The US Democrats' core voters are unenthused by the midterm elections. Photo: Keith Bedford / EPA
The US Democrats' core voters are unenthused by the midterm elections. Photo: Keith Bedford / EPA
The US Democrats' core voters are unenthused by the midterm elections. Photo: Keith Bedford / EPA
The US Democrats' core voters are unenthused by the midterm elections. Photo: Keith Bedford / EPA

America’s political gridlock is not likely to end soon


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Democratic party operatives like the Rev Al Sharpton offered an old-time remedy to angry young black people protesting at the police shooting of Michael Brown in the town of Ferguson earlier this year: “The only way you can take your destiny into your own hands is to register and vote.”

But as of two weeks ago, a paltry 128 of them had heeded that call. It’s getting a lot harder to convince young African-Americans that voting changes things in the US, six years after the country elected its first black president – for the simple reason that not very much has changed for the better for black America since Barack Obama’s election.

The grim reality facing the Democrats ahead of Tuesday’s midterm elections is that Mr Obama’s failure to deliver on the promise he seemed to embody in 2008 could result in important setbacks on Capitol Hill.

The message that the economy is doing better is simply not being felt in many poorer communities. Police violence against young black males is rarely out of the headlines. A president who promised Latino communities that he would reform immigration laws has expelled more illegal immigrants than any previous president. Mr Obama came to office promising to tackle the excesses of Wall Street following the financial crisis. Instead, there’s been no serious effort to hold the bankers to account. If anything, inequality has become even more pronounced.

It’s hardly surprising that the Democrats are struggling to mobilise their base, except through attacking the Republican agenda on race, class and gender.

Midterm elections typically see the sitting president’s party lose ground, more so in a second term. Tuesday’s vote is likely to see the Republicans strengthen their grip on the House of Representatives, and possibly even win control of the Senate – and the Democrats are struggling to mobilise their core constituencies to hold back the tide.

President Obama’s approval ratings are low, but those for the Republican-controlled Congress are even lower.

The reason most pollsters are predicting GOP gains on Tuesday is not that the Republicans are suddenly attracting millions of new voters. On the contrary, long-term demographic trends in the US point to a shrinking of the sectors that currently comprise the party’s core base, and an expansion of some sectors that have traditionally voted for the Democrats. But turnout is typically low in midterm elections, and the lower the turnout, the more the result favours the Republicans.

Demobilising the Democrats’ base, of course, has become a key Republican strategy – many poor, mostly black and Latino voters will not be able to cast ballots this time because of new voter ID laws passed by largely Republican state authorities in response to the marginal threat of voter fraud.

And then there’s the $4 billion, according to the Center for Responsive Politics, that will be spent by wealthy donors on media messages calculated to shape the election’s outcome.

That Republican effort to discourage their adversary’s core voters from going to the polls is helped by the Democrats’ recent track record in power, and their failure to put forward a clear message to rally their own base.

To the outsider, it’s often remarkable how little substantial debate over policy is involved in US elections.

The most common themes occurring in electioneering in the weeks leading up to the vote are ISIL and Ebola, from the Republican side, and the accusations that the GOP are waging a “war on women” and are trying to stop black people from voting on the Democrats’ side.

In both cases, the underlying assumption is that Americans will vote the sum of their fears rather than voting for some clear alternative policy programme. Policy is not the coin of the realm in this election. Sometimes the campaign has been more reminiscent of Halloween.

One thing this election won’t do, is break the gridlock in Washington.

The stalemate between the White House and Congress that makes the United States increasingly ungovernable looks like a long-term phenomenon.

Whether or not the Republicans win the Senate, they’ll continue to run the House of Representatives. So don’t bet on the deadlock being broken in 2016, either, because the electoral maths for presidential elections is quite different from that of congressional elections.

Republicans’ local control has enabled them to redraw the boundaries of electoral districts to ensure long-term future control of the House despite the demographic trends against them.

But in presidential elections, those demographics – white people are becoming a minority, and the Republican base is predominantly white – make winning back the White House an ever greater challenge for the GOP.

While much of the corporate money pouring into politics now is driven by a need to secure immediate favours from those in power, taken collectively it may actually reinforce the deadlock – and make the policy consensus within which America is governed more responsive to corporate interests than to the needs of the majority of voters.

That may not be good for the country, but it’s not the worst outcome for the short-term interests of the wealthy donors.

Tony Karon teaches in the graduate programme at the New School in New York

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

UAE currency: the story behind the money in your pockets
How does ToTok work?

The calling app is available to download on Google Play and Apple App Store

To successfully install ToTok, users are asked to enter their phone number and then create a nickname.

The app then gives users the option add their existing phone contacts, allowing them to immediately contact people also using the application by video or voice call or via message.

Users can also invite other contacts to download ToTok to allow them to make contact through the app.

 

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