produced be chosen by the voters of – elects presidents” 332 Electoral College votes at most– nine battleground (each state casts votes in states: Nevada (6 Electoral proportion to its population College votes), Colorado (9), with 270 needed for election) Iowa (6), Ohio (18), Florida (29), and 51 % of the popular vote Pennsylvania (20), Virginia (when 55 % of registered voters (13), North Carolina (15), and actually cast ballots). New Hampshire (4).

Trump, the clear underdog, At the end of August, Clinton is doubling down on white, led the polling in all nine. non-college educated voters who, in past years appeared as Nixon’s “silent majority” 5. WHAT MATTERS? or “Reagan democrats,” while hoping that Clinton’s political Predicting the outcome of the liabilities will discourage most unusual presidential minority turnout and Sanders race in modern U.S. history is renegade Democrats. White, a fool’s errand. It may be more non-Hispanic voters comprised useful to identify a handful almost three-fourths of of factors that may shape the 2012 electorate; white, what voters finally do on non-college educated voters November 8. comprised almost 60 % of the electorate12. To win, Trump • Trump, who has never would need those voters to run for office, continually vote –and to vote Republican– makes outrageous at unprecedented rates. This is declarations that motivate

11 “A Deep Dive into Party Affiliation,” Pew Research Center, April 7, 2015 12 “Trump Isn’t Winning Enough White Voters,” Harry Enten, FiveThirtyEight, June 10, 2016 and “There Are More White Voters Than People Think,” Nate Cohn, New York Times, June 9, 2016

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his base (even though • Since the next president unbiased fact checkers could nominate as many claim that around 70 % of as three Supreme Court his “facts” are false). This justices (out of nine), many could help produce the voters might rally to one “In past elections, huge white turnout that is candidate or the other the presidential central to his strategy. based on their expectations debates have had about the ideological flavor • Clinton’s political baggage of their nominees. On huge impact; this time and her mainstream balance, this seems more they will offer voters identity could depress likely to benefit Trump a contrast between turnout among younger by producing votes from voters and others who Republicans whose fear of Clinton’s mastery supported Bernie Sanders’ Clinton’s activism is even of policy detail and call for radical change. greater than their dislike Trump’s unorthodox of Trump. • President Obama’s and aggressive vision aggressive advocacy for All of these factors will be on of America” Clinton (his approval display during three televised ratings have recovered debates on September 26, to 50 %), could mobilize October 9 and October 19. In key demographics for past elections, the presidential her, particularly blacks debates have had huge impact; and Hispanics. this time they will offer voters a contrast between Clinton’s • The more Trump is mastery of policy detail and denounced by the Trump’s unorthodox and establishment (including aggressive vision of America. Republicans), the more his base is likely to be motivated to vote on 5. THE MORNING AFTER election day. It’s relatively easy to imagine • More disclosures linking how a President Clinton would Trump’s economic fortunes govern: much like Obama in to Russian money –which policy terms, if further to the might be seen as explaining left on social and economic his supposed affinity issues and further to the right for President Putin– or on national security. further embarrassing leaks of hacked Clinton In terms of specifics, she or Democratic Party files has pledged to secure a path could be late-breaking to citizenship for illegal wild cards. immigrants, to raise the

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minimum wage to $15 an of “America First” implies a hour, to expand Obamacare, systematic retrenchment to improve Social Security from the post-war multilateral benefits, and to take steps to system, towards geopolitical slow climate change. She has and economic autarchy. He disavowed the Trans Pacific would also probably rely on the Partnership and other trade standard Republican bromides deals, although she would of lower tax rates, reduced almost certainly seek to regulation, and a pumped up “It’s relatively easy reinforce America’s traditional military, complemented by alliance system; her foreign a life-long developer’s belief to imagine how a policy would look more like in pouring concrete, i.e., in President Clinton Kissinger and Baker than Rice building infrastructure. would govern: much or Kerry. She would probably like Obama in policy have a better relationship than Obama with Congress, 6. THE MORNING AFTER terms, if further to although that might not matter THE MORNING AFTER the left on social and in terms of legislative output. economic issues and The punch line belongs to A President Trump, however, Abraham Lincoln, “Elections further to the right is a complete enigma; he has belong to the people. It’s their on national security” provided almost no clues as decision. If they decide to to how he would govern or turn their back on the fire what he actually wants to do and burn their behinds, then (besides, of course, making the they will just have to sit on country “great again”). In his their blisters.” Manichean world, he would probably use the considerable He should have added, powers of the presidency to do “Regardless, the Republic at least some of what he has will survive.” promised: redress imbalances where –in his view– U.S. interests are poorly served, e.g., NATO, NAFTA, U.S.-China, U.S.-Iran, etc. His version

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Author Alan Stoga is a strategist and entrepreneur with extensive experience in communications and public relations, corpora- te consulting, digital media, geopolitics, banking and gover- nment. Currently, he serves as Senior Adviser at Kissinger Associates; president of Zemi Communications, L.L.C.; chair- man and managing director of the Tällberg Foundation; and chairman of the Tinker Foundation. Mr. Stoga is currently Vice Chairman of the board of the Americas Society and a member of the Council on Foreign Relations. He has economics and international rela- tions degrees from Michigan State and Yale University, respectively, and is a frequent lecturer and writer on international, Latin American and U.S. politics and economics. [email protected]

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