“Europe’s Phantom Political Centre Risks Fueling Populism”.

Writing in the Financial Times, Catherine Fieschi notes that, “In Europe, the idea of the political centre has never been so fashionable. Centrism seems to be the balm of choice to soothe the populist wounds of European democracies.”

However, she sees this as “expedient, rather than ideologically meaningful…

“In part, it is the result of the much-peddled story of the demise of the left-right divide. But mostly, it is the result of political opportunism: a convenient way for parties to tread water as electorates are transformed under the weight of tectonic shifts, be they digital, environmental or geopolitical. As voters adapt, float and flit and as values shift (or not), parties hunker down and wait. What better place to do so than in the non-committal centre?”

Fieschi concludes with a warning: “The paradox is that, in its meaninglessness, this phantom centre may fuel precisely the kind of ersatz consensus that triggered the great populist backlash to begin with.”

In democracies, stable parties of the center left and center right play a critical role, with the former promoting changes to address emerging issues, and the latter ensuring that this change does not happen too quickly, or without due consideration of its potential costs as well benefits.

When they fail to effectively address worsening problems, they open the door to populist radical and reactionary parties of the left and right. That usually doesn’t end well for the country in question, and sometimes the world.

In that sense, today’s apparent dominance of uninspiring centrist parties in Europe has an air of the “phony war” about it

Fieschi’s general point about the dangers faced by centrist parties is born out by the struggles of the Labor Party in the UK and the Republican Party in the US.

In the New Statesman, Tony Blair explain why “Without Total Change, Labour Will Die”, noting the twin threats posed by the radical cultural views of its left wing, and its lack of convincing economic policies in an age of unprecedented technological change and disruption.

In the US, multiple writers have noted how the ouster of Liz Cheney from the House Republican Leadership and Senate Republicans blocking the establishment of an independent commission to investigate the January 6th attack on the US Capitol are painful indicators of a party still in thrall to Donald Trump, who is unwilling to let it move on without him.

In the Financial Times, Martin Wolf claimed that as a result, “the Republicans are no longer a normal democratic party. They are increasingly an anti-democratic cult with a would-be despot as their leader” (“The Struggle For The Survival Of US Democracy”).

In his weekly letter, Andrew Sullivan noted, that Trump’s “unappeasable vanity, the GOP is flubbing one of its biggest political opportunities in years: to craft redistributionist policies for the mass of working Americans, and to defend the legacy of the West, its values and traditions, against the most radical left assault since the late 1960s.”

Moreover, the Republicans are in the process of potentially scoring an own-goal at the state level, where they are attempting to put in place radical changes to election laws that seem intended to disenfranchise likely Democratic voters.

In their recent public “Statement of Concern”, a large number of prominent scholars of democracy warned that, “we have watched with deep concern as Republican-led state legislatures across the country have in recent months proposed or implemented what we consider radical changes to core electoral procedures in response to unproven and intentionally destructive allegations of a stolen election.

“Collectively, these initiatives are transforming several states into political systems that no longer meet the minimum conditions for free and fair elections. Hence, our entire democracy is now at risk.

“When democracy breaks down, it typically takes many years, often decades, to reverse the downward spiral. In the process, violence and corruption typically flourish, and talent and wealth flee to more stable countries, undermining national prosperity. It is not just our venerated institutions and norms that are at risk—it is our future national standing, strength, and ability to compete globally.”

Tony Blair’s analysis highlights that the struggles within center left and center right parties (or growing tensions on the fault lines within them) is broader than what is happening in the United States.

Both Joe Biden’s fight to contain the progressive left and Republicans’ struggles to break free of Donald Trump highlight how this broader phenomenon is playing out politically in the United States (George Packer described the broader social context in which these conflicts are occurring).

The Statement of Concern scholars of democracy is undoubtedly right about the long-term threat posed by Republican attempts to constrain voting rights (they don’t mention the opposite threat posed by Democratic attempts to expand them to much, e.g., through same day registration, lowered voting ages, and reduced voter identification requirements).

However the more immediate threat is how the continued intensification of political polarization and partisan battles may affect decision making in Beijing with respect to risking a war with the United States over Taiwan.

“Do External Threats Unite or Divide? Security Crises, Rivalries, and Polarization in American Foreign Policy”, by Rachel Myrick

SURPRISE

“A common explanation for the increasing polarization in contemporary American foreign policy is the absence of external threat.

Myrick identifies "two mechanisms through which threats could reduce polarization: by revealing information about an adversary that elicits a bipartisan response from policymakers (information mechanism) and by heightening the salience of national relative to partisan identity (identity mechanism)."

Myrick finds “that the external threat hypothesis has limited ability to explain either polarization in US foreign policy or affective polarization among the American public. Instead, responses to external threats reflect the domestic political environment in which they are introduced.

“These findings cast doubt on predictions that new foreign threats will inherently create partisan unity.”

That is not good news.

“The Populist-Burkean Dimension in US Public Opinion” by Shakeel and Peterson

SURPRISE

The authors explore a critical question in US politics today: What is the relationship between voters’ populist beliefs and how they self-identify on the conservative to liberal spectrum.

After reviewing the research on populism, they use voters’ degree of agreement or disagreement with the following statements to determine the extent of their populist orientation:

“Q1 Elected officials should always follow the will of the people.

Q2 The people, not the elected officials, should make our most important policy decisions.

Q3 I would rather be represented by an ordinary citizen than by an experienced elected official.

Q4 The political differences between the people and the elected officials are larger than the differences among the people.

Q5 Elected officials talk too much and take too little action.

Q6 Elected officials always end up agreeing when it comes to protecting their privileges.”

