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Trump's NYC hush-money trial: What to watch for
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, DC, shares his perspective on US politics.
This is what we are watching in US Politics this week: Trump's trials.
Former President Trump faces or faced six civil or criminal actions against him in 2024, an election year. Two of which, civil finds that he was already found liable for. He's had to pay significant sums of money. Two of which, a case in Georgia and one in Florida, are very unlikely to start in this year, and one of which could start later this summer, this federal trial against Trump for election interference in Washington, DC. The final trial is set to begin next week. A trial in Manhattan for business records frauds related to hush money payments he made to a woman he was having an affair with before the 2016 election.
The key witness in this trial is Michael Cohen, Trump's former attorney, who Trump's going to try to discredit the testimony of by saying, “He's a liar, he's out for publicity. But the evidence against Trump is pretty damning here. There's almost no, it sure looks like he committed this crime. However, the allegations will have to be proven in court. Trump could win this case and the jury could decide to throw out the corroborating evidence. There's a lot of ways this could still go in Trump's favor. And if it does, that will be a significant win for Trump, because a significant portion of the electorate is telling pollsters today that if Trump is found guilty of a crime before the election, they would be less likely to vote for him.
Trump support drops by about ten percentage points in a New York Times poll from earlier in the year, based on whether or not he's found guilty. And these are really high stakes, drama for Trump. One of the key political inoculates Trump has is that the trial could be over quickly. He also is going to make the case that this is a politically motivated witch hunt and that Alvin Bragg, the Manhattan DA, is out to get him and stop him and undermine him because he's a Democrat. That message is certainly resonating with Republicans. The key question for Trump's election campaign is, “Does that message resonate with independents, or do they continue to see the criminal charges against Trump as being disqualifying?”
The trial starts next week. We'll find out what happens.
Secret sauce of the boom: immigration
The riddle of recovery: Is the economy broken, or is it booming? And is there a secret accelerant no elected official wants to talk about?
Turns out, how folks perceive the economy is often tied more closely to how they vote than to reality. Donald Trump's supporters argue the economy is a disaster of debt and inflation, made worse by an immigration nightmare playing out at the borders. To prove their case, they wander into the Cherry Orchard of Convenient Stats and pick a few choice numbers to make their case.
- US debt has passed $34 trillion and will exceed the dangerous 99% debt-to-GDP ratio.
- Between 60%-78% of US households are living paycheck to paycheck, depending on the survey.
- Credit card debt has hit record levels, with 50% of consumers unable to pay off their monthly bills.
- Food prices are going up even as inflation is down, rising over 2.2% from last year, according to the Consumer Price Index.
- Big layoffs are hitting the tech, financial, retail, media, and energy sectors.
- Home affordability: Most people with an average income can no longer afford a home, which in most cities now requires an income of over $100,000.
The harvest from that side looks rotten. But walk over to the Joe Biden side of the Cherry Orchard of Convenient Stats, and things look pretty darn good:
- Post-pandemic, the US has been the fastest-growing economy in the G7.
- Job growth is shattering expectations with over 353,000 jobs in January, and unemployment is under 4%.
- Inflation has fallen to 3.2% from over 9% two years ago.
- Real wage growth is way up.
- The stock market is on a bull run.
Overall, it’s a pretty tasty harvest, if that’s all you pick.
Still, Gallup’s famed Economic Confidence Index – though ticking up a bit last month – is shockingly negative, revealing most Americans think things are bad. So consumers are doing boom-like things, like spending, while perceiving bust-like things – and complaining.
Plenty has been written about the lens of partisanship distorting economic reality: People believe the economy is bad, just not for THEM! “It’s now a well-established fact that partisan orientation affects expressed views about the economy,” economist Paul Krugman wrote in the New York Times. “Democrats are more positive when a Democrat holds the White House; Republicans are more positive when the president is a Republican … but the partisan effect on sentiment is two and a half times as large for Republicans as it is for Democrats.” Krugman argues that this so-called “asymmetric amplification” accounts for 30% of the “gap between economic sentiment and economic fundamentals.”
There is, however, a reality that should not be wiped aside: The post-pandemic recovery for some has not been post-pandemic recovery for all. “I think the old name for this was ‘K-shaped recovery,’ the idea that different parts of the country are experiencing vastly different conditions,” Robert Kahn, the global head of macrogeoeconomics at Eurasia Group, told me. “Rising numbers living paycheck to paycheck or getting squeezed by high debt. Conversely, many still cash flush from pandemic support/policies.”
