2019-11-09_The_Economist

22 United States The EconomistNovember 9th 2019

2

1

wage workers, hurting the people Ms War-

ren most wants to help.

She finds some money from the kind of

conjuring promised by less rigorous cam-

paigns, like better tax enforcement (which

provides $2.3trn), comprehensive immi-

gration reform (providing $400bn) and the

elimination of the fund that pays for the

defence department’s Middle East opera-

tions (another $800bn). After all that, she is

still short by $6.8trn.

To make up the shortfall, Ms Warren

plans to add levies on large firms and rich

Americans—beyond those she has already

proposed. On top of the repeal of Mr

Trump’s tax cuts and a new 7% charge on

corporate profits, she would eliminate the

ability of businesses to immediately write

down depreciating capital; she would also

impose a minimum tax of 35% on their for-

eign earnings. A new financial transac-

tions tax of 0.1% would be placed on sales

of shares and bonds, wrecking the business

of high-frequency traders (perhaps a plus

from Ms Warren’s point of view). The coun-

try’s 40 biggest banks would pay an annual

fee of 0.15% on “covered liabilities” (liabil-

ities minus federally insured deposits).

The wealth tax has been revised upwards

too. Fortunes above $1bn would be charged

a 6% annual levy. A Warren presidency

could cost Jeff Bezos, the boss of Amazon,

$26bn over a single term. Nor could he es-

cape by shedding his American citizen-

ship. Ms Warren has proposed an “exit tax”

of 40% on the net worth of billionaires to

head off that threat.

These contortions are all the result of

past decisions. Despite her earlier, more

pragmatic instincts on health care, Ms

Warren adopted two nearly incompatible

pledges: to deliver Mr Sanders’ version of

single-payer health care—more generous

than that of Britain or Canada—but with-

out any premiums or deductibles and with-

out raising taxes on the vast majority of

Americans. Because her evasiveness on

funding was attracting criticism from her

more moderate competitors, like Pete But-

tigieg and Joe Biden, Ms Warren released

this plan, which seems to assume that any-

one outside the top 1% of earners counts as

middle class. During the primary election,

the strategy could work. She can credibly

answer her opponents’ claims by repeating

her quasi-official catchphrase, “I have a

plan for that”. Primary voters may shrug off

the entire episode.

A general-election contest with Mr

Trump would be a different matter. There

was reasonable speculation that Ms War-

ren’s woolliness on health care was a tacti-

cal move, enabling her to strike a more cen-

trist pose on securing the Democratic

nomination. That option now looks closed

off. The new plan opens her up to all man-

ner of attack from Mr Trump, even though

his own health plan is ill-defined, beyond a

so-farunsuccessfuldrivetorepealObama-

care,andhisrecordonhealth—2mmore

Americansare uninsuredthanwhenhe

cametooffice—isdreadful.

Goingintoanelectionpromisingtodis-

continuethehealthinsuranceofthe178m

Americanswhohaveprivateplansthrough

theiremployersseemsmad.“Democrats

nowhavea30-pointadvantageoverDo-

naldTrumponhealthcare,”saysJimKess-

lerofThirdWay,a centre-leftthink-tank.

“Ifthatgapnarrows—anditwillnarrowif

DemocratsareforMedicareforAll:it could

narrow to zero—he getsre-elected.” Ac-

cordingtotheKaiserFamilyFoundation,a

health-policy think-tank, 51% of Ameri-

canssupportMedicareforAllwhile47%

opposeit.Butwhenvariousobjectionsto

the programme are made—such as the

elimination of private healthinsurance,

andthepossibilityofincreasedtaxesand

queuesfor treatment—support drops to

below40%.Asa policy,Warrencaremight

be described as negligent. Politically it

looksmorelikemalpractice. 7

O

n the eve of the election, President

Donald Trump stood in a basketball

stadium in Lexington, Kentucky, trying to

salvage the candidacy of Matt Bevin, the in-

cumbent Republican governor who has

one of the lowest approval ratings in the

country. “He’s such a pain in the ass, but

that’s what you want,” said Mr Trump, who

in 2016 carried the state by 30 points. “If you

lose,” he added, “they’re going to say,

Trump suffered the greatest defeat in the

history of the world.” In the end, the Blue-

grass state let the president down. Though

Mr Bevin refused to concede, it looks as

though he narrowly lost (by 5,189 votes, or

0.36% of those cast) to Andy Beshear, the

Democratic candidate.

Whether that was in fact a world-histor-

ic defeat is another matter. All the other

statewide contests in Kentucky saw hefty

Republican victories. The defeat at the top

of the ticket was more a reflection on Mr

Bevin (who insisted, for example, that a

teachers’ strike had led to the sexual as-

sault of children) than a sign that Mr

Trump’s influence among Republicans is

waning. Kentucky is unlikely to be a battle-

ground state in 2020.

In another closely watched gubernato-

rial race in Mississippi, the Republican

Tate Reeves won by a six-point margin over

Jim Hood, the moderate Democrat who had

been serving as attorney-general. Though

this might look encouraging for Demo-

crats, given the state’s Trumpiness, it is

not. Mr Hood, who is anti-abortion and op-

posed to gun control, is probably the stron-

gest candidate Democrats could find in the

state and he still lost by a decent distance.

The other big victory for Democrats

came from state-legislative elections in

Virginia, where the party seized control of

both chambers. That gives Ralph Northam,

the sitting Democratic governor, unified

control over legislation and a new lease on

political life—having now weathered a

blackface scandal earlier this year that

nearly ended his tenure (rejoice, Justin

Trudeau). Though Mr Trump campaigned

in Kentucky, he studiously avoided the

contests in Virginia, where he is unpopu-

lar. Even there, the results look less like a

rebuke to Mr Trump than the inevitable

consequence of a steadily changing state,

which Hillary Clinton won by five points.

Off-year elections provide more than

mere tasseography for subsequent big con-

LEXINGTON, KENTUCKY

The results were less bad for

Republicans than they first seem

Off-year elections

Knocking on

Bevin’s door

Return of the Bourbon Democrats