The Finance 202: Blue-collar counties continued their drift toward Trump's GOP, setting up a challenge for Democrats

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The force driving White, blue-collar workers into the Trump camp has been the subject of a roiling debate since the last election: Were those voters motivated primarily by anxiety as their economic outlook dimmed or racial resentment as the country changed around them?

Trump’s ability to hold onto those voters in his losing reelection bid ensures the debate will continue.

Kolko’s findings offer early evidence that the president drew critical support from voters fearing for their job security.

His analysis, based on how the presidential candidates performed at the county level, controlled for population shifts already underway that would indicate a partisan drift. He found a “positive and statistically significant relationship” between areas with a higher share of jobs at risk of automation and a stronger-than-expected swing to Trump since the last election.

The link doesn’t prove a causal relationship, Kolko cautions. But it suggests at a minimum that areas with more replaceable jobs “line up with perceptions about how people perceive their future economic prospects.”

This graphic, which accompanied a piece Kolko wrote Wednesday for the New York Times, illustrates the phenomenon:

His broader conclusion — that the presidential contest revealed a country increasingly riven between more urban, more diverse, better-educated, faster-growing areas and their rural mirror images — tracks with that of other post-election analyses.

The counties that Biden carried saw faster business and wage growth over the last two years before the pandemic hit, for example, according to an analysis by the Economic Innovation Group. A Brookings Institution study reached a similar conclusion, finding Biden-won counties are responsible for a staggering 70 percent of the nation’s economic output, higher than the 64 percent share claimed by counties that backed Hillary Clinton in 2016.

The 2020 map “continues to reflect a striking split between the large, dense, metropolitan counties that voted Democratic and the mostly exurban, small-town, or rural counties that voted Republican,” Brooking scholars led by Mark Muro write. “Blue and red America reflect two very different economies: one oriented to diverse, often college-educated workers in professional and digital services occupations, and the other whiter, less-educated, and more dependent on ‘traditional’ industries.”

They write that “Republicans represent an economic base situated in the nation’s struggling small towns and rural areas. Prosperity there remains out of reach for many, and the party sees no reason to consider the priorities and needs of the nation’s metropolitan centers. That is not a scenario for economic consensus or achievement.”

In other words, Trump performed better in areas experiencing continued economic decline. 

And Biden was able to recapture the Midwestern battlegrounds of Michigan, Pennsylvania and Wisconsin even though he didn’t win back constituencies hardest hit by the ongoing hollowing out of the industrial manufacturing base there.

We got this wrong before the election, writing Biden was poised to recapture those states precisely because Trump hadn’t delivered an economic revival to his backers there, not in spite of that. Around Detroit, for example, Macomb Country — whiter, more blue-collar, less educated, and more slowly growing — was the lone county in the metro region to back Trump, though by a smaller margin than in 2016.

“At the end of the day, it’s clear that the current president continues to derive most of his support from the losing side of economic change,” says Kenan Fikri, EIG’s director of research and policy development.

And that may make more sense that it initially appears. “Areas firmly supporting Trump have good reason to be wary of the future, because they’re not winning in the present,” Fikri says. “Those in Blue America are comfortable with where the country is headed because they’re already living on that trajectory and thriving.”

The transition

Ron Klain will be Biden’s chief of staff.

The president-elect picked a longtime loyalist for the powerful job: “Klain, 59, has been a senior adviser to Democratic presidents, vice presidents, candidates and senators. His appointment marks a homecoming of sorts, since Klain served in the late 1980s as a top aide to Biden when he was chairman of the Senate Judiciary Committee and ran Biden’s office when he first became vice president,” Michael Scherer reports.

Choosing Klain reflects Biden’s plan to move beyond that chaos-driven presidency. The internal White House structure probably will revert to form, with a single manager in charge surrounded by senior officials who also have direct relationships with the president.”

