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How to win Nevada

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THE END of America’s election season always coincides with Halloween. That can make for some deeply weird campaigning. Democrats in Las Vegas, Nevada, staged a “Project 2025 haunted house” by decorating their offices with skeletons, tombstones—and a video of January 6th 2021. A huge, fuzzy stuffed spider hangs in a web in one corner. “Look what a mess Trump has made”, a poster in front of it reads, “in his web of LIES!” A cardboard cutout of Kamala Harris (wearing a cape) stands watch over the coffee bar, where exhausted campaign staffers nurse their 6pm brews.

With just six electoral votes, Nevada is the least populous of the seven swing states. It has been the friendliest terrain for Democrats in recent elections. Every other swing state went for Donald Trump in 2016, but the last Republican presidential candidate to win in Nevada was George Bush in 2004. Yet the margin of victory for Democrats is always narrow. Joe Biden won the Silver State by just over two percentage points in 2020. As of November 2nd, The Economist’s presidential-forecast model suggests that Nevada is a toss-up. Democrats are losing ground nationally with Latino and working-class voters, who make up significant parts of Nevada’s electorate. But the party’s ground game in Nevada is strong, thanks in large part to the endurance of the political machine built by the late Harry Reid, a former majority leader in the Senate. Can Democrats eke out another win?

Because Nevada’s population is small and centralised, its political geography is easy to understand. There are three regions, electorally speaking, that matter in Nevada: Clark County, Washoe County and the rural parts of the state. Nearly three-quarters of Nevada’s 2.4m registered voters live in Clark County, which includes Las Vegas. These voters lean Democratic. Rural counties—with about 12% of voters—are heavily Republican. And Washoe County, which includes Reno, is swingy. Slightly more Republicans than Democrats live there, but the area has tended to back Democratic presidential candidates and senators in recent years.

In past elections Democrats have been able to run up the vote enough in Las Vegas and its suburbs to offset the Republican Party’s advantage in rural areas. But according to early-voting numbers, that large lead in Clark County has yet to materialise. In fact, Republican early turnout has surged. “Usually it’s been the Democrats who have [early voting] all to their own, and then the Republicans have had to try to play catch-up on election day,” says David Damore, a political-science professor at the University of Nevada, Las Vegas. “Now it’s a little bit reversed.”

Democrats are trying to stay zen. Campaign operatives suggest that mailed ballots, rather than in-person early voting, take longer to arrive and be processed. Their big lead in Clark County is coming, they argue, and the ground game doesn’t need tweaking. Not everyone is so diplomatic. “The Republicans are kicking our ass at the early voting,” exclaimed Dina Titus, a Democratic congresswoman, at a rally for Ms Harris in North Las Vegas on Halloween night. “We cannot let that happen.”

Three questions haunt the early-voting figures, and will determine whether Ms Harris or Mr Trump can claim victory in Nevada this year. The first is whether non-partisans will break for Democrats or Republicans. In 2020 the state began to automatically register Nevadans to vote when they apply for a driver’s licence. This swelled the voter rolls with non-partisans, the default choice. Unaffiliated voters jumped from a quarter of Nevada’s registered voters in 2020 to a third in 2024, and could swing the election for either candidate. Shelby Wiltz, who runs the co-ordinated campaign for Nevada Democrats, insists that the state party’s network and the Harris campaign were built to reach these voters, which skew younger than members of both major parties.

The second question is whether many Republicans will defect. In recent weeks Ms Harris’s campaign has been courting conservatives who cannot bring themselves to vote for Mr Trump. Vanessa Herbin, a 65-year-old Las Vegas resident, had never been to a political rally before arriving at Ms Harris’s gathering on Thursday evening. Supporters swayed to Maná, a Mexican rock band, and shivered in the cool desert night. Mrs Herbin has long voted for Democrats, but says her husband is a registered Republican who is also supporting the vice-president. That’s not the kind of thing that shows up in early-voting data.

Finally, it is unclear whether the Republicans voting early are new and low-propensity voters, who usually sit out elections but were inspired to go to the polls. Or if, at Mr Trump’s urging, Republicans are just voting early instead of on election day. Democrats have taken to calling this the “cannibalisation” of election-day votes. If the former is true, Ms Harris is in deep trouble and Jacky Rosen, a Democratic senator running for re-election, may have a closer race on her hands than polls suggest. If the latter proves to be correct, then the race will still be tight but Ms Harris could be saved by those slow postal votes in Clark County after all. Halloween may be over, but Nevadans are still in for a scare.

Economics

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.

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