The K-shaped recovery also means that while, say, the stock market is booming, there are painful layoffs in sectors across the economy, like tech, finance, media, and retail. When Nike is slashing $2 billion dollars, people start to notice.
Sure, some of this is a correction from over-hiring in recent years, and some might be the impact of AI, but combine that with debt levels, worries about commercial real estate, and layoffs, and you see this could be a ... Special-K kind of recovery. There is a lot of optimistic froth covering some big pain points.
But there is a deeply inconvenient political truth here: Things would be much worse for everyone without the single most controversial, politically radioactive issue: immigration.
Trump is making his entire campaign about immigration, and his fiery rhetoric about it – he recently called illegal immigrants “animals” – is now a staple. So he is not about to discuss the benefits of immigration.
Even in Canada, Prime Minister Justin Trudeau, who has presided over massive increases in immigration levels, is now saying temporary immigration – foreign workers and international students – needs to be brought “under control.” This week he admitted it has “grown at a rate far beyond what Canada has been able to absorb.” Okay…
The thing is, immigration likely saved the economy and continues to do so. “The US let in about 3 million additional people last year,” my colleague Jon Lieber, head of research at EG, told me. “That puts downward pressure on wages and is a source of new consumer spending. There are some economists who attribute the continuing strength of the American economy to this factor.”
To dig deeper – and what GZERO reader doesn’t like to dig deeper? – it’s worth checking out the analysis done by Ernie Tedeschi, the former chief economist for the White House Council of Economic Advisers. “Immigration since the pandemic has strongly bolstered US labor supply and employment,” Tedeschi wrote. “The US economy is 8.2% larger in inflation-adjusted terms than just before the pandemic. Of this, 1.6 percentage points – about a fifth of US post-2019 growth – can be accounted for directly by foreign-born workers.”
Well, that isn’t something you hear about very much on the campaign trail. Immigration is the super-charge factor of the economy? “Politically, this is pretty ironic,” says Lieber, “if the immigration crisis that is weighing on Biden’s approval rating is actually saving the US economy.”
Is it naïve to think that citizens could one day turn to their politicians to get the facts straight about the economy – or admit that some of the very things they are demonizing and running against are the things that are boosting the economy and saving their political hides?
That’s likely the biggest riddle of this recovery story.
– Evan Solomon, Publisher
In divided America, anything goes in the name of “protecting democracy"
Ian Bremmer's Quick Take: A Quick Take to kick off your Monday morning. Let's talk for a moment about the state of US politics, US democracy. It's the one thing that almost all Americans today can agree on, and that is that their political opponents at home are fundamentally opposed to democracy.
Now, that is actually something I think that unites Americans in kind of a weird way. If you are a Biden supporter, you believe that Trump and MAGA supporters are fundamentally opposed to democracy. If you are a MAGA supporter, you believe that Biden and the establishment Democrats are fundamentally opposed to American democracy. It is incredibly dysfunctional. It is no way to operate a government.
It is no way to build a nation. And that means, you know, when you believe that your political opponents are opposed to democracy, you take away their value as people, you think that their political views are wrong and they need to be erased. They don't need to be engaged with sensibly. You also believe that anything that you might do to ensure that your opponents don't take power is justified because you're fighting over something very essential. And so it's kind of Machiavellian. It's the ends justify the means. Any means are justified if your opponents are fundamentally opposed to your system. And I mean, I certainly have political views of who I think is and is not appropriate. And I've said that historically, and I will continue to with this election. But this piece is not about this.
This piece is about the need not to jump into “the ends justify the means” in American politics, not believing that every slight or perceived slight is an 11 on a ten point scale. I think that Trump has committed real crimes, in my view. I look at his unwillingness, for example, to respond to the FBI and efforts to obscure, actively obscure where his classified documents were and weren’t and get his people to move them and lie about it. It's never the crime itself. It's the cover up of the crime that really gets you in trouble. That does, I think, make a real difference in the way that the classified documents case plays out for Trump as it did for Biden, who should not have had documents in many places but was completely forthcoming in responding to government requests.
I also think that for Trump, the Georgia case, in attempting to overturn to find votes in an election, a state election that was administered by, run by members of his own Republican Party, that's a serious issue. I think it would be impeachable. But impeachment no longer functions as a check on the executive in the United States. That part of the US political system is broken, has become politicized. It should be tried in a court of law, is being tried in a court of law. But there will be no conviction, in my view, certainly not before the election is over. And it's been mishandled by the prosecutor for her own ethical lapses. Now, that case does not make me feel that all cases against Trump are legitimate or should be pursued.
