Thought of the Week:
How many times has this happened to you? You’re in a car, and you’re giving the driver directions. You say, “Up ahead, at the next light, take a left.” Just as you do, the driver moves into the right lane, and puts on his right turn signal. Quickly, you correct him, and facetiously say, “No, no, no your other left.” Happens all the time, right (at least it does when my kids are driving)? There is a similar left/right* disconnect when applied to contemporary politics. In the U.S. one of the classic distinctions between left-wing (Democratic) and right-wing (Republican) ideologies centers around the rights of individuals vs. the power of the government. There is a general belief on the liberal left that society is best served with an expanded role for government, while people on the conservative right hold that the best outcomes for society are achieved by elevating individual rights and minimizing the role of government. With this in mind, one could assume a presidential administration that expanded government by creating the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA), while bolstering Social Security, championing a minimum wage, supporting affirmative action, and implementing wage and price controls would be liberal or Democratic. Likewise, one could imagine a conservative or Republican administration declaring that “the era of big government is over,” and then reforming welfare, negotiating major free trade agreements, deregulating the telecommunications and financial industries, privatizing government-sponsored entities, and reaching a budget surplus. But then, of course, you would be wrong; the former was the Republican Nixon administration, while the latter was the Democratic White House of President Clinton. In fact, U.S. political divisions do not fit neatly on a simple political continuum, and, if examined closely enough, every left vs. right model can start to look blurry. The truth may be that no model of the political spectrum will be satisfying because “left” and “right” are not actually ideologies but collections of unrelated political positions connected by nothing other than a group. A growing trend in American political science is to view the disparate opinions within political parties, not by ideology, but by social constructs. The argument is that a conservative or liberal is not someone who has a conservative or liberal philosophy, but someone who belongs to the prevailing conservative or liberal “tribe.” Although there are ideologues who remain attached to earlier tribal visions, in this world tribes’ outlooks evolve over time, and their positions on the issues, and the importance they place on these issues, gradually change. Here, it isn’t the ideology that defines the tribe, but the tribe that defines the ideology. If one can accept the notion that there is no perfect model that defines political opinion, just impermanent maps of constantly shifting territory, then snapshots in time of the varying voter groups that make up the left/right terrain can be useful in understanding politics and policy.
*Did you know that the left-right political framework dates back to the beginning of the French Revolution, when insurgents sat on the left end of the National Assembly and the royalists on the right.
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Eurasia Group Says G7 Alignment on China is More Important than Biden’s Suggestion of a Thaw in Relations. The G7 is more aligned today than at any point in decades, particularly on Ukraine and China. Although Ukrainian President Zelensky dominated headlines with a surprise appearance, the core focus of the recent meeting was a U.S.-led push for a common ground on China. President Biden’s comment that the U.S. and China could see a thaw in relations garnered significant attention and reflects a material push to re-establish high level bilateral engagement between Beijing and Washington, but the substance of the G7 meeting suggests that the U.S. remains focused on countering China. Both the official G7 communique and a standalone document aimed at—but not explicitly mentioning—China reinforce the focus on competition, as both signaled a willingness to engage with China but also reinforced the need for a strong, united front countering economic coercion from Beijing. This aligns with a base case scenario of a managed decline through the remainder of the year (55% odds). As for Biden’s comment, it suggests that while Washington and Beijing are working to put things back on the track they were prior to February’s spy balloon incident, the overall trend in the relationship is toward greater competition, confrontation, and a continued push to de-risk (not decouple) supply chains from China.
Eurasia Group Thinks Sen. Scott’s (R-SC) Candidacy has Limited Viability Unless Trump and DeSantis’s Bids Collapse. This week, Senator Tim Scott (R-SC) announced his bid for the White House in South Carolina. While Scott is a strong fundraiser and has received the endorsement of the number two Republican leader in the Senate, John Thune (R-SD), his candidacy has limited viability unless bids by former president Trump and Florida Governor DeSantis—who also entered the race this week—both collapse. Scott’s major assets are his optimistic outlook, his compelling life story, and his status as the only Black Republican in the Senate. However, his relatively traditional, Reaganite stances offer little to the Trump base, limiting his appeal among the Republican primary electorate. Scott’s profile makes him a leading contender for the vice presidential slot regardless of the eventual nominee; like fellow South Carolinian Nikki Haley, who served as UN ambassador for two years during the Trump administration, he is likely to steer his campaign with that goal in mind. Former President Trump remains the most likely Republican nominee (a 55% probability).