The authors call voters who disagree with these statements “Burkeans”, after the British philosopher and politician Edmond Burke. In broad terms, the distinction they make is between two conceptions of the proper role of elected representatives.

Populists believe they should be “delegates”, and represent the voters’ views. Burkeans believe they should be “trustees”, who voters expect to autonomously exercise their own good judgment.

The authors conclude that “populism is not a mere recapitulation of conservatism”, noting that the correlation between the sample’s scores on the populism and conservatism scales is just .15. The populism score also has just a .12 correlation with respondent’s party identification. The populist orientation can be found among both conservatives and liberals, as well as Republicans and Democrats.

Interestingly, Hispanic Americans have higher average populism scores than either African American or White Americans.

Beneath the polls showing broad public support for President Biden’s economic stimulus initiatives, a growing number of articles are detailing the increasingly bitter civil wars under way in US Democratic and Republican Parties.

For example, in “Race and the Coming Liberal Crackup”, the New York Times’ Bret Stephens, notes that. “Morally and philosophically, liberalism believes in individual autonomy, which entails a concept of personal responsibility. The current model of anti-racism scoffs at this: It divides the world into racial identities, which in turn are governed by systems of privilege and powerlessness.

“Liberalism believes in process: A trial or contest is fair if standards are consistent and rules are equitable, irrespective of outcome. Anti-racism is determined to make a process achieve a desired outcome.

“Liberalism finds appeals to racial favoritism inherently suspect, even offensive. Anti-racism welcomes such favoritism, provided it’s in the name of righting past wrongs.

“Above all, liberalism believes that truth tends to be many-shaded and complex. Anti-racism is a great simplifier. Good and evil. Black and white. This is where the anti-racism narrative will profoundly alienate liberal-minded America, even as it entrenches itself in schools, universities, corporations and other institutions of American life…

“The idea that white skin automatically confers “privilege” in America is a strange concept to millions of working-class whites who have endured generations of poverty while missing out on the benefits of the past 50 years of affirmative action programs.

“Similarly, the idea that past discrimination or even present-day inequality justifies explicit racial preferences in government policy is an affront to liberal values, and will become only more so as the practices become more common…

Stephens forecasts that the ultimate result of these contractions “will be a liberal crackup similar to the one in the late 1960s that broke liberalism as America’s dominant political force for a generation.”

The Republican Party is also beset by factional struggles, which can be divided into two broad groups. The first are those that have long existed – e.g., between big business internationalists, “Main Street” economic conservatives, and western libertarians; between various foreign and defense policy factions; and between social conservatives and some of these other groups.

The second one, which grabs most of the headlines today, is between “Trumpists” (which YouGov polling found are about 40% of voters who identify themselves as Republicans) and the fractious groups that make up the “traditional” Republican party.

To simplify, Democrats today remain united in support for Biden’s economic initiatives, which poll strongly with American voters, while below the surface tensions are building along cultural (and to a lesser extend foreign and defense policy) fault lines within the party.

In contrast, Republicans are united on growing focus on fighting woke cancel culture (and increasingly critical race theory), which polls strongly with American voters, while beneath the surface tensions are building along economic fault lines within the party.

In a parliamentary system, these tensions would very likely produce four parties (far and center left, and far and center right) who would have to negotiate party platforms and alliance to form a government. But with its presidential system, that is unlikely to happen in the United States. In the short-term, it seems clear that with Biden’s economic stimulus the Democrats are riding the stronger host.

Whether that will enable the party to retain the House and Senate in 2022 remains to be seen.

In the US, the potential size of the US immigration crisis is summed up in the headline from a new Gallup poll of people in Latin America and the Caribbean: “42 Million Want to Migrate to the US.”

As Gallup CEO Jim Clifton bluntly states, “Here are questions every leader should be able to answer regardless of their politics: How many more people are coming to the southern border? And what is the plan? ... 330 million U.S. citizens are wondering. So are 42 million Latin Americans.”

“How Democrats Became Stuck on Immigration”, by Alex Samuels

“In 2019 when more than two dozen Democrats were vying for the party’s presidential nomination, they all seemed to agree on one thing: They opposed former President Donald Trump’s draconian immigration policies

“Beyond that, though, it got messy. One camp of more progressive Democrats, helmed by former San Antonio mayor and housing secretary Julián Castro, advocated for repealing a law that makes unauthorized border crossings a crime

“Other candidates expressed unease with the idea, raising concerns about what that would mean for human traffickers or drug smugglers crossing the border.

“But the fact that Democratic presidential candidates were discussing decriminalizing border crossings still represented a significant break.

“Over the years, Democrats have moved to the left on immigration, and Democratic voters now hold more progressive views on immigration than both their Republican equivalents and one-time Democratic Party leaders like former President Barack Obama.

“But as the 2019 presidential primary debate shows, there’s still a lot of debate in the party on just how far left to go…

“Members of the progressive wing, meanwhile, do want a more humanitarian-based immigration system focused less on border enforcement. Many want to abolish or dramatically restructure U.S. Immigration and Customs Enforcement — a rallying cry that became popular among some Democrats amid some of Trump’s most stringent immigration policies —and they want the federal government to stop deporting immigrants. They also want to broaden immigrants’ access to social safety net programs.”

“Biden’s Muddle on Immigration” in The Economist

“A crisis is rapidly building on the southern border with Mexico, as hundreds of thousands of migrants seek entry into the United States, fuelled by the hope that the new president will be more welcoming than his predecessor was.

“In January and February the number of unaccompanied minors apprehended along the border started to surge above previous peaks. Illegal border crossings in general are soaring, amid predictions that this year they may be the highest for two decades…

“For Mr Biden this poses a threat. Immigration, for years the most polarising issue in American politics and one that has become ever harder to solve, could soon dominate the agenda.

