12 February 2019 12:17:07 IST

A management and technology professional with 17 years of experience at Big-4 business consulting firms, and seven years of experience in high-technology manufacturing, Rajkamal Rao is a results-driven strategy expert. A US citizen with OCI (Overseas Citizen of India) privileges that allow him to live and work in India, he divides his time between the two countries. Rao heads Rao Advisors, a firm that counsels students aspiring to study in the United States on ways to maximise their return on investment. He lives with his wife and son in Texas. Rao has been a columnist for from the year the website was launched, in 2015, and writes regularly for BusinessLine as well. Twitter: @rajkamalrao

Trump’s chances of re-election look strong

If he has to lose, then the Democrats have to put up someone who is equally transformative

There’s a fundamental rule in politics. You can depose an incumbent leader, but you need someone to replace them with.

India’s opposition parties badly want to defeat Prime Minister Narendra Modi. But they don’t yet have anyone who measures up to the task. This is the exact situation in the US , where, after one of the best State of the Union (SOTU) speeches by a president in recent times, Donald Trump appears to be heading towards a re-election in 2020.

The election is still 22 months away; however, in politics, that constitutes a lifetime. Predictions this far ahead are akin to guesses about whether it will rain or not in Delhi this Independence Day. Many things could go wrong for Trump in the coming months.

Investigations and implications

He turns 74 on the election day and while his health is said to be excellent, one can never tell if he will have the energy to go four more years. The investigation into Russia’s interference in the 2016 US elections by Special Counsel Robert Mueller will likely wrap up in a few months and no one knows if he will be implicated in a collusion-like scandal. The US Attorney’s office in the Southern District of New York is pursuing its own investigation into Trump’s alleged payoffs to silence women about affairs and whether these constitute election law improprieties. Likewise, the House of Representatives is now under the absolute control of the Democrats, who have announced that they will continue investigating everything about Trump.

But voters need a choice at the ballot box, and so far, the Democrats have failed to identify an Obama-esque candidate. Worse, the party is nothing more than a loose federation of extremely diverse views where the only common thread is a hatred for Trump.

Identity politics

The second rule in politics is crystal clear: you can’t win simply by being against something. This means you’ve got to stand for something. The Democrats appear to be everything to everyone. There are extreme left-wing socialists in the party. Unlike in the past, these people are not accused of being socialists, instead they proudly identify themselves as such. Bernie Sanders, Pramila Jayapal and the new 28-year-old star Alexandria Ocasio-Cortez (AOC) have openly advocated spending plans in the tens of trillions of dollars. They want free healthcare, free education and a guaranteed job for everyone. Think Venezuela.

Trump cleverly said during his SOTU speech, “Here, in the United States, we are alarmed by new calls to adopt socialism in our country. America was founded on liberty and independence — not government coercion, domination, and control. We are born free, and we will stay free.” This will be his election-year theme to go after the Democrats and it will be a powerful message.

Then there are people like Julian Castro (a Hispanic man), Kamala Harris (an African-American woman), Kirsten Gillibrand (a white woman who staunchly supports women’s rights), Elizabeth Warren (white woman who once claimed she was of Cherokee descent and has since recanted) and Cory Booker (an African-American man) who are all largely running on the politics of their identities. Stacey Abrams, the African-American woman who was chosen by the Democrats to respond to Trump’s SOTU speech, dwelled on this theme for some time. In a Foreign Affairs article, she argues that identity politics actually strengthens democracy. Voters respect identity but few are likely to vote based on that alone. Other issues matter more than factors that no one has control over, such as gender and race.

A bull run for the US

Trump has a powerful record going for him. Presidents rarely fail to get re-elected if the economy is strong in May of the election year. And on this count, the US economy is nothing short of a miracle. The four cylinders of the mighty US engine — fiscal policy, monetary policy, regulation and trade — have been firing away with such gusto that unless there is a calamitous event, the American economy will be fine by May 2020.

It helps to look at the strength of the US economy through a contextual lens. In 2017, the US GDP was at $19.4 trillion. Assuming it will grow at an average rate of just 3 per cent for all of 2018, the US GDP will have increased by $582 billion in 2018 alone. The change in GDP this year —yes, just the change — is larger than the entire economies of 190 countries, including Sweden, Belgium, Austria, Norway, the United Arab Emirates and Israel.

Unemployment rates have dropped to 3.7 per cent, the lowest in 50 years. Q2 GDP growth came in at 4.2 per cent and Q3 was at 3.4 per cent. The stock market is a near-record high. Corporate profits have rarely been better. The US is about to become the world’s largest energy exporter. And inflation is perfectly in line with expectations.

Under Trump, the US is still fighting wars but the scale is much smaller than the $1 trillion a year it was spending in the early 2000s. North Korea has not fired a missile in nearly two years. Deficit spending continues but nearly all of this year’s deficit was because of massive tax cuts for businesses, which Trump signed into law. This has put more money into the pockets of companies, resulting in investment in plants, equipment and factories.

Lack of an opposition leader

Trump has also severely cut regulations on companies. This has freed businesses from having to constantly comply with onerous government rules and allowed them to divert funds to hire and invest. And Trump’s trade wars have been explosive. While the US is hurt, China is hurting more and has shown a willingness to deal. The dollar remains strong and the Fed is ready to step in to lower interest rates if the economy should turn around.

No one likes Trump’s tweets or his childish attributes but he has helped transform the US and the global order, which cannot be disputed. If Trump has to lose, then the Democrats have to put up someone who has the promise to be equally transformative. Until that happens, Trump’s chances of getting re-elected are strong.