Five years ago, Kathleen Blee, a sociologist at the University of Pittsburgh, was interviewing former white supremacists and discovered something unexpected: unprompted, many of her subjects would bring up Donald Trump, who had just embarked on an outsider campaign for the White House.
“It was just striking to me,” recalled Prof Blee, who has been researching racist movements for so long that she interviewed women Ku Klux Klan members from the 1920s for a book on the subject.
Decades of experience taught her that white supremacists tend to abhor electoral politics, which they view as a feature of the corrupt world they wish to overturn. And yet, Prof Blee found, “people were saying sort of cautiously interested things about the Trump campaign”.
It was an early indication of how an extremist movement that had long operated at the margins was coming to view Mr Trump, a wealthy property developer from New York, as a promising bridge into mainstream politics.
Last week’s insurrection at the US Capitol, in which a mob inspired by Mr Trump’s lies about a stolen election ransacked the seat of American democracy, was a stunning declaration of their strength after five years of increasingly brazen displays, from the torchlight march in Charlottesville, Virginia, to the overrunning of the Michigan state capitol.
The insurrectionists at the Capitol were a motley crew. Their ranks included a man waving a Confederate battle flag in the halls of Congress, a QAnon shaman sporting animal horns, anti-government militia members wearing tactical gear, white supremacists and alt-right agitators. Among their dead was Ashli Babbitt, an air force veteran with legal troubles who wrote on Twitter the day before she died: “Nothing will stop us . . . They can try and try and try but the storm is here and it is descending upon DC!”
Conspiracy theories and white supremacy are deeply ingrained in US history and culture. What is unique is how those distinct elements found a unifying beacon in Mr Trump and coalesced into a movement under his administration, according to Peter Simi, a professor at Chapman University, who has sometimes collaborated with Prof Blee.
“That’s one of the things that’s most threatening about his rise to power,” Prof Simi said. “He’s kind of an ink blot of sorts where a lot of these different segments of the far-right — and into the mainstream — are able to project on to him their hopes and fears and anxieties and frustrations.”
The threat posed by such groups has unnerved the nation and prompted extraordinary security precautions for the January 20 inauguration of President-elect Joseph Biden, the man who defeated Mr Trump in the November election. Some 20,000 National Guard troops have been mobilised to protect Washington.
The hope that the fever will break after Mr Trump leaves office may be naive, according to experts. If Trump supporters believe, as many erroneously do, that the election was stolen, and their country is at risk, then they may deem violence not merely a justifiable response but a necessary one, they say.
Meanwhile, the very scale of the Capitol insurrection — which extremists are celebrating online — creates its own energy. “These mass mobilisations are likely to create spin-offs where one or a few people will be further radicalised by their involvement in the insurrection,” Prof Simi predicted. “It really makes them feel part of something bigger than themselves, and then they go out by themselves to try to further the cause.”
Throughout his presidency, Mr Trump has emphasised the threat of violence from Islamist terrorist groups and leftwing “Antifa” radicals. Yet the Department of Homeland Security concluded in October that “racially and ethnically motivated violent extremists — specifically white supremacist extremists” — are the “most persistent and lethal threat in the homeland”.
The Center for Strategic and International Studies, a think-tank, said in a June study that “far-right terrorism has significantly outpaced terrorism from other types of perpetrators”, and that the number of rightwing attacks had “grown significantly in the last six years”.
The CSIS found that rightwing groups accounted for two-thirds of all attacks in 2019 and more than 90 per cent between January 1 and May 8 of 2020. “It’s emphatically true that there has been a rise in the number of rightwing plots and attacks,” said Seth Jones, an author of the report who has advised the FBI.
While rightwing violence has long existed in the US, Prof Blee and other experts see strands linking today’s actors to the self-declared “patriot” militias that came to prominence in the 1990s. Many were motivated by anti-government rancour and staunch opposition to gun control. Some of their ranks were filled by victims of the 1980s farms crisis, which pushed many families into bankruptcy and prompted a search for culprits — bankers, Jews and the federal government, among them.
In April 1995, Timothy McVeigh, a former soldier who had become radicalised by The Turner Diaries, a far-right pulp novel about a post-apocalyptic America that descends into race war, parked a rented truck loaded with fertiliser and diesel fuel in front of the federal building in Oklahoma City. The blast he detonated killed 168 people in the worst act of domestic terrorism on US soil.
The next year a pipe bomb planted at the Atlanta Olympics killed one but might have done worse damage if it had been better orchestrated. It was set by Eric Rudolph, a follower of the white supremacist Christian Identity movement.
