Economics Blunt A Blue Wave In 2018 Elections, But Danger Signs Mount For GOP

All politics is local, Tip O’Neill observed, and despite the national battle between Donald Trump and the Democratic “resistance,” the mid-term elections in rural states and the Midwest showed this dictum still holds. Democratic senators with proven grassroots appeal like West Virginia's Joe Manchin and Ohio's Sherrod Brown won handily Tuesday, while less established figures like Indiana’s Joe Donnelly, Missouri's Claire McCaskill and North Dakota's Heidi Heitkamp, all of whom at times played to the center, went down ignominiously.

Yet to a large extent, national and geographic factors played a role this year, much as in 2016. President Trump may drive coastal sophisticates, women and minorities wild with his often inane comments, misogyny and demagoguery, sparking unusually high turnout, but in the middle of the country his policies, at least so far, have coincided with rapid job and income growth not seen in a generation.

Income growth is now largely strongest in the pro-Trump states. In the second quarter, Texas led the nation with 6% income growth, followed by Louisiana, Kentucky, North Dakota, blue-tilting Colorado, Arkansas and Iowa, which were all north of 5%, according to the Bureau of Economic Analysis.

Strong wage growth in blue-collar sectors, particularly manufacturing, make voters in Trump’s America feel like he’s done enough to dump the Democrats rather than candidates linked to the president.

However Tuesday night’s results, with the Democrats seizing control of the House of Representatives on a wave of victories in suburbs of big cities that were formerly Republican strongholds, aided by demographic trends, suggest that there’s a blue wave moving in from the coasts, boding poorly for the GOP in future elections.

Role Reversal

Once upon a time the GOP was the party of the business elite. Not so much anymore.

Trump states tend to make things -- they build houses, drill oil wells, make cars and grow food. The Democratic America increasingly makes its living off tourism, software, media and finance -- all sectors that strongly backed Democrats this year.

The Democratic Party’s burgeoning economic base in the richest fields allow them to consistently spend more than the GOP in key congressional races. The Republicans still have support in energy and other older, basic industries, but they don’t boast the kind of executives who are widely touted now as role models, like Michael Bloomberg, Warren Buffet, Bill Gates, Elon Musk, Jeff Bezos and Tim Cook.

The French Marxist economist Thomas Piketty aptly describes this conflict as “the brahmin left against the merchant right,” that is between a highly educated elite in tech, government, media and bureaucracy versus what is left of Main Street.

This Brahmin-merchant struggle can be seen in the results of crucial congressional races. The GOP held onto Main Street in most places, winning easily in the small towns, exurbs and newer suburbs. Trump’s 2016 election was made possible by these people and industries, and so far his presidency has delivered both a real and psychological boost for them. Despite repeated tales of how tariffs are destroying manufacturers, the industrial sector, after weakening at the end of President Obama’s term, has been enjoying its best growth since the mid-1990s. Critically, incomes are up for the lower deciles of the labor force, including youth. In 1992, 15 of the 20 most manufacturing oriented congressional districts were Democratic; today all 20 are controlled by the GOP.

Trump has in fact been very successful for Main Street and the industrial economy. Yet most Americans today do not live in small towns or buy most of their products from local friendly vendors. The sectors Trump supports are not on the cutting edge of history.

The Democrats' Suburban Coup

The Democrats made their most significant gains in suburbs near big cities -- home to growing numbers of minorities and upwardly mobile millennials. Many of these people are offended by Trump’s loutishness and xenophobia; younger voters, who tend to be less patriotic and religious, are less subject to the GOP’s nationalist and conservative social appeal. Republicans lost upper-income suburban seats around Los Angeles, Washington, D.C., Chicago, Houston and Dallas. As someone who spends much time in the latter two great Texas cities, you could smell the impending change just by talking to people and looking at the endless sea of Beto signs. In two to five years, more seats, including in the Senate, could be in play.

This rise of gentrified politics has long been a feature of California, where the party lost at least one or two seats Tuesday. Once the home of the most fearsome Republican machine in the country, the Golden States is now deep blue, and its business elite in both Silicon Valley and Hollywood function alternatively as funders and court jesters for the Democrats. In crucial House races in places like Orange County, where I live, they outspent the Republicans handily. They also appear to have out-thought and out-campaigned them.

Yet it’s not just the elites that win elections. The Democrats have mobilized a lot of progressive volunteers, from the ranks of young devotees; my house was canvassed three times by supporters of University of California-Irvine law professor Katie Porter but not by her opponent, Rep. Mimi Walters. Grassroots enthusiasm matters, and Trump has done a great job of rousing his opponents. Porter may have lost by 3 points, the forces she has excited will still be in play.

Critically, the Democrats in California, and elsewhere in the nation, have combined their high-end support from wealthy suburbs with an appeal to minorities. In 2012, the California electorate was about half non-Hispanic white; by 2030, that ratio will drop closer to 40%. Asians, despite their relative wealth and opposition to affirmative action in college admissions, remain reliable members of the Democrats’ “rainbow” coalition. In 1998, the percentage of Asians nationwide identifying with Democrats was 53%; today, it’s 65%.

The only countervailing trend is the fact that more Americans -- contrary to the conventional wisdom of the media and the investment community -- are migrating in bigger numbers away from the big deep blue metro areas like New York, Boston, Los Angeles and San Francisco. They are settling in places like Texas, where younger voters (18-29) overwhelmingly supported Beto O’Rourke, 71% to 29%. Voters aged 30-44 leaned toward him, 51-47. Voters over the age of 45 favored Cruz 58-41.

If you are betting on the future, it gets ever more dubious for the GOP -- even Texas looks wobbly. If they are losing or barely winning affluent suburbs amidst a thriving economy, this is very bad news. Every year GOP voters die, and new predominantly Democratic ones replace them -- not only in deep-blue areas but more contestable ones like California’s Orange County, inner-ring Houston and Northside Dallas.

This all suggests that, even in a strong economy, the Democrats enjoy significant long-term demographic advantages in coming elections. Even strong economic gains for low-income workers has not (to the consternation of Republicans) eroded Latinos and African-Americans affinity for the Democrats. Both groups went overwhelmingly blue this year.

Demographic change has not advanced far enough yet in Georgia and Florida to enable the dynamic African-American candidates Stacey Abrams and Andrew Gillum to prevail in their gubernatorial races.

Nonetheless, until the GOP finds a way to appeal to these voters and immigrants, as Nixon and Reagan did with white ethnics, the blue wave may continue moving in from the coasts, employing their cultural dominance, media support and control of academia to devastating effect. Unless the Republicans find an answer, the party may find itself increasingly as irrelevant in much of the nation as they already are in California.

This piece originally appeared on Forbes.

Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Photo by Kyle Tsui from Washington, DC, USA (Women's March 2018) [CC BY 2.0 ], via Wikimedia Commons