Millions of blue-collar voters in America’s industrial heartland supported Donald Trump.

Kevin Lamarque / Reuters
Millions of blue-collar voters in America’s industrial heartland supported Donald Trump. Kevin Lamarque / Reuters

Democrats lack cohesion in the age of Trump



The TripAdvisor reviews of the Bavarian Inn in Shepherdstown, West Virginia are pretty good. But Democratic senators, who gathered at the resort 120 kilometres north-east of Capitol Hill last month, were not there for the fine German fare but to work out how the party recovers from an election which handed not only the presidency but control of the legislature to the Republicans.

Grassroots Democrats have been unhappy at what they believe was an inept campaign. Some accuse the party establishment of sabotaging Bernie Sanders, who many believe would have beaten Donald Trump.

The battle for the heart and soul of the Democrats will be hard-fought, but in the short-term Democrats have to decide their tactics over the next two years, while they are in the minority in both houses of Congress. Already opportunities are presenting themselves thanks to the volatile early days of the Trump presidency.

There appears to be the makings of a Republican awkward squad led by Lindsey Graham and John McCain. One option would be for the Democrats to make common cause with the rebels, perhaps gambling on the Trump presidency imploding.

Conversely the party could make friends with Mr Trump on some issues such as infrastructure spending and health care and drive a wedge between the White House and Republicans on Capitol Hill.

On health, for example, Mr Trump’s replacement for Obamacare may not be to the liking of some Republicans because of his determination to keep some of the protections in the original Affordable Care Act. Some Republicans, who want a completely market-based approach, also oppose Mr Trump’s proposals to bring down the cost of drugs.

On a number of occasions he has said he supports allowing Medicare – which provides cover for the over-65s – to negotiate the cost of the medicines it buys. Democrats will be tempted to support the president if he introduces legislation to do this, especially if it is opposed by some on the Republican free market right. However, given how the Republicans tried to block the Obama administration at every turn, there will be some Democrats who would like to give the GOP a taste of its own medicine.

Should Mr Trump’s health reforms collapse, it will be the Republicans who carry the blame and pay the price at the midterm elections next year.

But this would be a step too far for Joe Manchin, a Democrat from West Virginia who believes the party should cut a deal on health care, distancing himself from others who do not want to cooperate.

“I disagree with both sides who want to play politics,” he said. “We can’t go back to what we had before when you were one serious illness away from catastrophic debt.”

Looking further ahead, the Democrats will have to answer the difficult question of how to rebuild their working-class base after millions of blue collar voters in America’s industrial heartland turned to Mr Trump.

Strategists such as Steve Jarding, now an academic at Harvard University, believe the party tacked to the centre at a time when the country was polarised.

“I think the first thing they have to do is decide that they are a progressive party. The least progressive man in America ran as a populist and progressive and ended up being president of the United States.”

Within hours of Mr Trump taking office last month, a wave of protests by women across the US demonstrated the existence of a vast radical base across the country. The challenge for the Democrats is to mobilise this anger into an electoral force.

The first real test of whether the party will swing left will take place with the election of the chairman of the Democratic National Committee at the end of February.

Some big hitters including Bernie Sanders and Elizabeth Warren – the progressive senator from Massachusetts – are backing Keith Ellison, a representative from Minnesota.

But even though this election will dictate the political thrust of the party, it has to face up to the reality of dealing with a populist president and a Republican-controlled Congress, which will try to force through a radical agenda as fast as they can.

This has already concentrated minds, according to one party insider. “Since Trump won that has disappeared and people realise they have to work together. There has also been a soul searching over tactics. The old way of doing things which involved fact, reasoning and logic doesn’t seem to work any more,” the source said.

Mr Jarding, meanwhile, advised the Democrats to wait for Mr Trump’s administration to implode.

The first weeks of the Trump administration have been fairly chaotic. His travel ban on citizens from seven Muslim countries is unravelling in the courts at home and attracting global opprobrium.

“Trump is a powder keg but instead of calling in a munitions expert, he keeps instructing his staff to bring him stick matches,” Mr Jarding said.

“I’m not sure the Democrats could do a better job of exposing Trump’s ignorance regarding policy and diplomacy than Trump is doing himself.”

David Millward is a journalist in the United States

In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

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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.”

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