After the Oklahoma City bombing, the movement seemed to wane as law enforcement cracked down. The hard core went underground — and online. “White supremacists have been early adopters of technology,” Prof Blee said, from online bulletin boards to encrypted messaging apps.
They gained more latitude to operate after the September 11 attacks as authorities shifted focus to foreign terrorists. Then they staged a resurgence after 2008 brought an epochal financial crisis and the election of Barack Obama, America’s first black president, both of which stirred extremists who believed white people were being “replaced”.
By 2009, the Oath Keepers, a far-right group that focuses its recruitment on former members of the military and the police, had come into being. Other groups, such as The Base, self-consciously mimicked the social media strategies of Islamist extremists to reach broader audiences.
“That’s kind of a turning point where they start to get connected with people who wouldn’t see themselves as extremists but are open to racist appeal,” Prof Blee said. “It’s like the beginning of the connection to electoral politics.”
Daryl Johnson, a counter-terrorism expert at the Department of Homeland Security, had warned on the potential for renewed rightwing violence in an April 2009 report. But its publication provoked a firestorm of criticism from conservatives. Michelle Malkin, a Fox News contributor, called it a “piece of crap”, and John Boehner, then the Republican leader in the House of Representatives, demanded its retraction.
Mr Johnson ended up leaving the DHS and his unit was dismantled. “We now have a huge intelligence gap for the last 10 years as this movement has continued to grow and grow,” he lamented in his 2019 book, Hateland: A Long Hard Look at America’s Extremist Heart.
Mr Trump became important to the movement even before his candidacy as he emerged as a leading proponent of the “birther” conspiracy theory, which falsely held that Mr Obama had not been born in the US and therefore could not be president. While birthers argue their view is not inherently racist, the internet memes it has spawned — of Mr Obama in African garb, carrying a spear, eating watermelon — suggest otherwise.
“He becomes the face of the very worldview that says, ‘Obama’s not our president — he’s not fit to be in the White House’,” Prof Simi said.
Then, when Mr Trump descended the escalator at Trump Tower in June 2015 to declare his candidacy, he called Mexicans rapists and promised to build a wall on the southern border — an idea long championed by David Duke, the prominent Klan leader.
Debating whether Mr Trump and his advisers are full-blown white supremacists or nationalists or merely proponents of a rigid immigration policy is almost beside the point, say scholars.
“Regardless of trying to parse out Trump’s words, white supremacists are very clearly hearing something when they listen to his statements,” Prof Simi said.
In August 2017, eight months after Mr Trump delivered a dystopian inauguration speech declaiming “American carnage”, thousands of white supremacists came together for the Unite the Right rally in Charlottesville, Virginia, that, as a public display of strength and violence, now looks like a precursor to the Capitol insurrection.
Torch-bearing extremists chanted against African-Americans and Jews and vandalised a synagogue. A young woman counter-protester was killed. Prof Blee described it as a “coming-out-of-hiding” — a spectacle “to show that this far-right or white supremacist world really exists and really has power and can command space”.
In the aftermath, Mr Trump condemned bigotry and hatred. But he also declared that there were “very fine people on both sides” at Charlottesville.
That same mish-mash of extremists would re-emerge at heavily armed protests against coronavirus lockdowns in Lansing, Michigan and other state capitols last year. Mr Trump cheered them on from the sidelines, tweeting: “LIBERATE MICHIGAN!”
In October, members of one militia group, the Wolverine Watchmen, were arrested for plotting to kidnap Michigan’s Democratic governor, Gretchen Whitmer, and overthrow the state government. Their members boasted criminal records and loose affiliation with a jumble of racist causes and conspiracy theories.
Joseph Uscinski, a political scientist at the University of Miami who has written extensively on conspiracy theorists, says it is mistaken to try to categorise their adherents as “left” or “right” on the traditional political spectrum. A case in point, he said, is the QAnon conspiracy, which posits that a deep state of Satan-worshipping paedophiles is battling Mr Trump.
“When you talk to these people, their policy views are all over the place. But what unites them is a hatred of the establishment,” he said.
Mr Trump’s role, experts say, was not to create such people but to bring them into a political project. “Their allegiance is to him,” Prof Uscinski explained. “Trump didn’t run and say, ‘I’m a good Republican.’ He said, ‘the entire system is a swamp and I’m going to drain it.’”
Now that they have been allowed into the mainstream, such forces will not be easily pressed back to the margins. Out of office, Mr Trump might continue to push his claims of a stolen election. Many of his tens of millions of supporters may view a President Biden as illegitimate. Some could see him as a legitimate target of violence.
In the meantime, Prof Blee said, an array of white supremacists and far-right extremists were rejoicing online at their ability to make common cause and bring violence to the Capitol.
