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But I'd say the swing among Hispanics is bigger than that. And of course, out in some places, Hispanics did vote heavily for Biden. That usually gives people a chance to do the bromide of, "Well, they are, of course, a diverse group." Yeah, they are. So, tell us about what keys what diversity. I mean, Hispanics were really important in Bernie Sanders' victories against Biden out in some of those areas.
Paul JaySo, the short version is, it's about the economy, stupid, even though there may be all kinds of cultural issues at play here. Not maybe: there are.
Tom FergusonInteraction between the economy and culture is extremely important. I think it's directly testable. But stories that identity politics drives this stuff, frankly, they're just stupid. I mean, people need to do a little thinking.
Now, I can't resist adding this, Paul, knowing that we've talked about this. You want to know what the religious swing is that really helps Trump in this election? Now, you haven't heard this anywhere else. You haven't seen it. It's in the Mormons. You say, "What?" The answer is, remember back to 2016. I was actually working on trying to predict this and I realized Utah and these other states were way off. In 2016, the Mormons were quite skeptical about Trump. Now, it's not like they became enormously enthused. It's that they became sort of normalized in the intervening four years. And so, what we find in some of our studies well, you can see it directly in the Utah vote. It just went sort of normal-Republican for Trump. He wasn't "normal Republican" in 2016. That shows a big jump. And so, you know, I'm not trying to tell you that any angel came down and told anybody, this is really the Word of God. That's not what I think. But I think they were handed a choice between Biden and Trump and they sort of appreciated him by then as maybe not really a normal Republican, but they went for him with normal-Republican tendencies.
Paul JaySo, if the issue of the economy going forward is going to be critical. Clearly, for everybody, but also for the 74 million people that voted for Trump. And Biden's in this position of having two masters, if you will. It's not new for the Democratic Party, but it may even be more extreme now. The majority of Wall Street-finance money seems to have gone to Biden. What they wanted, apparently, was a Biden presidency because they had come to the conclusion that Trump was nuts and not trustable. And they want a Republican Senate. We'll see if they get what they want in early January.
But what Biden's going to be facing is a calamitous situation of deepening pandemic and deepening economic crisis. The only way he's going to deal with this inequality crisis is some really transformative stuff which Wall Street ain't going to like. They probably don't mind infrastructure projects if they can find a way to make money out of it, and I'm sure they can. But they're not going to want higher wages. They're not going to want the kind of unionization that Biden was promising in the election campaign.
So, what's your take on what's necessary? What do you think Biden's likely to actually do here?
Tom FergusonWell, OK, this is pretty tricky. But let me start with the question about what finance actually did. There are all kinds of reports. In the last six weeks of the election, there were people who should have known better writing articles about how the whole business community was moving toward Biden. Now, a substantial number of people clearly did that. But when I read those articles, I was laughing out loud because you could see straight away, for example, vast numbers of energy-sector folks, a good chunk of healthcare people, people in paper and other heavily polluting industries chemicals they're very unlikely to have gone against the Republicans at any level. The pollution issue is still huge. I mean, my colleagues, Paul Jorgenson and Jie Chen, and I have shown you the importance of all these polluters as a basis for a large, large chunk of Republican finance in 2012 and 2016.
Now, there are also lots of claims that the Democrats were massively more supported in total campaign spending. Those might be true, but those reports were coming from reports filed before the election and before the final week and a half or so. It's just the case that in the final week and a half, you usually see an almost literally exponential growth in financing coming in. And in 2016, there is no question. We showed it in a piece that attracted a fair amount of attention, that in particular it saved the Senate for the Republicans. And it almost certainly helped Trump win because in effect, they were just pushing the whole ticket in the final days of 2016, and it was a close election. We know that some late money in the main from private equity folks, helped turn the election around for Collins, the Republican [Susan Collins of Maine]. That's, I think, clear, but we don't know what the rest of the situation looks like. We'll find out in December. And at that point, I'd feel a lot more confident about assessing stuff. I think it is clear that a good chunk of Wall Street backed Democrats. There's enough on the record that you can see that. Thus, you size it up pretty well, I think. This is going to be very tricky.
And I would add it's all infinitely complicated by the Covid problem. Yeah, you are coming in not only with a deep recession since the Covid aid was allowed to run out at the end of the year. But you are also going to be coming in with a country where people are literally getting sick, I'm sorry to say, at an exponential rate. It's spreading like crazy. And the country has nothing in place to deal with that at all. That's just plain. The US rates now look among the very worst in the world. I mean, Phillip Alvelda, John Mallery and I just published a piece on that on INET [The Institute for New Economic Thinking's website]. It's bounced all over the planet; it's being translated into French. It shows you how crazy the American state responses have been. So, the Biden folks have to come up with an effective coronavirus response, they have to try to fix the economy, and they've got to do it pretty much all at once because they can't do this in pieces.
In 1994, Clinton got his head handed to him when he talked about national health insurance. He actually did talk about national health insurance, then switched the subject to first gays in the military and then famously that other health care plan that Hillary Clinton was said to have crafted. And then Obama did not do the big stimulus that he was advised to do by his own economic advisers. Not all of them, of course, famously not Larry Summers.
But now Biden's got to do something and he's got to solve all of this at once. This is a very tall order. And I have this bad feeling here. I mean, the scorched-earth policy I can't read what the Treasury secretary, Steven Mnuchin, just did except as a scorched-earth policy. It's just a fact. Yes, the government did give some money to help states and localities for Covid expenses, but their general revenues are collapsing because of the economic downturn. And, you know, you can't sit there. You can't contain Covid without fixing up your transport system. It takes money to put in the right type of air filters, those so-called HEPA filters and things like that.
People know how to do this. It's not overwhelmingly expensive, but you gotta do it, and you gotta do it promptly. When you poll like the state and municipal facility, which was operating with prices set so high that it made almost no sense for anybody even to try. And I think they made two loans? When you set that out and when you cut out the so-called "mainstream thing," you can't fix this thing. You will note that some of the more general programs apparently survive for Wall Street. You do not need the economic collapse of a bunch of cities right in the midst of coming to power in the middle of a serious pandemic. And, you know, with plenty of climate implications, too. I mean, the wild wildfires are burning in January, but they'll be around next fall.
Paul JayWhat does the appointment of Yellen at Treasury tell us about what Biden might be planning?
Tom FergusonWell, it tells you there's some rationality there, actually. I mean, I'm Yellen did move the Fed away from those crazy old, non-accelerating inflation-rate models, Philips-Curve type stuff. That's to oversimplify. She did push that along and they began to sort of experiment. On the other hand, you know, it's the Fed, and they were slow on a lot of consumer and just income-distribution issues. But she's at least sensitive to that stuff. Most of the other Democratic candidates for that who were practical? I didn't see them [doing well in the role]. That suggests to me that somebody is still somewhat rational there. They know they can't just sit there and go completely with the old Clinton-Obama policies. On the other hand, what are they willing really to try? I'm not sure.
Paul JayIf the Republicans do continue to control the Senate, how much can Biden do through executive order? How much can the Fed do without the approval of Congress?
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