Flush with funds and with almost the entire media serving as a PR vehicle for Hillary Clinton, while demonising Republican contender Donald Trump, conventional wisdom goes that the 8 November electoral battle has already been decided. Hillary will, according to the pundits, win, and the only question is how big the victory margin of the Democratic Party candidate will be. Such confidence is based on the former Secretary of State being the favoured candidate of Wall Street, which sees Donald Trump as unsympathetic to its demand for primacy in economic policy. The Clintons have been close to Wall Street for nearly three decades. Small wonder therefore that the 1933 Glass-Steagall Act (which had placed severe curbs on the financial industry) was repealed by President Bill Clinton in 1999. Since then, Wall Street has had the upper hand over Main Street in the world’s biggest economy. Steadily, the financial services industry has dominated traditional manufacturing, a consequence of which has been the closure of hundreds of thousands of enterprises that failed to meet the financial tests of Wall Street, the sole purpose of which was to ensure a copious flow of dividend and other income to mega investors as well as top executives of major companies. Simultaneously, the volume of the financial industry grew, reaching the astonishing sum of $120 trillion in value, an absurdity in an economy that is more than ten times smaller in size than such inflated estimates.
The valuations may have been imaginary, but the profits made by the financial sector were not, and these have dwarfed those earned by manufacturing enterprises. Many of the latter were taken over by funds and stripped of their assets, so as to generate huge profits on the sale. Long-term value and considerations such as equity and jobs were thrown aside in the quest for immediate returns on investment. As income distribution is much more skewed in the financial services industry than in manufacturing, with most in the former earning low levels of compensation, but a handful being billionaires, the middle class in the US has become poorer on an average since the 1990s, while income inequality has reached levels not seen since the 1920s. Seeing this, President Franklin Delano Roosevelt implemented his New Deal for the overall population of the US in the 1930s. Although financial sleight of hand ensures that the figures for total US output remain high, in reality the country is visibly declining in core areas such as infrastructure. The “Profit Now and Anyhow” culture of Wall Street has replaced the earlier mindset of steady and stable growth of manufacturing and other services. The consequence is that US manufactures have been losing ground to countries such as China. In the airline industry, for example, cost cutting has lowered the quality of US carriers to what may be described as the Soviet Aeroflot standard. During a flight by a US airline from New Delhi to Newark on 20 August, even amenity kits were absent in the Spartan business class, as it appeared that it was company policy not to spend money on them in certain sectors. The Newark to Seattle flight of the same airline, even in the first class cabin, had seats with minimal reclining capability, while the food was inedible. Across the US, standards of service are going down even as charges to the consumer are rising and the profits made by big operators in Wall Street are shooting up. However, the 2008 financial crash resulted in a sudden loss of faith by the public in the financial services industry, although President Barack Obama followed the Clinton playbook of paying out vast sums of taxpayer cash to rescue Wall Street from its own excesses.
So irresistible has the Wall Street-fuelled march towards the Democratic Party nomination of Hillary Clinton been that her socialist opponent, Bernie Sanders, was forced to cringe at the Democratic Party convention and endorse her despite having pointed out on multiple occasions earlier that she was the candidate of Wall Street. The Obama administration continued the Clinton-Bush tradition of giving top posts in the economic policy silos to those who had been vetted and approved by Wall Street, such as Timothy Geithner and Lawrence Summers. Despite her harsh rhetoric against Wall Street, a President Hillary Clinton will continue the practice of placing the interests of the financial services industry at the top of her list of priorities, perhaps unlike Donald Trump, whose relations with the financial services industry are chilly and whose activities relate to the building and manufacturing economy rather than to the finance sector. Small wonder that even the (Bush era) Treasury Secretary responsible for the 2008 crash, Hank Paulson, has endorsed Clinton, as have an army of others in the financial services industry, while they have been openly abusive of Donald Trump. The support given by Wall Street and its numerous offshoots to Hillary Clinton has resulted in a flood of donations to her campaign, and to almost the entire US media entering on a near-hysterical campaign designed to convince voters that Donald Trump is a bigot and worse.
Not even a pretence of objectivity is being made by media channels such as the Washington Post and CNN, who are daily finding out new reasons to attack the Republican nominee in a manner unparalleled in recent US history. While (to protect Hillary Clinton) Bernie Sanders was made to stand down from his pledge to take his campaign up to the convention floor and beyond, an “independent” Presidential candidate has been found by financial interests who is expected to siphon off a substantial number of Republican votes from Donald Trump.
Wall Street is betting on Hillary Clinton re-entering the White House in the 2016 election, a desire shared by those members of the Republican Party who are themselves close to the financial services industry, such as former President George W. Bush and former Republican Presidential nominee Mitt Romney and John McCain, who are openly canvassing against their own party’s nominee. Main Street is far weaker in the influence game, and it shows in the fact that the wind seems to be filling the Hillary sails. Smart money is betting that Wall Street will prevail over Main Street, and that the financial services industry will as usual get the better of the manufacturing and building sector, by their candidate decisively defeating another who does not (in practice rather than speech) share the same loyalty to Wall Street.
However, the race is far from over, as the anger against Wall Street (or what is called “the system”) is palpable across the US, and may result in a large number of votes going to Donald Trump or the Green candidate as a protest against the post-1990s establishment and its candidate, Hillary Clinton. Millions of voters have watched their standard of living plummet. In particular, hundreds of thousands have lost their homes to bank foreclosures, even while these same institutions were given massive handouts by the Obama administration throughout 2009-12. Apart from the fact that the manufacturing industry is smarting from the neglect it is suffering in contrast to the largesse showered on the financial services industry by successive administrations, other factors are operating in favour of Trump as well that may be resulting in an “iceberg formation”. So far as his support is concerned, the bulk of it may be hidden “under the water”, the way most of an iceberg is.
The three other factors that have come to the surface in this extraordinary election are (a) a growing uneasiness about China and its rising power and a worry that this will soon become irreversible; (b) fear of the reach and potency of Wahhabism and its terror machine; and (c) a perception that relations between the black and white races have become worse rather than better after the country’s first African-American President took office in 2009. Hillary Clinton has had extensive contacts with the Chinese leadership, in contrast to Donald Trump, who has almost none of such linkages, while on Wahhabism, his rhetoric has been fiery rather than accommodative in the manner of his opponent, who has close links to Qatar, Saudi Arabia and other GCC states. The perception that Trump would be far more hawkish on China and on Wahhabism than Hillary Clinton is an important factor explaining the fact that the Republican candidate is still within striking distance of victory on 8 November. However, where Hillary Clinton scores decisively over Trump is in the non-white vote, which has been put off by the Republican candidate’s rhetoric, some of which could be interpreted as majoritarianism. Whether such a gap can be bridged by bridge building to the powerful and vibrant African-American and Latino communities, and by the majority (white) community US citizens coming out to vote for Trump in large numbers (in contrast to low turnouts within this group in the past), remains to be seen.
Having built up a formidable war chest, Hillary Clinton has the cash needed to power a blitz of advertising during the coming weeks in addition to the food of supportive coverage she has been getting in the US media. Trump’s early mistakes, especially some of his remarks against Hispanics and African-Americans, may yet result in a defeat for the construction magnate. Whoever wins, this will be the most consequential US election since that which saw Franklin Delano Roosevelt in the White House in 1933. As of now, it is clear that Wall Street has the edge.
However, much could change during the coming two months. The US voter is seething and is worried, a mood that may result in a surprise for the establishment, the media and the pundits on 8 November.