  • Biden’s team is powering through Trump’s blockcade: “Biden has tapped a vast network of allies with extensive government experience and relationships to spearhead a transition of power carefully calibrated to work around the Trump administration’s unprecedented efforts to obstruct a smooth changeover,” Sean Sullivan, Lisa Rein, John Hudson and Laura Meckler report.
  • Biden forms coronavirus transition team. The group is “dedicated to coordinating the coronavirus response across the government,” Politico’s Adam Cancryn reports. It “consists of dozens of transition officials and cuts across a slew of federal agencies, in a sign of the comprehensive approach that Biden is planning to take toward combating the worsening pandemic.”
  • Biden grants waivers to lobbyists to serve on transition. “At least 40 people serving on President-elect Joe Biden’s transition team are or were once registered lobbyists,” an analysis by the WSJ’s Chad Day and Andrew Restuccia found. Five registered as lobbyists in the last year, all for labor unions. The rest were registered earlier and don’t need special permission to serve.
  • Sen. Elizabeth Warren unveils her “Day 1” wish list: The Massachusetts Democrat called for canceling billions of dollars in student loan debt; lowering drug prices by “bypassing” patents; issuing covid-19 workplace safety standards; and raising the minimum wage for federal contractors, among other moves in a Post op-ed. (She’s also sharpening her confrontation with the Business Roundtable over its CEOs’ commitment to climate change.)
  • Biden’s plan for China’s tech ventures: “Containing China’s technological clout has been a pillar of Trump’s tech policy — and one area where there is little evident division with his successor. As a candidate, Biden said he would invest in bolstering American technology and work with allies to confront Beijing on trade, two initiatives industry officials are banking on,” the WSJ’s Stu Woo and Asa Fitch report.

Market movers

Wall Street is not concerned about Trump overturning the election.

Traders are taking a similar approach as Biden: “Ahead of the election, analysts had said a key risk to financial market stability was the possibility that Trump would contest the result if he lost, or refuse to leave office,” Reuters’s David Randall reports.

“Still, even as that scenario has been playing out, the benchmark S&P 500 stock index is up approximately 6 percent since Election Day. Sectors that were expected to outperform under Biden are surging, such as cannabis stocks and clean energy. Private prison stocks have dropped by 8 percent or more, reflecting Biden’s proposal to end federal use of private facilities.”

Stocks divert again, but this time tech has its day: “The S&P 500 and Nasdaq Composite rose on Wednesday as tech shares recovered some of their losses from earlier in the week at the expense of names who would benefit from an economic recovery,” CNBC’s Fred Imbert and Maggie Fitzgerald report.

“The broader-market index closed 0.8 percent higher at 3,572.66 and the Nasdaq jumped 2 percent to 11,786.43. The Dow Jones Industrial Average — which had been the stalwart early this week — struggled, falling 23.29 points, or 0.1 percent, to 29,397.63.”

  • The winners: “Apple gained 3 percent. Netflix climbed 2.2 percent. Facebook and Amazon rose 1.5 percent and 3.4 percent, respectively. Alphabet closed 0.6 percent higher, and Microsoft was up by 2.6 percent.” (Amazon CEO Jeff Bezos owns The Washington Post.)
  • The losers: “American Express fell 4.2 percent to lead the Dow lower. Boeing and Disney both lost at least 3 percent.”

That’s (still) gold, Jerry!: “Gold prices tumbled on Monday after the Pfizer-BioNTech coronavirus vaccine news sparked a broader market rally. Investors fled safe haven assets like gold, which had surged on worries about the pandemic. But the price of the gold is still hovering just under $1,900 an ounce — not far from all-time highs above $2,000 earlier this year,” CNN Business’s Paul R. La Monica reports.

“While gold has been volatile, it has benefited from many of the same trends that have lifted bitcoin as well as silver, platinum and other precious metals the past few months. And many analysts are confident gold will just keep on climbing.” 