“To the president’s right, Republicans are on the rampage. To his left, meanwhile, progressive Democrats are out of step with wider American opinion, championing impractical demands (such as stopping deportations) while labour unions oppose sensible policies such as issuing more work visas.

“Mr Biden may want to avoid a confrontation with progressives, whose support he needs for other legislation. Yet he finds himself in a bind that could yet cost his party control of Congress in the mid-term elections next year.”

“Vested Interests in a Time of Crisis” by Terry Moe

Terry Moe has written a very cogent essay about how (as predicted years ago by Mancur Olson in The Rise and Decline of Nations) powerful vested interests can block critically important collective responses to a crisis.

“All government institutions across all areas of public policy inevitably generate vested interests. This happens because they supply certain people and groups with highly valued benefits, including the public services these institutions provide but also the government jobs they fund, the contracts they enter into, and more.

“The beneficiaries then have incentives to try to organize and invest in political power to protect their benefits and the institutions providing them.

“Mass constituencies — the vested interests that are the usual recipients of public services — face daunting collective-action problems and often can’t become organized and powerful. But concentrated interests with large material stakes typically can. And they do.

“The power of vested interests is legendary. Not surprisingly, they typically oppose efforts at major reform because they see them as threatening to their benefits. They do that, moreover, even if the institutions are performing poorly and desperately need to be reformed for the good of society.

“This willingness to defend failing institutions applies with special force when vested interests arise from jobs or profits —interests represented by unions and businesses, respectively — because such groups can continue to hold onto their jobs and profits as long as the institutions, however abysmal their performance, simply survive and continue to obtain funding…

Moe uses police and teachers unions as examples of vested interests that have stymied reform, even in the face of powerful forces like the killing of George Floyd and in some areas the extended closure of schools during the pandemic.

Moe’s conclusion is grim: “Why are the prospects for reform so grim, even in the face of disasters and social shocks that might seem so liberating?

“The answer is that, while the coronavirus pandemic and the unrest in the wake of George Floyd’s death have opened up possibilities for reform, the disasters have left a crucial box unchecked: They have failed to undermine the power of the vested interests, leaving them just as dominant as they were before 2020. As a result, police unions will continue to make reforms of police departments exceedingly difficult, and teachers’ unions will continue to stand in the way of education reform…

“The problem of better government is a problem of power — and it can’t be solved unless we see it for what it is.”

“Many in US, Western Europe Say Their Political System Needs Major Reform”, by Pew Research

SURPRISE

“A four-nation Pew Research Center survey conducted in November and December of 2020 finds that roughly two thirds of adults in France and the U.S., as well as about half in the United Kingdom, believe their political system needs major changes or needs to be completely reformed. Calls for significant reform are less common in Germany, where about four-in-ten express this view…

“Some of the frustrations people feel about their political systems are tied to their opinions about political elites.

In the U.S., concerns about political corruption are especially widespread, with two-in-three Americans agreeing the phrase “most politicians are corrupt” describes country well. Nearly half say the same in France and the UK. Young people, in particular, generally tend to see politicians as corrupt. And those who say most politicians are corrupt are much more likely to think their political systems need serious reform.

“How Much Longer Can This Era of Political Gridlock Last?” by Lee Drutman

Confidence in prediction increases when you combine forecasts of the same question that are based on different methodologies and/or information.

Drutman reaches similar conclusions to the ones we reported last month in our analysis of the threat posed by declining political legitimacy.

“Democrats may have a narrow majority in both the House and the Senate for the next two years, but it’s nothing near the margin they hoped for. And the likelihood that Democrats keep both the House and the Senate in 2022 is low, as the president’s party almost always loses seats in the midterm elections.

“That means more divided government is probably imminent, and the electoral pattern we’ve become all too familiar with — a pendulum swinging back and forth between unified control of government and divided government — is doomed to repeat, with increasingly dangerous consequences for our democracy.

“It’s part of our long era of partisan stalemate. The question, of course, is how much longer can this last? And is there any resolution in sight?” …

“Certainly, one can cast about for issues that could conceivably split one or both of the two major parties and cause a massive political realignment. Economics is arguably once again such an issue, given that the Republican Party’s voters are internally split over economic issues, with many of the more populist voters in the party rejecting the party’s established pro-business, pro-free trade agenda in favor of something more redistributionist.

“But the sticking point here seems to be that whatever latent class solidarity might exist among voters across parties, issues of race and racial identity have become so core to partisan affiliation that any potential cross-party coalition along lines of class seems unlikely…

“It’s possible that voters today are fed up with the two parties, with rising support for a third party and a growing number identifying as independent. But the problem is that independents do not represent a coherent voting bloc capable of forming a third party…

“Today, the factors locking in continued closely-balanced hyper-partisan politics are much stronger [than in the past]. And absent a major change to the rules of our elections, no realignment lies in sight. Instead, deepening partisan trench warfare will only worsen fights over the basic rules of voting, undermining the shared legitimacy of elections on which democracy depends.”

On February 13th Donald Trump was acquitted in his second impeachment trial, this time for inciting the January 6th attack on the US Capitol.

While some Republicans voted with Democrats, the final tally fell well short of the Senate 67 votes needed to convict.
In the end, most Republican Senators chose to avoid offending their base, thus reinforcing Lee Drutman’s points in the note above.

“Why Did Republicans Outperform the Polls Again? Two Theories”, by Emily Ekins

SURPRISE

“1) Republicans are losing confidence in institutions, and Trump accelerated this distrust.
Long before Trump took office, Republicans were already losing trust in our society and its institutions. But there are now signs that lack of trust could be driving the nonresponse and distrust we see among Republicans in polls and pollsters more generally”…

“2) Republicans may be more likely to opt out of election polls because they increasingly fear retribution for their views…

“A Cato Institute/YouGov survey in July found, for instance, that 62 percent of Americans have political views they are afraid to share given the current political climate. Republicans were overwhelmingly likely to say they self-censored their political opinions (77 percent) compared with Democrats (52 percent).