“Whether they have a retreat back into separate movements or networks, or whether this becomes a really blurry terrain of reinforcing rage — I think we’re going to find out in the next couple months,” she said.
Signs of inflation emerge as Chinese producer prices leap
For investors and governments eager to spot any sign of inflation as the global economy recovers from the coronavirus pandemic, Chinese factories are a good place to look.
The country this week released figures showing that the price of raw materials and goods leaving its factories rose 6.8 per cent year on year in April, its fastest pace of growth in more than three years.
For almost all of 2020, China’s producer price index was in negative territory as Covid-19 suppressed demand. The recent and sudden rise was partly driven by the comparison with a year earlier and, with consumer price rises still below 1 per cent, the overall inflation picture remained mixed.
But the data was nonetheless a sign of pockets of price increases emerging across China’s rapid recovery, where higher overall inflation is expected this year. It also reflected a global rally in commodity prices that has been supported by China’s voracious demand as well as hopes that other big economies will bounce back, too.
“A combination of China and external factors led to this PPI surge,” said Robin Xing, chief China economist at Morgan Stanley. “It’s like a perfect storm.”
China’s PPI index is made up of prices of producer goods, such as wardrobes or washing machines, that factories sell to shops before they are sold on to consumers.
It also includes the prices of raw materials and commodities, such as coal, when they are sold from extraction companies to businesses that use them to make goods.
It was the latter that drove the recent surge in Chinese producer prices. Global commodity prices, which collapsed last year in the early stages of the pandemic, have since rebounded. Iron ore this week hit its highest level on record, while oil prices have recovered sharply from last year.
Xing estimated that 70 per cent of the April PPI increase was driven by commodities. That rally was also tied to China’s recovery, which has been backed by strong industrial growth and a construction boom that led to record output of steel last year.
As such, the data reflected both the pace of China’s recovery as well as a global commodity rally that it helped fuel and now extends beyond it.
For policymakers, one crucial question is whether higher producer prices will feed through to consumer prices. China’s consumer price index was just 0.9 per cent in April — its highest level in seven months, but far from a level that would generate immediate fears of broader inflation within China.
While economists expect a rise in CPI inflation in China this year, they suggested that any reaction from the People’s Bank of China to this week’s data was unlikely. The portion of the producer price index that represents the prices at which businesses buy consumer goods, as opposed to raw materials, was up only 0.3 per cent year on year.
Analysts at HSBC said transmission from PPI to CPI would be “limited”, allowing policymakers to remain “accommodative”.
Ting Lu, chief China economist at Nomura, forecast CPI inflation to rise to 2.8 per cent by the end of the year, with “pass-through” effects from PPI. But he suggested that the PBoC was unlikely to tighten in response to PPI, and that higher raw material prices instead posed a risk to Chinese demand and the wider recovery given controls on credit availability.
“For a typical borrower, $1bn six months ago may be enough to buy steel and cement to finish one project, but today it’s [maybe] not,” he said.
While the PBoC has not increased official rates since lowering them last year, the Chinese government has nonetheless tightened credit conditions over recent months.
It has also taken measures to rein in both its property sector, on concerns that easier money would encourage asset bubbles, and its steel sector, which has churned out the metal at a rate that threatens Beijing’s environmental commitments.
China’s gradual decarbonisation ambitions — and any production cuts they lead to within the country — are seen as constraints on supply, buoying the price of commodities further.
Beyond raw materials, economists are closely watching other shortages. Iris Pang, chief economist for greater China at ING, said producer price inflation would be followed by chip inflation. A shortage of semiconductors, she said, was already beginning to drive price increases for consumer products such as washing machines and laptops.
While the PPI index showed a much weaker increase in consumer goods than for raw materials, on a month-on-month basis there were notable rises. Durable consumer goods were up 0.4 per cent month on month in April, the fastest pace of growth since at least 2011, according to CEIC, a data company.
Apart from domestic construction, part of the demand for raw materials has been to drive the production of goods for export to western countries.
Data on Friday showed Chinese exports leapt 32.3 per cent year on year in April. But even when compared with April 2019, before the pandemic, the rise was about 16 per cent on an annualised basis, Morgan Stanley estimated.
Competition between producers in China meant this did not necessarily imply inflation for consumers overseas. Instead, China’s recent PPI jump hinted at just one of the global effects of western responses to the pandemic.
“If you try to figure out what is the end demand here for this PPI recovery, it is global stimulus,” said Xing. “External demand led to China’s export recovery, [and] now it’s far beyond its potential growth”.