Coronavirus fallout

More from the U.S.:
  • U.S. records more than 145,000 new cases today, the latest all-time high: “Nearly every metric is trending in the wrong direction, prompting states to add new restrictions and hospitals to prepare for a potentially dark future … The number of patients hospitalized nationally with covid-19 — more than 64,000 as of Wednesday — is near the peak of the first wave in the spring,” Darryl Fears, Joel Achenbach and Brittney Martin report.
  • Moderna expects to know whether its vaccine works by the end of the month. “In order for Moderna’s vaccine to be considered for authorization by the US Food and Drug Administration, at least 53 study participants needed to become ill with Covid-19. The trial hit that 53 mark Wednesday, but Moderna doesn’t know if the participants who became ill received the vaccine or the placebo,” CNN’s Elizabeth Cohen and Lauren Mascarenhas report
  • New York to impose curfews: “Restaurants and bars licensed by the State Liquor Authority will be ordered to close at 10 p.m. beginning Friday, though they can operate for curbside pickup past that time, Gov. Andrew Cuomo (D) said on a call with reporters. Gyms will also be forced to close at that time,” CNBC’s Noah Higgins-Dunn reports.
  • White House outbreaks persist: “Three more White House staffers have tested positive for the coronavirus, bringing the latest outbreak among [Trump’s] aides and advisers to 12 people,” the New York Times’s Amy Schoenfeld Walker and Matthew Conlen report.
From the corporate front:
  • Pfizer CEO sold $5.6 million of stock as company announced vaccine data: “Albert Bourla sold 132,508 shares at an average price of $41.94 per share, or nearly $5.6 million, according to a securities filing. The sale was part of a pre-scheduled 10b5-1 trading plan, which was adopted on Aug. 19, the filing shows, as the company was enrolling participants in its late-stage trial,” CNBC’s Will Feuer and Nick Wells report. It’s unclear when Bourla found out about the vaccine data.
  • Chipotle leans into its first digital-only restaurant: “With online orders booming during the pandemic, the fast-casual Mexican chain announced that it is rolling out a new restaurant format that exclusively services pickup and deliveries. Chipotle Digital Kitchen is the company’s take on the ‘ghost kitchen’ model — empty of diners and fast on orders — and when it opens this weekend in Highland Falls, N.Y. …,” Taylor Telford reports.

Pocket change

Ant’s backers start to bug out.

Funds are letting investors cash out as the IPO remains uncertain: “Funds that touted access to Ant Group Co.’s blockbuster share sale will let investors cash out early, following a social-media outcry after the financial-technology giant’s listing was abruptly halted by Chinese regulators,” the WSJ’s Xie Yu reports.

“The funds used a marketing blitz to highlight that they could invest up to 10% of their assets in Ant, though this wasn’t written in their contracts with investors, or in fund-sales documents. Many investors were expecting Ant’s shares would surge after the IPO, which at more than $34 billion was set to be the world’s largest ever. Money invested in the funds was to be locked up for 18 months.”

TikTok asks for help as the Trump administration leaves it in limbo: “TikTok has one final, major hurdle to overcome in its battle with the Trump administration over the video app’s future in the U.S. — and the deadline is looming with no clear solution,” Rachel Lerman and Jeanne Whalen report.

“TikTok’s Chinese parent company, ByteDance, is under a presidential order to divest from the app here by Nov. 12 — today. But the deal it proposed, to take on investment from Oracle and Walmart and set up a new company, has yet to receive the green light from the government agency overseeing the negotiations … The video app on Tuesday asked a court to intervene and give it more time to reach a deal with the government, saying in a filing that it wants the divestment order to be vacated.”

Kodak said former executives sold stock options they didn’t have: “Eastman Kodak said five former executives were able to collect millions of dollars by selling stock options they didn’t own, an admission that is set to add to the scrutiny the company faces over the circumstances surrounding a halted U.S. loan,” the WSJ’s Kimberly Chin reports.

“The company faces several investigations by federal agencies over its handling of a planned $765 million loan from a U.S. government agency to produce drug ingredients at its U.S. factories.” 

Chart topper


  • The Labor Department reports the latest weekly jobless claims
  • Quarles and Brooks are set to testify before the House Financial Services Committee
  • Disney, Cisco Systems and Palantir Technologies are among the notable companies expected to report their earnings

The funnies

Bull session

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