“Not only were many Republicans afraid to express their political opinions, but those with more education were also more likely than Democrats to say they feared getting fired or missing out on job opportunities if their opinions became known.”

“The Cost Of Populism: Evidence From History”, by Funke et al

“The rise of populism in the past two decades has motivated much work on its drivers, but less is known about its economic and political consequences. This column uses a comprehensive database on populism covering 60 countries, dating back to 1900 to offer a historical, long-run perspective” …

“We define a leader as populist if he or she places the alleged struggle of the people (‘us’) against the elites (‘them’) at the centre of their political campaign and governing style” …

The authors find that, “(1) populism has a long history and is serial in nature – if countries have been governed by a populist once, they are much more likely to see another populist coming to office in the future; (2) populist leadership is economically costly, with a notable long-run decline in consumption and output; and (3) populism is politically disruptive, fostering instability and institutional decay.”

“A Dangerous Normalisation Of Unprecedentedness”, by Peter Atwater in the Financial Times

With pith and wit, Atwater makes some critical points:

“Over the past few years, we’ve grown so accustomed to being shocked that we’re no longer surprised when it happens. An event or a behaviour is described as unprecedented, and we don’t even blink any more…

“In comparable times in American history, we’ve turned to our biggest institutions, church and state, for comfort and strength — to bring us and hold us together.

“Today, our biggest institutions seem fragile and unwieldy. Like the power grid now under stress across the southeast, none seems strong enough to handle the mounting load…

“What main street needs isn’t just money, but a greater sense of certainty in what is ahead. And today there is no one offering a compelling and unifying vision of the future offering hope.”

The latest IPSOS poll in the UK showed the Conservative Party up 12 points over Labor among workers, up 26 points outside of London and the South, up 41 points among senior citizens, and up 43 among those who voted for Brexit.

In contrast, Labor is up 28 among those who voted to remain in the EU (i.e., against Brexit), up 27 in London and the South, up 46 among voters aged 18-24, but up only 2 among middle class voters.

This poll highlights a political alignment underway in the UK, which may be a signal of what is to come in other countries.
A key uncertainty is whether the Conservative Party can develop and sustain economic and social policies that appeal to the working class, many of whom are made uncomfortable by Labor’s increasingly progressive stands on many social and cultural issues.

At the same time, Labor Leader Keir Starmer is struggling to come up with a policy platform and message platform that is significantly different from the Conservatives’ but (as former leader Jeremy Corbyn proved) not so radically different that it guarantees electoral defeat.

In the US, both major parties will continue to struggle with intensifying intraparty conflicts.

The Democrats face the challenge of balancing Progressives versus Traditional Democrats. This will not be easy; for example, a progressive Political Action Committee has already announced it will seek candidates who can challenge moderate Democratic Senators Joe Manchin (West Virginia) and Kyrsten Sinema (Arizona) in their next primary elections.

The Republicans face a much bigger challenge, sorting through the wreckage of the past four years and trying to create new party policies and messages that are electorally viable. It remains to be seen what will emerge from this civil war (or circular firing squad) between multiple factions (e.g., right populists, business conservatives, social conservatives, and national security conservatives – all of which are themselves rent by factional infighting). And that requires a feature article, as it can’t be adequately analyzed here in the Evidence Notes.

Biden’s fundamental goal is to retain the Democratic Party’s control of the US House and Senate in the 2022 elections, and avoid Obama’s fate when he lost them both just two years into his first term.

His strategy for retaining control of Congress while keeping the Progressive vs. Traditional Democrat civil war under control appears to be (1) make early policy changes that satisfy some progressive demands; (2) hope that the negative reaction to these from Republicans will, by 2022, be offset by a successful vaccination program that brings COVID under control, and a strong economic recovery due to his large stimulus package.

As noted earlier in this Evidence File, both of these involve considerable uncertainty. Based on our calculations above, they are at best a 50/50 bet (the 70% probability that none of our seven potential crises occur in any one year, squared).

“Clarifying the Structure and Nature of Left-Wing Authoritarianism”, by Costello et al

SURPRISE

“Authoritarianism has been the subject of scientific inquiry for nearly a century, yet the vast majority of authoritarianism research has focused on right-wing authoritarianism (RWA)… We investigate the nature, structure, and network of left-wing authoritarianism (LWA)…

“Our results point to the fruitfulness of a tripartite conceptualization of LWA comprising three correlated dimensions—revolutionary aggression, top-down censorship, and anticonventionalism…

“Revolutionary aggression reflects motivations to forcefully overthrow the established hierarchy and punish those in power… In the personality domain, revolutionary aggression is characterized by low agreeableness, low honesty-humility, low conscientiousness, and psychopathic disinhibition and meanness…

“Top-down censorship reflects motivations to wield group authority (e.g., governmental limitations on speech) as a means of regulating characteristically right-wing beliefs and behaviors, mirroring RWA’s definitional core…

“Anti-conventionalism, the final LWA dimension, reflects a moral absolutism concerning progressive values and concomitant dismissal of conservatives as inherently immoral, an intolerant desire for coercively imposing left-wing beliefs and values on others, and a need for social and ideological homogeneity in one’s environment” …

“By and large, LWA and RWA seem to reflect a shared constellation of traits that might be considered the “heart” of authoritarianism. These traits include preference for social uniformity, prejudice towards different others, willingness to wield group authority to coerce behavior, cognitive rigidity, aggression and punitiveness towards perceived enemies, outsized concern for hierarchy, and moral absolutism.”