Covid batters India’s aspiring middle classes
When Ram Prakash died after a feverish and breathless week, his wife and 16-year-old daughter’s heartbreak was compounded by fear that the modest middle-class safety net he had knitted together might be ripped apart.
The 53-year-old, a tax adviser to local businesses, was one of the millions who had joined India’s fast-growing middle class in recent decades. Their rising incomes, better education and consumption powered one of the great global economic success stories.
But the calamitous second wave that claimed the life of Ram, the family’s breadwinner, has shattered the Prakashes’ hopes for the future. “Our life was going good but now it’s all over,” said Uma, his widow.
Economists warned that the latest outbreak could have long-term ramifications for middle-class Indians, whose rising consumption was expected to be the country’s growth engine for many years.
“India, at the end of the day, is a consumption story,” said Tanvee Gupta Jain, UBS chief India economist. “If you never recovered from the 2020 wave and then you go into the 2021 wave, then it’s a concern.”
India reported more than 320,000 Covid-19 infections and 3,800 deaths on Monday. Experts maintain that both figures are vastly undercounted.
The disease has heaped suffering on Indians irrespective of background. Yet this time, it has also hit hard an aspirational middle class whose newfound privilege previously helped shield them.
Public-health experts pointed to signs that after widespread infection among the urban poor last year, sectors of society including the comparatively affluent were more vulnerable this time round. This was compounded by the near-collapse of private health services on which they relied.
“You’re affluent but you can’t get a hospital bed. You’re affluent but you can’t get oxygen,” said Saurabh Mukherjea, founder of Marcellus Investment Managers. “That’s deeply disorientating.”
India’s middle class was already severely weakened by the recession that followed last year’s lockdown, even if they were better protected from the virus.
The Pew Research Center found that 32m people fell out of India’s middle class — defined as those earning between $10 and $20 a day — in 2020. That represented more than half of those added to the category since 2011.
India’s economy was expected to roar back before the second wave struck. For middle-class Indians on the brink, such as the Prakash family, this second shock may prove too much.
Ram, the tax consultant, had moved his family to a one-bedroom house in a humble New Delhi neighbourhood, bought a car and sent his daughter to a low-cost private school, hoping she could become a chartered accountant.
“He gave us so much when he was alive,” said Vasundhara, his daughter. “I only hope I will be able to continue my studies.”
Experts have debated what drove the high caseloads among middle class and rich Indians during the second wave.
Anup Malani, a professor at the University of Chicago, suggested that those populations proved more susceptible, especially as new variants spread.
In Mumbai, for example, studies last year found that about 50 per cent of slum residents had Covid-19 antibodies, compared with less than 20 per cent in more affluent surrounding neighbourhoods.
This is believed to have left the middle and upper classes more vulnerable, particularly to severe disease, researchers said. Doctors have reported similar trends elsewhere in India.
“The first wave largely infected poorer populations,” Malani and two co-authors wrote this month. The second wave “is disproportionately composed of individuals who are from non-slums”.
Researchers said more data were needed but other susceptible populations could include those outside cities, such as in poor rural areas with shoddy healthcare where the virus was wreaking havoc.
The outbreak was so sudden that it overwhelmed even India’s best hospitals, including private facilities in cities such as Delhi or Bangalore.
Fewer than 1 per cent of Delhi’s 5,800 Covid-19 ICU beds are available, while crippling shortages of oxygen have contributed to countless deaths.
After Ram Prakash’s oxygen levels dropped, his family spent two frantic days ferrying him to six separate hospitals — both private and public — in a desperate bid to find treatment.
In the end, they brought him home. Ram died on April 27.
Uma and Vasundhara fear economic ruin. They have a shortfall of Rs30,000 ($408) to meet immediate expenses, including school fees and the mortgage on a neighbouring unit that Ram bought as an office.
“Right now our worry is just to survive, to get food and meet our daily expenses. But there won’t be enough,” said Vasundhara.
They plan to sell their car and Uma, a former Sanskrit teacher, wants to find work again. But they worry hopes of a better life are over.
“We had never imagined this could happen to us,” Vasundhara said. “We just can’t get our head around this.”
Reeves promotion underlines Labour shift to centre ground under Starmer
When Sir Keir Starmer promoted Rachel Reeves to shadow chancellor late on Sunday night it emphasised his determination to defy the left of the Labour party and move in a more “centrist” direction after a series of disappointing local election results.
Reeves is unpopular with many “Corbynista” members — supporters of the party’s former hard left leader Jeremy Corbyn — because of comments she made in 2013 when she was shadow work and pensions secretary. That controversial moment saw her promise to be “tougher” than the ruling Tories on benefit costs.
