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The Deepening Economic Crash and the 2016 Election

If this bizarre election year needed one thing twist, it is now likely to play out against a deepening
economic crisis. Advantage: Trump and Sanders.
The global economy is weakening, due to a perfect storm of a cratering economy in China, a crash of
oil prices, slower growth in the Third World and a realization by central banks that they can't fix
what's broken. There is a lot of whistling past the graveyard that the U.S. can somehow continue our
(rather tepid) recovery, but in a global economy, no country is an island.
Fears of a recession push the stock market downward; then the wipeout of stock values helps bring
that recession nearer. (Who said markets were rational?)
Consumers benefit for now from the cheaper gas prices at the pump. But with wage growth minimal,
and real careers giving way to a succession of on-demand "gig" jobs, that's small comfort.
As the election year wears on, you can expect Republicans to blame the economic slide on the
Obama Administration and the Democrats. You
can expect Hillary Clinton to intensify her attacks on Bernie Sanders as the candidate of tax
increases and big government. And you can expect the economic anxiety that drives the Trump and
Sanders campaigns only to grow.
On the GOP side, why are Republican elites so terrified of Trump? Let us count the ways.
First, he doesn't need their money. So all the billions that were set to buy the election are suddenly
like the worthless Marks of Weimar Germany. And if Trump doesn't need either their money or the
votes of their political toadies, then the GOP elites have no leverage on him and no IOU's to call in.
Second, it becomes clearer every day that Trump isn't a conservative. He's an anti-Wall Street, antiforeign populist. And anti-foreign doesn't necessarily mean more interventionist. At the most recent
Republican debate, he actually said that he would have voted to impeach George W. Bush over the
invasion of Iraq.
That comment set pundit tongues wagging: this time, Trump finally overreached. W is popular in
South Carolina, isn't he? Well, maybe among the swells, but not so much among the white working
class good old boys who are Trump's constituents. It is their sons, fathers, brothers (and some
daughters and wives) who got killed in W's pointless war in Iraq.
And all Jebby could do was pitifully blather about what great man his dad was, and how much he
admired his mother. Maybe she should have run, Trump shot back. This man is crazy like a fox.
Third, unlike GOP conservatives, Trump doesn't hate government. In a severe economic turndown,
you could imagine a President Trump sponsoring, say, a massive public works program to Make
American Great Again.
And fourth, the Trump phenomenon suggests that the supposedly ultra-conservative Republican
base isn't all that conservative either. Yes, the Evangelicals are religious conservatives, and the base
doesn't like foreigners, and a dwindling number hate gays, but that doesn't make them economic

Until Trump, there was an awkward alliance of convenience in the GOP between social conservatives
and Wall Street conservatives (who have little in common), in which each one did the other's
bidding. Trump unmasks and blows up that alliance.
That fracture, over the long run, is even more serious than the oft-stated risk of Trump somehow
destroying the Republican Party entirely. What he really does is to weaken the party as the
instrument of Wall Street conservatives.

And what Trump is doing to the GOP is mirrored on the Democratic side by Sanders' impact on the
Democrats. Hillary Clinton, at the most recent Democratic debate, double down on her attacks on
Sanders as a big-government Democrat.
Sorry, but a dose of higher taxes and more social investment is just what the economy and the
disaffected people who are flocking to Sanders need right now.
Take the case of tax-financed debt relief for college grads. That's not a case of building a big
government bureaucracy. On the contrary, money would flow in, via more tax dollars collected from
the rich, and it would flow out for debt-free higher education. Does Hillary really want bash Bernie
over that?
Or take Medicare for All. That's less bureaucracy, not more. Medicare is an exemplar of the
efficiency of government. It spends 98 cents of the premium dollar on medical care. Most private
insurers are down in the 80s. If you want to see bureaucracy in action, take a good look at private
medical and health insurance bureaucracies. (And you have, if you've been to the doctor or filed a
claim lately.)
Hillary's biggest blunder was to try to tag Bernie as a one-issue candidate. If that issue is the
economy, bring it on.
What Trump and Sanders are forcing is a debate about the declining prospects of most Americans.
For all of its power, Wall Street, in the driver's seat on both parties for at least three decades,
suddenly has the weaker horse in both parties. Amazing!

Of course, Hillary Clinton is still the more likely Democratic nominee. And in a head-to-head with
Trump, she is probably the favorite barring some new horrendous disclosure about Clinton
Foundation conflicts of interest or emails.
Clinton, presumably, is a good enough reader of public opinion and of sources of political energy,
that she would be a more progressive president that one might have expected. But Wall Street would
still have a good friend in the Oval Office -- too good a friend.
Coda: McConnell's Misstep
Here I have to violate the cardinal rule of journalism that a column is about one thing.
It seems to me that Republican Senate leader Mitch McConnell, echoed by the Republican
presidential field, blundered when he declared that the Republican Senate would not vote in an
election year to confirm an Obama nominee to fill the Supreme Court vacancy created by the death
of Justice Scalia.
The Republicans would be a lot shrewder if they bargained with Obama to nominate a center-right
nominee who could be confirmed. That would deprive Obama's successor, quite possibly a Democrat,
of the chance to name a real progressive and would extend the conservative sway over the court.
With a court divided 4-4 for the next year, liberals will likely prevail because of several lower court
decisions that will now be upheld, most notably the Freidrichs case allowing public sector unions to
broadly organize and collect dues. Other key cases, including affirmative action, voting rights, and
abortion rights, are in the same category.
If Republicans are sly, they will play to Obama's vanity and begin bargaining with the White House
about naming a moderate conservative who they will confirm.

I would not be surprised if such back-channel bargaining has already begun.
And if Obama is shrewd, he will appoint a distinguished liberal and let Republicans be the party of
negativity, and let the chips fall.
-Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University's Heller
School. His latest book is Debtors' Prison: The Politics of Austerity Versus Possibility.
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