After months of telling his supporters that the election was going to be stolen, and then claiming it was after he lost, on 6Jan21 Donald Trump urged his followers to come to a rally in Washington to protest.

There he gave a speech that many claimed incited them to march to the Capitol, where they violently overcame relatively light police protection and entered the building intent on disrupting the Congressional certification of the Electoral College’s results, which would formally make Joe Biden the next president.

Less than a week later, Trump was impeached for the second time on the charge of inciting insurrection. Unlike Trump’s first bill of impeachment, this time a number House Republicans voted for it.

SUPRRISE

Much has and will be written about how the United States got to this point, and what the consequences will be going forward.

From a political perspective, our initial reaction is that, assuming the populist right is discredited by the sacking of the Capitol, this will likely strengthen the political center (i.e., moderate left traditional Democrats and moderate right Republicans) and enable it to more easily resist pressure from both populist extremes.

Earlier on 6Jan, final results showed that Democrats had picked up both Senate seats in Georgia’s runoff election. The US Senate will now be evenly balanced between Democrats and Republicans, with Vice President Kamala Harris having the tie-breaking vote.

SURPRISE

While not stated in the US Constitution (and still subject to a court challenge), the Senate’s filibuster rule requires a supermajority of 60 Senators to end debate on a bill, and move it to a vote. This would require 10 Republicans to side with the Democrats, assuming all 50 support a bill.

Whether there are 10 votes remains to be seen.
However, the result of the Georgia election will not give control of the Senate agenda to Democrats, but will also strengthen the relative power of Senate centrists, assuming the filibuster rule remains.

On balance, this is a positive development, previous uses of unilateral presidential power (i.e., executive orders) to implement controversial policy changes (e.g., Obamacare) rather than bipartisan legislation (e.g., Civil Rights reforms) has had two negative effects.

First, it has increased partisan polarization. Second, it has made US policy more volatile, as with a stroke of a pen a new president can undo substantially more policy than in the past.

“The Five Crises of the American Regime” by Michael Lind

“In the past eight months, two capitol hills have fallen. Two sacking events symbolize the abdication of authority by America’s ruling class, an abdication that has led to what can be described, not without exaggeration, as the slow-motion disintegration of the United States of America in its present form.

“The first occurred on June 8, 2020, when the Seattle police evacuated their East Precinct building in the city's Capitol Hill neighborhood. Left-wing rioters stormed the police headquarters and looted it. For 24 days, Seattle’s government allowed would-be revolutionaries to create an anarchist commune, acting out the fantasy of “abolishing the police” embraced by much of the American left as well as liberals who should have known better.

“This anarchist commune, created in the midst of nationwide protests against the death on May 25 of a Black Minnesotan, George Floyd, in police custody, was the scene of the fatal shootings of two Black men before the police finally shut it down on July 1.

On Jan. 6, 2021, America’s elite abandoned another Capitol Hill to rioters. After President Donald Trump stirred them up in an incendiary address in which he claimed that Joe Biden had stolen the presidency from him, a mob of right-wing radicals broke into the United States Capitol, where the certification of the results of last November’s election results was taking place. Like the leaders of Seattle in June, America’s congressional leaders fled…

“As in Seattle’s Capitol Hill, so in America’s: The forces of legitimate authority and coercive order for a period were nowhere to be seen.
“What is the meaning of these dystopian scenes? Many Democrats claim that Republicans are destroying the republic. Many Republicans claim the reverse. They are both correct…

“The political crisis is the centralization of power in a small number of ambitious elite factions and coteries…
“Neither America’s partisan leaders nor their militant followers are any longer restrained by a common sense of cross-party solidarity and shared American patriotism…

“The leaders of both parties have weaponized anarchic mobs against their rivals … Combine the rise of social anomie with social (actually antisocial) media, and our warring political factions can summon mobs of alienated, mostly young militants anywhere in the country on short notice, overtly like Trump or discreetly from behind the scenes, like Democratic donors and politicians through the local NGOs they fund. The flash mob, originally used for fun, has now been weaponized for street warfare by Democratic and Republican party leaders…

“The rise of unmarried and childless young Americans in their 20s and 30s who can be mobilized by left and right for unrestricted partisan warfare is part of a larger demographic crisis…

“Most of the jobs that the U.S. economy has created for the past few decades have been poorly paying. That isn’t going to change soon…

Remember the predictions in the 1990s that those who lost well-paid unionized jobs in the manufacturing sector would mostly get new, better-paying jobs in the “knowledge economy”? Didn’t work out” …

“In many different societies, at all stages of development, there tends to be a correlation between political violence and the share of the population made up of unemployed or underemployed young men."

Motivated, perhaps, by a growing sense of foreboding, a number of recent analyses and essays have explored the deep roots of the worsening political conflict in the United States and other nations.

“America Is Exceptional In The Nature Of Its Political Divide”, by Pew Research

“Supporters of Biden and Donald Trump believe the differences between them are about more than just politics and policies. A month before the election, roughly eight-in-ten registered voters in both camps said their differences with the other side were about core American values, and roughly nine-in-ten – again in both camps – worried that a victory by the other would lead to “lasting harm” to the United States…

“The U.S. is hardly the only country wrestling with deepening political fissures. Brexit has polarized British politics, the rise of populist parties has disrupted party systems across Europe, and cultural conflict and economic anxieties have intensified old cleavages and created new ones in many advanced democracies.

“America and other advanced economies face many common strains over how opportunity is distributed in a global economy and how our culture adapts to growing diversity in an interconnected world.

