Date: 3/15/2022
Author: Mr. X
A new poll from The Wall Street Journal showed 57% of voters disapprove of President Joe Biden’s job performance. President Biden’s approval rating remains at 42% – and this is even after positive polling data for the recent State of the Union and the president’s handling of the crisis in Ukraine.
President Biden is in something of a political trap. He has an opportunity to break free of the political stagnation that has crippled his Administration since the failure of Build Back Better. The president has bipartisan support for taking a strong stand on the war. If anything, Republicans are attacking President Biden for not being militant enough when it comes to crafting a tough response.
There’s also a deep split within the Republican Party. While the Democrats are floundering (more on that later), the split within their party is at least broadly understandable. There are moderates and progressives (or, if you don’t like them, radicals.) Nancy Pelosi may be a far-left socialist to some Republicans, but she’s explicitly defended the free-market system. Even the supposed socialists like Alexandria Ocasio-Cortez have put forward policies (like universal healthcare) that are defended by conservatives in other Western nations.
There are major ideological differences between President Biden and the progressive wing of the party – but it is mostly about the way things should be done or how far things should go. There’s not the same severe break when it comes to first principles. On issues like organized labor, health care, tax policy, and even Ukraine, the Democrats are largely united ideologically but are divided pragmatically. We don’t know what someone like Senator Joe Manchin “really” believes, but it doesn’t matter. He wouldn’t be an elected senator from West Virginia if he aped AOC’s policies – nor would he gain more personal power from being just another Democrat vote the leadership could take for granted.
Republicans face far deeper divisions. Look no farther than the Russia-Ukraine War. It’s an overstatement to say that many on the American Right “support” Russia. This is disingenuous framing by the media. However, many grassroots leaders (notably Tucker Carlson) have been deeply critical of American foreign policy and loudly opposed to any policy that could drag the United States into the war. In contrast, Republican politicians are going farther than President Biden when it comes to what they want.
Yet for now, this doesn’t matter. One of the great things about being in the opposition is that you can float ideas without consequence. For example, Senator Lindsey Graham called for President Putin’s assassination on Twitter and has suggested that Putin needs to be “gone,” vaguely suggesting that he must be taken out by his own people. That’s unlikely in the short-term. A poll from an independent organization found that President Putin’s job approval was greater than 70% in Russia. Another poll found that 58% of Russians approve of the “Special Military Operation.” Still, this comment shows that the GOP can still take the “hawkish” position on Russia without any of the risks and paper over the serious divisions in the party without consequence.
President Biden would massively benefit if the Putin regime fell. There are cracks emerging in the Kremlin. Viktor Zolotov, head of the Russian National Guard, admitted that the invasion has been slower than expected. President Putin has already had to admit that conscripts were sent into his “special military operation,” contrary to official denials. It’s likely that the Russian government is undercounting its casualties, which the United States estimates at 4,000 dead. This includes Major General Andrei Sukhovetsky, Major General Vitaly Gerasimov, and Major General Andrei Kolesnikov. The fact generals feel the need to expose themselves like this suggests frustration and the need to take a “hands-on” approach to forces that seem incapable of making swift progress. Time is not on Russia’s side and once again, there have been no major offensive actions.
However, Ukraine’s odds shouldn’t be overestimated. President Volodymyr Zelenskyy has Western media on his side but the United States is unwilling to declare a no-fly zone over Ukraine. Most Republicans aren’t even willing to go that far because it would mean a de-facto conflict with Russia. Russia may be seeking a way out with a face-saving compromise, but the economic consequences have been so disastrous that President Putin may feel he has no choice but aim for outright conquest, at least of the east. He’s surely cursing himself for not at least moving to secure the two eastern breakaway republics as well as Crimea in 2014.
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Meanwhile, President Zelenskyy is a hero today, but the nationalists that are fighting hardest in areas like Mariupol would turn on him if he makes any territorial concessions. There’s no way that President Putin can turn away from the war without at least ensuring the independence of the Donbas and Luhansk People’s Republics and formal Ukrainian cession of Crimea. While the Ukrainians are resisting ferociously, Kyiv is all but surrounded, Mariupol is encircled, and Kharkiv is being shelled heavily. Now that he knows the West won’t do anything more than it already has, President Zelenskyy must be considering worst case scenarios. Yet could he grant any piece of Ukrainian territory (especially Crimea) and still survive politically?
Peace talks are reportedly restarting today with a remote meeting. Anything can happen. Yet I’d doubt this war will end anytime soon. For President Putin, this conflict has become existential. He can’t walk away from it without at least taking Kyiv and securing the east. President Zelenskyy also can’t concede any territory and survive politically. Russia’s expectation that they would be welcomed as liberators was wrong, but Russia could push Ukraine into chaos if it imposes a divisive peace. Given that sanctions will almost certainly remain in place regardless of what Russia does in the next few days, President Putin has no reason to back down now. The economic damage is a sunk cost.
