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Could a mechanic in Nebraska determine control of the Senate?

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AT MOST POLITICAL events in America, the arrival of the candidate is a big deal. A crowd builds, underlings prepare, and eventually the chosen one sweeps in, shaking hands, waving and generally being the centre of attention. That was not what happened when Dan Osborn, an independent candidate for the Senate in Nebraska, arrived at his event in Omaha on October 22nd to discuss Social Security. Instead, he arrived early, then milled around at the back, looking like another member of the crowd. Yet Mr Osborn has ambitions to achieve one of the biggest upsets of this election: unseating a Republican incumbent, Deb Fischer, in what ought to be one of the safest seats in America.

According to a poll conducted for The Economist by YouGov, Mr Osborn is seven points behind Ms Fischer, 50% to 43%, with the rest undecided. That suggests his chance of winning is slim. It cannot, though, be entirely ruled out. Another poll conducted around the same time for the New York Times put Mr Osborn just two points behind. If that poll is correct, and ours is not, then Mr Osborn holds a significant chance of determining the majority in the Senate. Yet even if Ms Fischer sneaks to victory, Mr Osborn’s run could be consequential. He proves that in the least competitive of states, a complacent incumbent in the Senate can still be challenged.

Mr Osborn’s candidacy has a curious origin story. He entered the race last year after Mike Helmink, a union leader who had planned to run himself, dropped out after being refused time off by his employer, and drafted Mr Osborn instead. Initially he courted the Nebraska Democratic Party, which chose not to stand a candidate, but after the deadline to declare for a primary passed, he changed his mind and said he would run as an independent. That meant forsaking the organisational and fundraising help of the Democratic Party—but allowed him to run his own campaign with his own platform.

It seems to be working. Unusually, both Nebraskan Senate seats are up this year. The other Republican incumbent is Pete Ricketts, a member of the billionaire family which owns the Chicago Cubs baseball team. Mr Ricketts was appointed to the job last year after serving as Nebraska’s governor. He faces a special election. According to our poll, Mr Ricketts is leading his Democratic opponent by 18 points. That gives a sense of how many Republican voters Ms Osborn is winning over.

Why is he doing well? It must help that he comes across as a very ordinary Nebraskan. His only previous political experience is as a union leader who led a strike at the Kellogg factory in Omaha, where he worked as a mechanic for 22 years. Before that, he served in the Navy and in the Nebraska national guard. And he is running a smart campaign, attacking Ms Fischer for backing business interests in the state over ordinary Nebraskans. A union-linked super PAC supporting him has bought inexpensive advertising in rural newspapers and on radio stations targeting voters in Ms Fischer’s heartland with surprisingly detailed critiques of her voting.

His key appeal, however, seems to be his independence. Ideologically, Mr Osborn is eclectic. Like any union Democrat, he denounces billionaires and millionaires and special interests, and wants taxes to rise on high-income workers to save Social Security. But he is also highly critical of illegal immigration (which he sees mostly engineered by the boss class to keep wages down). Though he is pro-choice, he stresses he is a Catholic who opposes abortion personally. At times he compares himself to Joe Manchin, the outgoing maverick Democratic-turned-independent senator from West Virginia. His advertisements go further: one of his latest features Osborn voters accusing Ms Fischer of stabbing Mr Trump in the back.

Our poll finds that most Nebraskans expect him to vote with Democrats if he wins. Of those who say this, a large majority are supporting Ms Fischer. But 17% expect him to be a genuine bipartisanvoting roughly evenly. These voters  are overwhelmingly backing Mr Osborn, by 83% to 11%. That explains the approach Ms Fischer has taken in response. In the final weeks of the campaign, a super PAC that supports Republicans in the Senate has poured money into the state to pay for adverts suggesting Mr Osborn has links to Bernie Sanders (the socialist senator from Vermont supported the strike at Kellogg). In an interview, Ms Fischer says that “he is not honest”. Her spokesman says he is a “liberal Democrat in disguise”.

That message, and voters’ partisan reflexes, should be enough to save her. Even so, Mr Osborn has shown that Republicans can be vulnerable even in the reddest of states. His success hints at how Democrats are struggling with a perception they “have lost touch with the working class and look at working class areas in a condescending way”, says Robin Johnson, a political scientist at Monmouth College in Illinois. Perhaps the party should consider standing aside in a few more red states.

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Donald Trump sacks America’s top military brass

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THE FIRST shot against America’s senior military leaders was fired within hours of Donald Trump’s inauguration on January 20th: General Mark Milley’s portrait was removed from the wall on the E-ring, where it had hung with paintings of other former chairmen of the joint chiefs of staff. A day later the commandant of the coast guard, Admiral Linda Fagan, was thrown overboard. On February 21st it was the most senior serving officer, General Charles “CQ” Brown, a former F-16 pilot, who was ejected from the Pentagon. At least he was spared a Trumpian farewell insult. “He is a fine gentleman and an outstanding leader,” Mr Trump declared.

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Checks and Balance newsletter: The journalist’s dilemma of covering Trump

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Checks and Balance newsletter: The journalist’s dilemma of covering Trump

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Germany’s election will usher in new leadership — but might not change its economy

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Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

Germany is 'lacking ambition,' investor says

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