“But the 2020 pandemic has revealed how pervasive the divide in American politics is relative to other nations. Over the summer, 76% of Republicans (including independents who lean to the party) felt the U.S. had done a good job dealing with the coronavirus outbreak, compared with just 29% of those who do not identify with the Republican Party. This 47% gap was the largest gap found between those who support the governing party and those who do not across 14 nations surveyed.

“Moreover, 77% of Americans said the country was now more divided than before the outbreak, as compared with a median of 47% in the 13 other nations surveyed.”

“America Has Serious Problems. It’s Time to Stop Blaming Them on Trumpism”, by Quillette Magazine

“Quillette is not an American media outlet. Insofar as we’ve offered commentary on Donald Trump and the 2020 election, our editorial focus has been aimed at the social, cultural, technological, and academic factors that lie upstream from electoral politics more generally.

“To the extent our writers embrace any political agenda, they typically have opposed the centrifugal forces that are acting on western democracies—including both crude populism on the Right, and anti-liberal doctrines of race and gender on the Left.

“What we have observed, time and again, is that these two forces feed off each other. And to the extent anything called “Trumpism” actually exists, it will only be nourished by liberals’ insistence that the president’s appeal is rooted solely, or even primarily, in “white supremacy” …

“Astonishingly, Trump earned a larger share of non-white voters than any Republican presidential candidate of the last 60 years. Only a true political cultist could imagine that allof these people are “white supremacists” …

“The main reason Trump lost this election is that his support plummeted markedly—an 18 point drop, if exit polls are to be believed—among white men. All in all, the United States just observed a 16 percent decrease in the racial voting gap, as compared to 2016…

“Trump rose to power on the idea that the “elites” despise the values and concerns of ordinary citizens. Even as his presidency enters its twilight, those same elites seem intent on vindicating his thesis."

“How Late Liberalism Undermines Itself”, by Nick Timothy

“Just as surely as the French Revolution devoured its children, modern-day liberalism is eating itself, and destroying with it all the norms and institutions that help complex societies to mediate differences.

“As liberalism grows illiberal, as it turns its back on pluralism, its universalism gives way to relativism, and its belief in the inevitability of progress is contradicted by live events; its contradictions and failures mount.

“Just like other tired ideologies and struggling regimes, it sinks into a state of conflict with the people it claims to understand and does what declining systems of government always do: it bestows privilege and prizes upon its favorites, while disregarding the suffering and needs of those it does not favor…

“Identity-obsessed liberalism ends up causing tensions and rivalries between the groups it is supposed to support. But this is nothing compared to what it does to attitudes towards the majority group.

Militant identity politics requires continuous evidence not only of disadvantage but discrimination and the oppression of identity-based groups by society in general and white people in particular.

“Discrimination and disparities in the experiences of people from different ethnic backgrounds undoubtedly continue. But we cannot hope to build a tolerant, trusting society capable of overcoming differences in values and interests without customs and institutions that help to forge shared identities and a peaceful common life.

“Militant identity politics attacks these very things. It undermines trust in civic, legal, and democratic institutions. It can be repressive for individuals, who are expected to conform by expressing their views only through the prism of their group identity.

“And it can undermine people’s affiliation with other, vital identities, such as their attachment to their immediate locality, region and nation. The culmination of this cultural liberalism, in Jonathan Haidt’s words, is no longer the politics of our common humanity, but the politics of the common enemy…

“Herein lies the explanation of how liberalism brought about the West’s division, disorder, and decline. Like all other ideologists, liberals are engaged in a rebellion against human nature.

"They want to make the world something it is not, and something it can never be. They want to force people to conform to the expectations of their theories. And they hate the people — and the communities, traditions, and institutions they hold dear — when they fail to conform.

"They are, as Burke said of Rousseau, lovers of their kind, but haters of their kindred. Their liberal utopia, like all utopias, is proving to be unavoidably oppressive. Those who challenge the liberal version of progress are deemed irrational, nefarious, or bigoted. And the wanton destruction of unifying traditions and institutions makes the mediation of clashes in values and interests impossible. The result is social breakdown, violent disorder, and a state that can no longer even keep the peace.”

“Despised: Why the Modern Left Loathes the Working Class”, by Paul Embery

As Henry George notes in his review of this book about UK politics, “In the book’s opening chapter, entitled “The Gathering Storm,” Embery sifts through the rubble of 2019, a blasted landscape of shattered Labour hopes in which the working-class have been cleaved from their old tribal loyalties.

"Given his repeated warnings that something like this would happen, his bitterness is understandable. But his anger is matched by affection for the people and places that made him who he is.

“Of his old home in the London borough of Barking and Dagenham, he writes: “We were rooted. We were parochial. We were among family and friends. People looked out for each other, and there was a tangible social solidarity.”

"Economics isn’t everything, however, because people pursue lives of purpose and meaning as well as economic growth and innovation. Elite “economism” ignores “the reality that most workers didn’t see themselves merely as some kind of stage army in a war against capitalism. They were social and parochial beings for whom a sense of cultural attachment — around such things as tradition, custom, language, and religion — meant much.”

"As such, Embery argues that mass immigration has been profoundly unsettling to a place like Dagenham and its people. In 2001, just over 80 percent of residents in the borough were “white British.” A decade later this was a minority, a phenomenon repeated in cities across the country.

“It wasn’t a sense of race that was violated, Embery argues, but a sense of order. As a result of Labour’s indifference to their own voters’ concerns, these same voters elected the far-Right British National Party to the local council.

“As the full impact of the new global market began to take hold,” he writes, “and as their lives and community were subjected to rapid and unprecedented economic and demographic change, their expressions of anxiety and discontent fell on deaf ears. They soon came to realise that not only was much of the liberal establishment impervious to their plight, it actively despised them.”

“This value clash is epitomised by Labour’s increasing investment in both state-led multiculturalism and progressive identity politics…

“Embery pushes beyond the tired complaints about “wokeness” to attack this pseudoradicalism as the latest solvent on both class and community solidarity.