It’s not for President Biden. The assumption going into this year was that the Federal Reserve would impose several rate hikes to stop inflation. This first hike is expected this week. However, that is going to be a major drag on the stock market. If handled poorly, it could lead to a recession or even stagflation.
President Biden has a political strategy for how he is going to face this – blame Russia. “We need to be honest with the American people – the battle for freedom has its costs here at home, as well,” said President Joe Biden. “People are already feeling Putin’s price hikes at the pump.”
There are a few problems with this strategy. First, the entire country has been hearing stories about Russia and its supposedly nefarious influence on American policy for years. Blaming Russia isn’t anything novel – it sounds like the same line that was being deployed during the Trump Administration. Given that other polls show most Americans think Putin would not have invaded if President Donald Trump was still in charge, blaming Russia not only sounds dated but doesn’t connect with the public.
Second, President Putin is not the one who wants to stop selling oil to the West. It is the West that has cut itself off from Russian oil. It’s a simple truth that the American government, not the Russian government, is responsible for increased oil prices. This also leaves President Biden and the Democrats open to the charge that they are restricting American domestic production. That’s an oversimplification of the way oil markets work, but it will sound good in an attack ad.
Third, President Biden’s moralistic call to sacrifice only works if the American people think American interests are at risk. Ukraine is not in NATO and barring an outright Russian defeat, is not likely to be in NATO anytime soon. President Biden can win applause by calling Putin a tyrant or a warmonger – but that leaves him open to more hawkish critiques from Republicans who want America to do more to help Ukraine. Such choices risk war… but using tough-on-Russia campaign rhetoric is easy to do when you don’t have to grapple with the consequences. Republicans can rail against Russia but President Biden must move cautiously, lest he risk war. At the same time, he must pursue compromise – something that won’t mesh well with his crusading speeches regarding Ukraine.
The American people are asked to accept the following proposition. Inflation, which was already increasing before the Russian invasion, is Vladimir Putin’s fault. High gas prices are his fault too. The likely decline in the stock market as interest rate hikes kick in are his fault. Furthermore, though Vladimir Putin is being presented as a comic book villain, America can’t do too much to confront him directly. Indeed, President Biden arguably erred when he said before the Russian invasion that American troops would not fight on Ukrainian soil. Whatever else one may say about him, no one knows what President Trump would do. In contrast, President Biden openly removed some of the uncertainty from Putin’s decision to invade.
At the beginning of the year, the contributors here made some predictions. One I had was that Russia would invade. The second was that silver would exceed $24.50 in the short-term. Both came true. Another pending is that the Republicans will take back the House of Representatives. The GOP is very good at snatching defeat from the jaws of victory and is being completely outworked when it comes to redistricting. Unfortunately for Democrats, so many representatives are retiring that they are in danger of losing just about every seat they can’t take for granted. Americans will be facing shockingly high gas prices and little economic growth. Instead of a new “Roaring Twenties,” it will look more like how that decade ended.
Is there a way out for the Democrats? Yes. It’s the same thing that the economy needs. The United States can no longer take economic growth for granted. Whatever smaller parts of the Build Back Better act that the Democrats can push through should be prioritized. The Russian invasion could be used as a catalyst for a renewed push. Many individual policies are quite popular and forcing up-and-down votes on each one is likely to be more advantageous than begging Senator Joe Manchin to reconsider the whole thing again.
Unfortunately, I don’t see that happening for Joe Biden. He does not put fear or respect into the Senate Democrats that he needs. Many of the implicit arguments for his candidacy are slowly collapsing as the world looks far more chaotic and dangerous than it did when the supposedly unstable President Trump was in charge. That may be unfair to President Biden, who thus far has handled a delicate situation with deftness after the invasion. However, politically, he’s left himself and his party wide open.
The result of the Virginia gubernatorial election and the unexpectedly close New Jersey gubernatorial election also shows that waving the bloody shirt of January 6 or trying to tie the GOP to Donald Trump will be ineffective. Republicans will be going into the midterms fired up, while Democrats will be discouraged.
If anyone can blow this, the Republicans can. Still, I don’t think they will. The fact is that anyone who won in 2020 was going to inherit a very challenging environment. The Democrats could have gone big when they first took over the government and passed a massive stimulus that would have tied vast constituencies to the party. Instead, what most Americans got was a stimulus check smaller than what President Trump wanted to give them.
President Biden has far less control over the economy (and the Russian president) than many think. However, when it comes to American economic affairs, the buck stops at 1600 Pennsylvania Avenue, not the Kremlin. That may not be fair to President Biden, but “fairness” is not something that exists in American politics. Don’t assume the economy is going to suddenly turnaround by November. I’m still sticking with my prediction of a GOP victory in the House, with all that entails.
Mr. X is an investment analyst working in the Washington DC area who specializes in the intersection of business and public policy. After fifteen years working in politics, he writes on a classified basis for RogueInvesting.com to bring you news on what those with power are debating, planning, and doing.
