What a week this has been. President Obama spoke to the nation about the San Bernadino horror on Sunday night and, in response, Donald Trump put forth a plan to “temporarily ban” Muslims from entering America “until our representatives figure out what’s going on”. True to Brand Trump, he didn’t just announce it but launched it to a raucous cheering reception by the capacity crowd at Yorktown, South Carolina. No one in the media could believe what they were hearing and so their reporters went around desperately seeking people who were against Trump’s plan. Guess what they heard:
Watch the comment in this clip from 00:30 to 00:59. Nicole Wallace, a guest on MSNBC’s “Morning Joe” on Tuesday morning described this comment as “primal desire“. The show’s host, Joe Scarborough, announced that the Republican Party would ban Trump from being their nominee in the 2016 election. Their tone changed by next morning. By then Nicole Wallace had found that the desire she labeled as “primal” was indeed shared by many of her gentle urban friends in Manhattan:
- “I went around New York City when I left here … I took my son to the Doctor & Nurses , people I could not have, in my own political stereotyping, have expected to be drawn to what he said came up to me & whispered, because there is almost a little bit of shame to like the things Trump says now, people who work in restaurants .. came up to me & said it is not politically correct but I am for what he said & the media is not being fair to him. People are not only open to him that I didn’t expect to be open to him but people are feeling defensive on his behalf against people in the media” [emphasis ours]
Joe Scarborough added “I am shocked, as Nicole said, by the Democrats that are coming up basically saying the same thing – yeah that’s offensive but you know it’s right“. Kudos to both Nicole & Joe for being honest & open about their findings. This was not just the case on morning MSNBC. In the evening on CNN, Erin Burnett, Anderson Cooper and even uber-left anchor Don Lennon expressed their honest surprise about the reactions they heard. Lennon said “… I went to my barber shop and people were saying they agreed with him“.
Perhaps, the most amazing comment came from NBC’s political director Chuck Todd on NBC Evening News on Thursday:
- “undecided number is this poll is 15%, between 15 & 20; … it was a live poll; there may be more people that support Trump’s position but don’t necessarily want to tell somebody over the phone when we do these polls that they are for him; there is one other thing is this poll that is good news for Donald Trump – 77% of Republicans say that they appreciate or like the way he tells it even if at some point he does it inelegantly; lot of people in this party like how Donald Trump is bringing up some issues” [emphasis ours]
Remember the Wayne Gretzky dictum about skating where the puck is going to be, not where it has been? Donald Trump has been playing this Republican contest like the Great One. Actually, Trump is one step better. Look at this week. Trump recognized on Sunday that the speech of President Obama had disappointed the American people, left them leaderless. So Trump skated ahead on Monday evening with his plan and the public sentiment went to where he had skated.
This has been the story of Trump’s campaign. He recognizes where the puck of American sentiment is going, skates there by taking a position and the puck follows to where Trump has gone. This is the way a champion plays the game, the way Gretzky played. Average players found themselves flat-footed and caught in the wrong position just like Trump’s Republican opponents. Look at what Dennis Beck, a Navy veteran who patrolled the waters off of Cuba during the missile crisis, told Slate.com – “These others are boys; He is a man“.
Trump achieved something else, something that only John King of CNN alluded to on Tuesday morning. He said that Trump had now positioned himself against Obama while other candidates were still fighting each other. President Obama disappointed the American people and left a gap. Donald Trump filled the gap. Look at his tweet on Sunday evening:
- Donald J. Trump @realDonaldTrump – Is that all there is? We need a new President – FAST!
Then on Monday evening, he acted like the President and announced his plan. In one stroke, Trump elevated himself to an equal fight with President Obama. In marketing parlance, he made it a Brand Trump vs. Brand Obama contest. A candidate cannot get more Presidential than that.
By playing like Gretzky, by bringing the American sentiment towards him by staking a Champion’s lonely & daring position, Trump is establishing his brand to be the brand of competence, of success. This puts his brand in direct & vivid contrast to Brand Obama which is increasingly getting labeled as incompetent.
We had introduced the Anti-Obama concept back in July 2014:
- “We think the 2016 campaign will be run against President Obama’s tenure just as the 2008 campaign was run against President’ Bush tenure. That is why the candidate who is most anti-Obama, who seems most capable of delivering what Obama could not, is the candidate most likely to succeed”
We discussed this Anti-Obama concept in our article about San Bernadino last week. Some others took up this term during the last week and focused on the personality differences. To us, the Anti-Obama term is more about the contrast to Brand Obama than the person of Obama.
