The ‘woke’ economy and big-spending U.S. policies are empowering populists

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Progressives around the world are worried. Right-wing populists have won national elections in the Netherlands and Italy and enjoy rising strength in Germany. In the United States, despite indictments on 91 counts in three states and Washington, D.C., former President Donald Trump leads President Joe Biden in the 2024 election polls.

Neither Florida Governor Ron DeSantis nor former South Carolina Governor Nikki Haley have been able to dethrone Trump. Despite a massive commitment of time and money, DeSantis ran second in Iowa. Haley emerged as the lone challenger in New Hampshire, where she lost by 11 percentage points.

More broadly, American voters are responding to troubles in U.S. cities and to a foreign policy that often makes little sense. For example, San Francisco and other West Coast cities face problems with rampant homelessness and shoplifting. Californians are fleeing for Texas, and 41 states are receiving more migrants from the Golden State than they are sending. New Yorkers have long moved to Florida to retire but these days all generations are picking up stakes to settle in the politically conservative Sunshine State.

Although many factors like work-from-home and fewer commuters importantly affect foot traffic, rising crime is often cited when retailers including Nordstroms, Walmart, Whole Foods and CVS close stores.

Washington, D.C. and other East Coast cities suffer similar problems. New York is not safe for commuters, but Mayor Eric Adams is boxed in by the legacy of expensive public services — for example, New York schools spend about 60% more per pupil than Atlanta’s schools, and the city must absorb the flood of immigrants and the necessity to shelter them. The resulting costs strain the city’s new budget, and now the police force will be reduced to its lowest level in 30 years, trash pickup will be cut, and other public services curtailed. Some savings in administrative personnel are possible, but fewer cops on the street seems inevitable.

Federal immigration policy swells the ranks of homeless migrants in major cities. Specifically, anyone with a plausible claim for asylum must be admitted by immigration authorities, and the federal government takes up to 12 months to issue those folks work permits. The latter leaves most without the means to support themselves, immediately homeless and a burden on municipal finances. 

Biden’s foreign policy is in disarray, because he hasn’t revised fundamental contradictions between ends and restraints on means, policies he inherited from Mr. Trump and President Barack Obama.

Consider Gaza. Jews comprise less than half of the population west of the Jordan River — no solution legitimate to the international community is possible without two sovereign states Israel and Palestine.

Israeli Prime Minister Benjamin Netanyahu won’t embrace that solution, owing to pressures from ultra-conservatives critical to his parliamentary majority. But Biden has leverage that he fails to apply — chiefly that the United States will likely pay for one-third of the Israeli Defense Force costs in Gaza, and Israel obtains weapons mostly from U.S. manufacturers.

U.S. appeasement of Iran hasn’t worked, and meanwhile Iran funds terrorists that attack Israel. No matter how many terrorists the IDF roots out in Gaza and the West Bank, Tehran will be able to find new ideologues in a Palestinian State and elsewhere to attack both Israel and Middle East shipping.

There can’t be peace in the region without a two-state solution, and we can’t have a two-state solution without dealing with Iran. But that would require the Biden Administration to apply military force beyond proportionate retaliation against terrorist groups, and neutralize Iran.

No wonder Biden trails Trump in many polls. More voters disapprove than approve of Biden’s crime, immigration and foreign policies by at least 20 points. Crucially, the president currently risks losing the swing states of NevadaArizonaGeorgia and Michigan, but is holding on in Pennsylvania and Wisconsin.

The progressive intelligentsia in the U.S. is convinced a new era of economics has taken hold.

When it comes to finance, the progressive intelligentsia in the U.S. is convinced a new era of economics has taken hold. Fiscal restraint, monetary discipline and free markets are out. Big spending, printing money, protectionism and industrial policies are in.

Many of these ideas have been embraced by the Biden administration, and more voters disapprove of his economic policies than approve by 22%. On handling inflation the spread is 32%.

The 2024 election will be a referendum on the Biden presidency, and many disgruntled voters are turning to Trump. That’s disappointing because economic policy in America is truly a mixture of the left — Biden’s industrial policies and wokeness in execution — and the right, the reliance on the capital markets to spur innovation in technology and support for the Federal Reserve’s orthodoxy on inflation.

Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.

More: Wall Street is already weighing potential market impact of a Trump presidency

Also read: Recession was inevitable, economists said. Here’s why they were wrong.



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