Some of them, in my view, are ridiculous. The fact that a bond was set for almost half a billion dollars and then a New York court said, no, actually 175 million implies that the original setting of that bond was politicized against Trump. A felony charge in New York would have been misdemeanor for any other citizen, politicized by a district attorney that was looking to make a name for himself politically in a state that is overwhelmingly anti-Trump. Take Trump off the ballot in Colorado or other states too. Ridiculous. Not in accordance with rule of law. And thankfully, a divided Supreme Court ruled 9-0 that that should not proceed. Nonetheless, there were lots of intelligent people in several states, in the United States in positions of authority that believed that they should take Trump off the ballot.
Because if someone is trying to destroy democracy, anything you do against that person is acceptable. We see these kinds of things being promoted in the political hit jobs that are being done across the board by cable news and in social media. The headlines you would think you were in two different countries. The people you follow, you'd think that they reflect two different worlds, never mind world views.
This happened yet again. This Easter weekend. Here I was minding my own business, candlepin bowling with the family on Easter Sunday, and turns out that it is proclaimed by Biden that Easter is the Transgender Day of Visibility. Easter Sunday. Can you believe that? What he or she is risen? Is that what we've come to as America? I mean, you can just imagine that the anti-Biden folks were apoplectic that he could do that. And of course, it turns out a little bit of research. That's not what happened at all. Actually turns out that the Transgender Day of Visibility is not new. It's been going on for over a decade. It's always on March 31st, which is only Easter Sunday. Every seven years, give or take a leap year. And there are literally hundreds and hundreds of days all throughout the year that get proclaimed as various days. And nobody really cares or pays attention except that we're in stupid season right now in a country where the most important thing politically is that you are able to score a point and take a piece off of your political opponent.
And the more we do that, the less we can talk to our fellow citizens. And it's not the country that any of us actually want to live in. It is being driven by political entrepreneurs that use that violent political sensibility to stay in power, to achieve power, to make money. It's being driven by media organizations that are having a hard time raising money to continue to feed their shareholders.
And so as a consequence, they are much more willing to drive anything, any headline for clicks. And of course, it's being driven by algorithms and social media that only give you the things that you agree with or that are going to make you very angry and to drive more and more engagement. And every one is very easily shaped by that.
Even if you spend only a little bit of time on politics. But that time is always being pushed in favor of you and your political tribe and opposed to the tribe that you want to defeat, then there is no common ground. There's no sensibility. Anything they say is wrong and should be used against them. Anything you and your team say is correct. And if you believe that and if you're following people who only engage in support in one side of the partisan divide, then you are part of a propaganda bubble. You are being misled politically, you're being spun up, you're being taken advantage of, you're being used. And increasingly that is the dominant theme in this very long, very expensive US election.
And I am going to continue to do everything I can to refuse to play ball in that easier, since I'm not a member of a political party and I've never been in a political position. Harder in the sense that everyone's going to whack you one time or another if you irritate their sensibilities. But at the end of the day, I'd be unhappy with myself if I did anything else, and that kind of matters, right? So anyway, that's my view for this election. I'm sure I'll come back to this theme again and again. But it seems to have been a lot in the headlines of late, so I thought I would make mention of it.
- US democracy after US midterms: polarized voters & Trump's GOP ›
- Podcast: Not infallible: Russia, China, and US democracy with Tom Nichols & Anne-Marie Slaughter ›
- America vs itself: Political scientist Francis Fukuyama on the state of democracy ›
- Francis Fukuyama: Americans should be very worried about failing democracy ›
- Divided we fall: Democracy at risk in the US ›
How Trump's money problems could affect the 2024 election
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, DC, shares his perspective on US politics.
This is what we are watching in US Politics this week: It is Trump's money.
At the same time this week, his meme stock is going bananas with an IPO of Truth Social. The markets don't know what to do it. With valuation fluctuating wildly throughout its first two trading days. But no matter what, it seems likely to increase Trump's net worth by several billion dollars. Unfortunately, a lot of that money will be locked up in equities in uncertain valuation for some time, which will make it hard for Trump to use the money to shore up his struggling campaign funds.Trump has roughly a third of the cash on hand as President Biden, who's going to pad that total with a cool $25 million from a fundraiser in New York this week. Trump is, of course, the king of earned media and may not need a huge war chest to run his campaign. But if there's one thing we know about American politics is that money does not hurt.