Look at the elections that followed a two-term President:
- George H.W. Bush in 1988 – Brand Reagan was flying high after two great terms of President Reagan. Mr. Bush was an accomplished candidate in his own right. But he was running under the banner of Brand Reagan. No Democrat could have beaten that in 1988.
- Fast forward to 2000 – That was another beacon on the hill moment for America. The economy was robust, the stock market was making new highs, the incomes were high, American 401Ks were at their peak and new innovative American companies were the envy of the world. Vice President Al Gore should have won that election in a cake walk the way President Bush did in 1988. But, despite its economic success, Brand Clinton had a huge stain – the stain of immorality of Bill Clinton. Mr. Gore tried hard to disassociate himself from that stain; he banished President Clinton from his campaign; he vividly & publicly demonstrated his fidelity towards his wife by kissing her on the stage of the Democratic convention. It worked but not well enough. Gore won the popular vote but lost the electoral vote.
- Remember 2008? – Brand Bush was already damaged by the Iraq war. Then it got destroyed because of the financial crisis of 2008. Even his loyal supporters deserted his party. True, Senator McCain ran a bad campaign. But the McCain-Palin ticket was ahead of Obama-Biden in early September. Then came the Lehman bankruptcy & the TARP mess. No Republican would have won after that.
The reality is that the most important factor in a post two-term election is the brand of the sitting President. Trump gets it and has focused his campaign on building his brand of competence and success in contrast to the increasing recognition of incompetence of the Obama administration. A survey released this week showed that Middle Class Americans have lost 30% of their net wealth in the past decades. Trump has shown he gets this by focusing on the damage trade deals have done to American workers. To this base, Brand Trump beats Brand Obama hands down.
But the Obama brand is unique and has unique strengths. His policies may not be popular but his persona remains popular and strong. Remember Brand Bush was still popular enough for McCain-Palin to lead Obama-Biden as late as September 2008. And, to use a markets term, the weakness of Brand Obama in foreign policy is now priced in by the American electorate. So that may not be enough for Trump to win in 2016 especially given the demographic advantages for Democrats.
So, as in 2008, the election might well swing on the direction of the economy in 2016. Here the outlook is not positive for Brand Obama. Smart analysts have begun discussing the possibility of a recession beginning in 2016 and a severe stock market decline.
- Citibank Economist Steven Wieting said on CNBC this week that he is putting “the odds of a recession at 25 percent for next year, with the chances increasing to 50 percent in 2017“.
- Economic Cycle Research Institute spoke on Bloomberg TV this week about a “pronounced, pervasive, persistent slowdown” into 2016.
- Jim Rickards, author of “Currency Wars”, wrote this week – “The U.S. is heading into a recession, and the Fed’s rate hikes will accelerate that eventuality”
- Jim Cramer on CNBC this week – “Commodities are telling us the world will be in a recession in 2016 just when many expect the Fed to be on autopilot with a series of Fed hikes“.
- Jack Bouroudjian, CEO of Index Futures Group, said on CNBC this week that he expects a 20-30% decline in the stock market in 2016.
Donald Trump has skated to a place where he can benefit from even a small slowdown in the US economy. If the number of new jobs created goes down, Trump can talk about unfair trade deals and how he will stop other countries from exploiting incompetence of American leaders like Obama. (remember NAFTA was the baby of President Clinton, an accomplishment that Hillary Clinton raved about in the 1990s).
Every American voter remembers the financial crisis of 2008 and the recession that followed. President Obama used that excuse to justify the slow growth during his administration. Remember President Clinton’s speech in the 2012 Democratic Convention in which he said the problems of 2008 were so deep that even he could not have done any better than President Obama did in the first four years. That implicitly promised that the second term of the Obama Administration will be a period of stronger growth (and Hillary Clinton will be held to that promise made by her husband).
What if, instead of stronger growth, 2016 brings in a recession or a real slowdown? Will Brand Obama be able to withstand that? We seriously doubt it. In fact, a recession or a big stock market decline in 2016 might be the last straw that makes even supporters of Obama move to Trump, not because they like him, but to protect their financial future and the future of their kids.
So the next time Donald Trump says something that you don’t like, do not react emotionally and call him names. Look at his move from a Gretzky angle and ponder whether that is yet another place where the sentiment will follow Trump and whether that will enhance Brand Trump over Brand Obama. At every step so far, Trump has gained more supporters with even Democrats coming over to his side. That is the sign of a smart, well-planned campaign for the long game and not a series of emotional tirades.
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