Politico Reports that States are Weighing New Chinese Investments Carefully, but Few are Shutting Doors. For an U.S. governor in the early 21st century, an economic pilgrimage to Beijing was a no-brainer: no fewer than three dozen state executives traveled to China to seek trade and investment between 2005 and 2020. But since the Covid-19 pandemic, not a single governor has visited China. These days, they’re more likely to show up in Taiwan—chief executives of Arizona, Indiana, Arkansas and Virginia have all stopped on the self-governing island since 2022—further irritating the U.S.-China relationship. Virginia Gov. Youngkin, a leading Republican, even signed an executive order establishing a trade office in Taiwan on his recent visit. The new approach from state leaders is a reflection of just how low U.S.-China diplomatic relations have sunk over the last few years, and how politically toxic engagement with Beijing has become. But that doesn’t mean states don’t want or need Chinese trade and investment, and many remain willing to engage directly with companies that have cash to spend. China is a major export market for U.S. agricultural products from across the country, as well as manufactured goods such as autos and aircraft. It also represents a small but growing share of overall foreign direct investment in the United States, with a particularly significant footprint in California, New York, Illinois, and Texas. The current stock of Chinese direct investment in the U.S. is more than $54 billion by government estimates, and closer to $200 billion according to private sector analysts. Either figure is a tiny portion of the nearly $5 trillion foreign companies have invested in the United States. At present, most states do not prohibit Chinese investment, but leave such decisions to the Committee on Foreign Investment in the United States (CFIUS), an interagency federal government panel led by the Treasury Department that reviews foreign investments for potential national security concerns.
“Off the Record”
Same talks, different furniture. Debt-ceiling negotiators changed up their normal meeting place, a shift in strategy as Washington inches closer to the debt-ceiling deadline, which could hit in less than a week. While lawmakers since the start of talks had welcomed White House staffers to private spaces at the Capitol building, this time, Republicans trekked to the Eisenhower Executive Office Building for a longer meeting than usual. It may suggest a power move by the Biden administration as some thought staging discussions in the Capitol gave the GOP an upper hand. Now, the shoe’s on the other foot. Centering talks at the EEOB, which happens to be across the street from the West Wing, could empower negotiators with added buy-in and input due to its easy access to President Biden and senior White House aides. The change in venue also shifts talks away from the Capitol Hill press corps. Holding talks on the Hill forced negotiators to march past a crowd of reporters eager for any bit of new information. The EEOB is a no man’s land for the White House press corps, and negotiators may be freed up when not hounded by reporters. Often, the real conversations in Washington come when the public talk stops, and negotiators on both sides insist they’re making progress. House lawmakers have left for the Memorial Day recess but were told they should be ready to return within 24 hours to vote on a possible accord.
In Other Words
“He’s reconsidering. He’d be in his own lane. He’s not never-Trump, and he’s not Trump-light,” an anonymous source close to Virginia Governor Youngkin (R) who is reconsidering a 2024 presidential bid despite having rejected the idea just a few months ago.
“Wow! The DeSanctus TWITTER launch is a DISASTER! His whole campaign will be a disaster. WATCH!”—former President Trump on Florida Gov. DeSantis’ campaign launch.
Did You Know
The 118th Congress is the most racially and ethnically diverse in history. There are more Black, Hispanic, and Asian American members than ever before, and a full quarter of Congress identifies in a minority group or as multiracial. Women also comprise a record 29% of members.
Graph of the Week
According to national polling averages, former President Trump’s lead over Florida Gov. DeSantis more than doubled, from 16 points in March to 33 points today. Unfortunately for DeSantis, Tallahassee policy victories don’t define the Republican presidential primary narrative, which is more nationalized than ever. The major stories that broke during this period were all a net negative for the governor: (1) Ukraine; (2) Disney; and (3) Abortion. At the same time, Trump world spent $13 million on ads attacking DeSantis over entitlements, taxes, and other issues, with no similar effort from DeSantis to hype his record on vouchers and tort reform. DeSantis’ decline has encouraged GOP fence-sitters to jump into the race, creating a large field to the delight of Team Trump, which knows that a lack of a one-on-one contest eases the path to victory. It’s not too late for DeSantis to turn it around, and his announcement should free him to make the case that he is the GOP’s best chance at returning to the White House.