“Splitting people into mutually exclusive groups defined by immutable characteristics destroys any possibility of class radicalism. Of course, prejudice and bigotry against minorities are reprehensible, but as Embery points out, “The sheer venom that is often directed at people for simply holding a belief that until fairly recently was regarded as the conventional wisdom” is the sign of a new orthodoxy that brooks no ideological heresy.”

“A Loss of Direction and the Rise of Populism”, by Juhasz and Toth

“There are two competing populisms, both of which condemn the prevailing neoliberal order.

“Right-wing populists claim they ventriloquize the concerns of a religious, moral, and hardworking but silent majority. They are perceived by the political center as the primitive ghosts from an unenlightened past.

“Left-wing populists demand more progressive welfare oriented policies, total “equality” and an end to “repression” under the label of democratic socialism. The political center views left wing populism as a mortal danger to the delicate mixed economy.

“These two populisms are engaged in a bitter struggle, and both battle the mainstream moderate Left and Right.

“For many people, this configuration is horrifyingly reminiscent of the fatal internecine struggles of the interwar years. But we are not witnessing a simple resurrection of the radicalization of the interwar years…

“Things are not the same. The slogans of the new populists are reminiscent of the historical Left and the radical Right, but to a large extent they have switched positions. The Left became the voice of the educated progressive urban upper middle classes. The populist Right became radical—if not revolutionary—against the straitjacket of the progressive and secular order…

“Fear, anger, rage, hatred, and fury are turning to wrath, and the demonization of opponents. Political crisis is palpable.”

“Did U.S. Politicians Expect the China Shock?” by Bombardini et al

SURPRISE

Remember those findings about falling trust in institutions from the Social Evidence File? Here’s another example of why they exist.

“In the two decades straddling China's WTO accession, the China Shock, i.e. the rapid trade integration of China in the early 2000's, has had a profound economic impact across U.S. regions.

“Were its consequences unexpected? Did U.S. politicians have imperfect information about the extent of China Shock's repercussions in their district at the time when they voted on China's Normal Trade Relations status? Or did they have accurate expectations, yet placed a relatively low weight on the sub-constituencies that ended up being adversely affected? …

“Overall, U.S. legislators appear to have had accurate information on the China Shock, but did not place substantial weight on its adverse consequences.”

“Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure”, by Autor et al

Whether the legislators fully anticipated the social and political consequences that would flow from the economic effects of the China shock is another question…

The authors of this paper ask, “Has rising import competition contributed to the polarization of US politics?”

“Analyzing multiple measures of political expression and results of congressional and presidential elections spanning the period 2000 through 2016, we find strong though not definitive evidence of an ideological realignment in trade-exposed local labor markets that commences prior to the divisive 2016 US presidential election… trade exposed electoral districts simultaneously exhibit growing ideological polarization in some domains, meaning expanding support for both strong-left and strong-right views, and pure rightward shifts in others.”

As the dust settled after the US election, many beliefs that were previously held with confidence had a nasty confrontation with reality. For some people, this apparently made no difference. But others began to perceive surprising trends that few had anticipated.

One of these trends was the increased percentage of Latinos who voted for Trump. This surprised many observers given that while in 2016 Trump had run as an economic populist, he had governed as a traditional “big business Republican.” This has led some observers to conclude that, as AEI’s Ryan Streeter wrote, “Trumpism Is More About Culture Than Economics.” Put differently, many voters who were economically attracted to Biden’s economic policies still voted for Trump out of revulsion to Progressives’ positions in social issues (e.g., cancel culture, defund the police, etc.). See, for example, “Americans Strongly Dislike PC Culture”, by Uascha Mounk.

This suggests that the critical battleground going forward will be for Latino, and a portion of the white working class.

The Democratic/Progressive coalition’s challenge is to design, enact, and successfully implement economic policies significantly improve their lives, while muzzling the identity politics views of the Progressive left.

In contrast, the challenge for the Republican/Populist coalition is to develop and advocate policies that benefit the working class, while muzzling the racist views of white nationalist right.

Most importantly, both parties face the challenge of overcoming resistance to these changes by their donor class, who tend to have libertarian views (e.g., “I’m liberal socially and conservative economically”) that that are diametrically opposed to those held by a majority of voters, who would like to see more activist economic policies to improve their lives, but oppose the identity politics social views of the Progressive left.

See, for example, “The Future of the Biden and Trump Coalitions”, by Ruy Teixeira, and “The Limits of the Realignment” by Aaron Sibarium.

Joe Biden defeated Donald Trump in the US presidential election. And Trump is challenging Biden’s win. No surprises there. But what was a surprise was the narrowness of Biden’s win.

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While much will be written about this election, at this point I have two observations about what could have produced the surprisingly strong vote for Trump.

The first is the often under-appreciated swing segment of the US electorate.

The 2x2 matrix first proposed by Maddox and Lillie in their 1984 paper “Beyond Liberal and Conservative” is still quite useful. It divides voters along two dimensions, based on their attitude towards social and economic issues.
“Libertarians” are favor low government involvement in both areas. “Liberals” favor more government in the economic realm, and less in the social realm. “Conservatives favor the opposite. And the fourth group favors more government in both areas. This group, sometimes called “communitarians”, sometimes “populists” and sometimes “traditional Democrats”, are the orphans of American politics, with no party clearly representing their interests, and both fighting to win their votes.

In this election, a surprising number of this segment appeared to be more turned off by the social views of Progressives (e.g., see, “The Platform the Democrats are Too Scared to Publish”, by Aaron Sibarium) than they were turned off by Trump’s handling of the pandemic, his personal foibles, or his relative indifference to their economic needs. As Peter Beinart noted in “Why Trump Lost”, “If he’d governed as he ran in 2016, as an economic populist, Trump would likely have been reelected. Instead, he reverted to the same old Republican playbook”.

