Two Local Elections 7350 Miles Apart – So Different Yet So Similar

 

Earlier this week, Democrat Conor Lamb very narrowly defeated Republican Rick Saccone to win a seat in a district in Pennsylvania that President Trump won by 20%+ margin in November 2016. This was heralded as a pointer to a Democrat landslide in the November 2018 mid term elections. This is indeed true to American form. After a Presidential victory, the President’s party does lose a lot of seats in the following mid term election. But are confident projections of Democrats winning back the House of Representatives in November 2018 overblown, at least at this stage?

Local elections, at least in a non-Presidential election, are almost all about local issues. In this case, there was no question who was the better candidate. Democrat Conor Lamb was a fresh, energetic face and an ex-marine who rejected the positions of the Democrat leadership in Washington DC. He was, for all electoral purposes, a Trump Democrat candidate. He supported Gun rights, he was pro-life, he supported the recent Tax Cuts passed by President Trump and he was a supporter of Trade Tariffs announced recently by President Trump. What a perfect candidate for a district in Trump country in the Midwest?

What we found amazing is that one visit by President Trump was enough to pull up  Republican Rick Saccone from a 6-8 point deficit to a near tie in this election. The real lesson is that the GOP has to field candidates that are right for the district in which they are running, especially in the old Democrat Midwest. The Trump appeal is still vibrant but it needs to back a candidate who is the right fit for that district.

In any case, this election seems to have served as a wake up call for the Republicans and it seems to have galvanized the Democrats for the November 2018 elections. The big question is which parties show up in the Midwest? The Pelosi-Obama left wing Democrats or the traditional blue collar, pro-tariff FDR Democrats? The Trump-FDR Republicans or the traditional country club rich people’s GOP? If the Trump Republican party shows up in the Midwest, we think they keep the House. In any case, it is going to be fun to watch.

Another election took place this week some 7,350 miles away from the above district in Pennsylvania. An election that was more stunning and perhaps more galvanizing for the coalition that won. All eyes in India and in the global foreign policy establishment are on May 2019 when national elections will take place in India. Not only does Prime Minister Modi needs to win but he may have to win big to maintain his absolute hold on power.

The huge prize in a national Indian election is always Uttar Pradesh, the massive state with 160 million + voters in North India that is virtually a country in itself. While small town Pennsylvania is relatively simple, the election calculus in Uttar Pradesh is incredibly complex. Elections in Uttar Pradesh have always been fought on the purest of identity politics, on coalition building of numerous ethnic communities or Jaatis. You have the upper strata jaatis on one end and the Dalits, the lowest jaatis at the other end. In the spectrum between these two are a number of jaatis including “other backward” jaatis. This is for the simplest of motives – to the winning coalition of jaatis go the spoils until the next election.

Prime Minister Modi swept Uttar Pradesh in 2014 with a unifying message about inclusive development for everyone. After the economic disaster of the previous national government, Modi’s economic message, his all-Hindu posture united the Hindu vote to win virtually all the parliamentary seats in Uttar Pradesh. He repeated this message and swept the state election last year. That is when Modi’s leadership became unquestioned in Indian politics. A week ago, PM Modi won the far northeastern states that had never been won by his party since independence.

Right on heels of that big election victory, came a couple of stunning losses in the heart of his power, Uttar Pradesh. Right in Gorakhpur, the town of his hand-picked Chief Minister, an opposition coalition defeated the BJP. Now all of a sudden, PM Modi seems vulnerable and that too where it matters the most in 2019.

Unlike Conor Lamb in Pennsylvania, the candidates were not the story. It was the coming together of two sworn enemies, the two leaders of jaati-coalitions that had won & governed Uttar Pradesh in the two elections prior to 2014. One leader is Akhilesh Singh, the prior Chief Minister, with his & his father’s base in the Yaadav community & related “other backward” jaatis and the other is Mayawati, the firebrand leader of the Dalit communities.

Mayawati was known for her bribe-based style of governing in which paying bribes to government officials was the only way for people to get anything done. Akhilesh Singh, or more appropriately his father, was known for goonda-raj, meaning goon-squad rule. Uttar Pradesh became India’s basket case under these two. No wonder PM Modi’s “inclusive development for all” message resonated & identity politics was shelved aside in 2014 & 2017 elections.

But identities are seldom shelved for long. The good economic days promised by PM Modi and his “make in India” campaign have not yet been realized, at least not compared to the expectations raised in 2014 & 2017. Worse, the higher jaatis became more vociferous & abusive in the last year after Yogi Adityanath became Chief Minister. On top of this, Prime Minister Modi did NOT campaign personally in the Gorakhpur & Phulpur elections, leading to speculation about a power struggle between him and Chief Minister Adityanath.

These two election victories have galvanized opposition parties in India. They now realize that by coming together & campaigning as one they can offer a stiff challenge to PM Modi. These defeats have also woken up the BJP. The key to 2019 in Uttar Pradesh is simple as always – if BJP can unite the numerous jaatis, they win big; if the two leaders of jaati-coalitions can stay united and campaign on identity benefits theme to break the Hindu vote, they win.

There is another factor that will be in play in both November 2018 in America and in May 2019 in India. Local elections get decided on local issues while national elections get decided on national issues. We expect President Trump to campaign aggressively in the next few months. His message will be simple. He has worked hard to deliver what he promised – tax cuts, tariffs on unfair trade partners and bringing jobs home.

He will promise to pass an infrastructure program next year and to make his popular tax cuts permanent. He will point out that Democrats have not worked with him to pass any of his successful bills. So he will ask people to elect more Republicans so that his bills will get through in 2019, bills like lowering prescription drug costs, infrastructure programs. His question will be simple – whom do you trust to keep his commitments? President Trump or Democrats? And signs are encouraging for him:

  • Don’t look at this chart if you dislike the idea of a second Trump term: Confidence in US economic policy is rising sharply, according to UMichigan survey. (h/t Jim Paulsen)

Things are not so simple for PM Modi. But his election is farther away, 14 months away. After all, how did President Trump’s chances look in September 2017, 14 months prior to November 2018 elections? Not only do we expect populist economic programs later this year from PM Modi but we also expect very diligent efforts to make the jaati-calculus more favorable to the BJP. After all, Mayawati of Dalits & Ahkilesh Singh of Yadavs are sworn enemies. Will they be able to stay together during the all-important division of electoral seats for the 2019 election or will they fight between themselves? The trouble with identity politics is that warring identities rarely stay & work together in a sustained manner.

There is another difference between President Trump and PM Modi. Mr. Trump has not wavered from his commitment to his dedicated base of Evangelical Christians. In contrast, Mr. Modi has relatively ignored his Hindu base in his desire to curry favor with international media. So his Hindu base is relatively unenthusiastic. And this lack of enthusiasm may have shown up in last week’s elections in Uttar Pradesh.

It was such a lack of enthusiasm that torpedoed the previous one-term rule of the BJP from 1998 to 2004. Both PM Modi and his Hindu base remember the lesson of that lack of enthusiasm in 2004. So we think the two will come together to win again. 

In any case, if you like watching election campaigns, you are going to have fun from now until November 2018 in America and from now until May 2019 in India. Is there a better contact sport in the World?

 

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