One of the reasons Trump may be struggling to raise funds is because of the massive legal bills that he has to cover, which, according to The New York Times, have amounted to over $100 million since he left office. Some of that has been covered with campaign cash. Some of it has been covered with money from his businesses, which is going to get a lot harder for him going forward based on this decision in New York.
So money could end up being a huge story of the 2024 election. And if it is, it's because Biden has it and Trump doesn’t.
Biden vs. Trump redux is official
They did it again. President Joe Biden and former President Donald Trump have mustered enough delegates in the primaries to secure their respective party nominations heading into this November’s presidential election — not that anyone expected otherwise.
For Biden, it was his win in Georgia last night that clinched it for the Democrats, while for Trump it was the GOP tally in Washington state. The rematch of 2020 comes despite both men’s unpopularity: Recent polling has Biden’s disapproval rating at 56.5%, while Trump’s unfavorable rating is nearly as high at 52.5%.
What’s next: The matchup that has looked inevitable for months is officially underway, but it’s unclear when, or whether, Biden will face off with his predecessor in debates. Trump has said, “I’m ready to go, ANY TIME, ANY PLACE!” Biden has appeared open to the idea, noting that it “depends on his behavior.”
In the meantime, expect plenty of campaign events and advertisements focused on both men’s ages, abortion, the economy, illegal immigration, and entitlements (more on that below).
Biden's vigorous SOTU speech aims to prove doubters wrong
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, DC, shares his perspective on US politics.
What's going on with the Biden State of the Union?
So big week in US presidential politics. Super Tuesday basically effectively ended both primaries for the Republicans and the Democrats. We now have two all but official candidates. Joe Biden gave his fourth State of the Union address this week. Big question around Joe Biden, is he up to the task? 75% of Americans say that he is too old to run for a second term, but he is a attempting to prove them wrong like he did last night in Washington with a vigorous speech where he spoke for an hour, which officially kicked off his campaign.
Biden spoke about themes of income inequality, he spoke in favor of aid to Ukraine, and he rolled out a couple of tax increases that Republicans don't like. There's a lot of risk in every public appearance that Biden gives these days because of the fact that Democrats are very concerned that he's going to make a verbal flub or that he's going to look physically frail. That did not happen last night, and I think that's a good sign for Biden for now.
But every time he goes on stage for the rest of the year, there's going to be concern about how old he looks. So the campaign can now begin in earnest. Biden didn't mention Donald Trump by name in the speech, but he did indirectly attack him, talking about how Republicans are the party of the rich and how the threats to democracy represented by this election. At least that's how Joe Biden wants to frame it.
Haley games the GOP’s future
After conceding Trump’s win and leaving the race, she chose not to endorse him. Instead, she announced, it’s the presumptive GOP nominee who has work to do. “It is now up to Donald Trump to earn the votes of those in our party and beyond it who did not support him, and I hope he does that," she said. “This is now his time for choosing.” So far, Trump has responded only by mocking the failures of her campaign.
In the fall, when party unity will be crucial for Trump’s success, how will Haley calculate her odds for future success? Will she fall in line to endorse him, as nearly all Trump’s rivals and GOP sometime-critics, including outgoing GOP Senate leader Mitch McConnell, have done? Or will she position herself as the one still-politically viable Republican who called him to account for his personal and political failings?
We, and Trump, will be watching.
Why Mitch McConnell is stepping down
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, DC, shares his perspective on US politics.
What are the implications of the retirement of Senate Republican leader Mitch McConnell from his leadership post?
This week Senate Minority leader Mitch McConnell announced his intention to step down as leader of the Republicans after serving longer in that post than anybody else in American history. There are really two implications that I can see.
The first is that McConnell was basically acknowledging the inevitable. It was very unlikely that he would be able to stay on as leader after this Congress anyway. If Donald Trump wins the presidential election, then he almost certainly is going to push McConnell out of the job. And if he didn't win the election, there's a whole generation of Republicans in the Senate who are looking for an opportunity to step up. McConnell, at 82 years old, did not represent that new generation. So the time had come to pass on the torch, and McConnell chose this February to announce it.
The second takeaway is that McConnell is really giving the speech the Democrats are hoping Joe Biden would give. McConnell's only eight months older than President Joe Biden, who's running for a second term right now. And lots of questions have come up recently about Biden's fitness for office because of his advanced age. This is going to be an increasing problem for Biden as more and more Democrats start talking about it. But in the absence of any challenger, it looks like Biden's going to be the nominee and his age will just be a liability they all have to learn to live with.