Her role as vice-chair of Labour Friends of Israel is also contentious among many Corbyn supporters who oppose the actions of the Israeli government. And while other MPs agreed to serve on the Labour front bench under the Corbyn leadership in 2015, Reeves was one of a handful who refused to do so.
Starmer first considered making Reeves shadow chancellor when he became leader in April last year — only to drop the idea, fearing that it would prompt a backlash from left-wingers.
Yet it would be wrong to characterise the 42-year-old MP for Leeds West — a former junior chess champion — as a “Blairite” or “rightwinger” even in Labour terms.
During the last parliament she chaired the business select committee, a position she used to interrogate corporate failure by Carillion, the collapsed contractor. She meanwhile struck out as a writer, penning two books about female MPs.
In 2018, she used a speech in London’s East End to call for a new series of wealth taxes to raise more than £20bn a year — shifting the fiscal system from income to property. The then shadow chancellor John McDonnell resisted the idea, amid concerns over a backlash from middle class Labour voters.
Indeed, there was a moment in 2019 when some of Corbyn’s aides — including policy adviser Andrew Fisher — advocated bringing Reeves into the shadow cabinet.
Sharper edge but no shift in strategy
In the short-term her promotion to one of the most important roles in the shadow cabinet may give a sharper edge to Labour’s top team but not necessarily bring a shift in strategy.
That is because the party creates its election manifestos through a drawn-out process called the “national policy forum” over several years.
Starmer has eschewed creating new policies on the hoof in favour of a focus on rebranding, telling voters Labour is “under new management” after the electorally disastrous Corbyn, who lost two general elections in 2017 and 2019 — the latter by the biggest margin in nearly a century.
The opposition leader’s popularity rose last year as he forensically attacked the ruling Conservative government over pandemic failures. But with the Tories enjoying a bounce from the vaccine rollout, he was criticised during the local elections for a lack of a positive policy vision. Some Labour insiders blame that for the setback at the polls — in which the party lost 326 council seats and was defeated in the Hartlepool by-election.
On Monday, many colleagues were positive about the promotion of Reeves after a year in which she has been one of the most high-profile figures on the front bench.
As shadow Cabinet Office minister, she took the fight to the Conservative government over its spending on personal protective equipment — expressing anger at the many contracts given to Tory contacts. She has also kept up the pressure on the Conservatives over the Greensill scandal.
Colleagues said as shadow chancellor she will emphasise the need for Labour to show it can be trusted to run the economy — an area of traditional political weakness for the party.
‘Competent and sensible on the economy’
That would continue the theme set by Dodds, who said in a speech in January — using the word “responsible” 23 times — that Labour would offer “responsible economic, fiscal and monetary policy”. The Starmer team has already distanced itself entirely from Corbyn’s 2019 election manifesto, with £83bn of annual public spending increases.
In an interview with the Financial Times last year Reeves struck a similar tone, saying the party needed to be “competent and sensible” on economic matters.
Yet she is not expected to return the party to the “austerity lite” approach of Ed Balls, shadow chancellor under former leader Ed Miliband, who promised not to increase borrowing even for capital expenditure.
One ally said Reeves could be expected to draw up a “transformative” programme — involving changes to the tax system and the decarbonisation of the economy — while also reassuring the public that Labour would spend people’s taxes wisely.
Starmer’s reshuffle at the weekend was thrown into chaos after allies of Angela Rayner, the deputy leader, leaked she was being demoted from her job as party chair after the local election failures. The ensuing political storm overshadowed some more positive electoral results on Saturday in cities such as Manchester, London and Bristol.
Rayner turned down the job of shadow health secretary and instead took Reeves’s old job as shadow Cabinet Office minister as well as “shadow secretary of state for the future of work”.
On Monday, after a two-hour shadow cabinet meeting, Starmer was seen buying a coffee at Westminster with Rayner in an attempt to put on a public show of unity after a weekend of acrimony.
Starmer’s bungled reshuffle has sown deep discontent among senior Labour MPs. “You can’t understand how angry people are,” said one. Allies of Rayner said she felt a “deep sense of betrayal”.
The reshuffle saw Dodds move to party chair and Alan Campbell promoted to chief whip with the departure of 70-year-old Nick Brown.
Lisa Nandy, shadow foreign secretary and MP for Wigan, told colleagues she was convinced Starmer was planning to sack her and it was only a rearguard action by her supporters that persuaded him to drop the plan.
Nandy warned Starmer that she would quit the Labour front bench, rather than be demoted to another role.
Referring to the plans to demote first Rayner and then Nandy, one Labour MP said: “What genius would think it a good idea to demote not one but two women representing northern seats?”
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