The second observation was that a significant segment of the Trump vote was likely driven by deeper factors that Martin Gurri has explored in his analyses. In “Character as Politics”, he claims that, “Elite behavior, in brief, is perceived by the public as that of an entitled if not decadent class. Elite rhetoric appears both disdainful and false…The political consequences extend beyond gossip or scandal touching a few individuals to questions about the legitimacy of the democratic system…Protest movements around the world are often driven by contempt for political and business elites…

“Almost by definition, and certainly by intent, populists [like Trump] don’t act or sound like the elites who fill the ranks of professional politicians. “Questions of character, in this context, turn on the pervasive mood of repudiation. When populists are accused of being offensive or unethical, we must keep in mind that their accusers—establishment media and political actors—have already been judged and found guilty by the public.

“For this to change, the elites have to change. Somehow, those at the top have to regain their good character in the eyes of the public. They must discover ways to win respect in the chaotic theater of the web, and they must develop a rhetorical style adapted to the digital age…So far, they appear utterly unwilling to try.”

Whether Joe Biden and the Democratic Party, perhaps with the help of a few centrist Republicans will be up to this challenge remains to be seen.

Control of the US Senate is still up for grabs, and depends on the results of two Georgia runoff elections on January 5th. The current balance is 50-48. If Democrats win both Georgia seats, that split changes to 50/50, with Vice President Kamala Harris the tiebreaker, this would give Democrats control.

Republicans retaining control of the Senate will theoretically limit the influence on policy of the progressive wing of the Democratic Party. However, as both Presidents Obama and Trump have shown, the lack of a legislative majority can, to a surprising extent, be overcome through the aggressive use of Executive Orders.

As a practical matter, this means that the US is evolving towards something approaching a parliamentary system, in which the party winning the White House can use EO’s to implement its platform, which also makes it easier for the next president to repudiate them and implement their own.

Unfortunately, polarized congressional gridlock that leads to rule by Executive Order also weakens the legislative branch of government relative to the judicial and executive branches, and in so doing accelerates the nation’s growing crisis of political legitimacy.

After what the Financial Times’ Ed Luce called “A Bitter Election that Resolves Little”, expect to see more comparisons between today’s US and Weimar Germany.

In “The Weimarization of the American Republic”, Aaron Sibarium gets this theme off to an impressive start, concluding that, “America is not Weimar Germany. But there are troubling historical echoes in our politics today.”

“Though Trump’s America looks nothing like Nazi Germany, it has developed echoes of the Republic from which Nazism arose—echoes that implicate the left no less than the right…

“Weimar had no shortage of radicals; centrists, on the other hand, were a dying breed…

“With few prospects in the existing system, the intellectual class saw little reason to defend it, and had an easy time rationalizing its destruction…Beyond their shared anti-Republicanism, all that the two sides had in common was their contempt for one another…

“What united the right was not a particular political program, but a general sense of grievance against the far left and republican center, distinct groups it would often synonymize. Marxism, modernism, liberalism—these were all shades of the same thing, corruptions of the old order.
“An equal but opposite elision occurred on the left, with the communists calling everyone to their right—including the Social Democrats—fascists, an unfair charge that many leftwing intellectuals nonetheless echoed.”

The result was threefold: “First, it exacerbated Weimar’s crisis of legitimacy…Second, each side came to resemble, and thus to justify, the other’s caricatures… Third, by coding everyone as either a Nazi or a commie, the political culture laid the groundwork for political violence…and because violence had become idologized, there was no non-polarizing way to address it…It became inevitable that one pole would win.”

“How Hatred Came to Dominated American Politics”, by Lee Drutman, and “The Future is Faction” by Teles and Saldin

SURPRISE
These papers explore similar trends to those noted above, but with more of a focus on their political implications.

Like Cox, Drutman begins by describing the sharp decline in “favorable and warm” feelings that people have to “the other political party” between 1979 and 2016, in contrast to relatively unchanged feelings towards their own.

He claims that three trends are at work: “(1) the nationalization of American politics, (2) the sorting of Democrats and Republicans along urban/rural and culturally liberal/conservative lines (cultural values are much more connected to geography than economic values), and (3) the increasingly narrow margins in national elections…which shifted the focus of politics such that Washington became the arbiter of national values.”

Drutman concludes that, “there are two possible ways this ends. The first is the one we all fear – the unwinding of our democracy… The second scenario is a major realignment and/or a collapse of one (or both) of the two major parties, which could reorient American political coalitions and resurrect some of the overlaps of an earlier era.”

Teles and Saldin offer a third possibility: the renewal of party factions, which could create new opportunities for cross-party compromises between their relatively moderate/centrist factions. Clearly, the renewal of factions is already visibly underway in the Democratic Party.

The critical uncertainty is whether a center/right faction can re-emerge in the Republican Party, to compete for party loyalists with the nationalist/populists. A Trump loss in November could make this possible, while also shoring up the traditional Democrat faction against strengthening Democratic Socialist/progressive faction on its left.

On the other hand, a Trump victory would be bad news for both the survival of the center/left Democratic faction and a rebirth of a center/right Republican faction. The end result would very likely be much more extreme and volatile politics in the United States.

In a campaign speech, Donald Trump launched an attack on “critical race theory”, and banned the use of federal funding for “race sensitivity training.”

SURPRISE
Resentment against increasing “political correctness” in speech and behavioral “cancel culture” has been building for many years. However, up until recently, speech restrictions and cancel culture were mostly confined to university campuses and partisans on the more extreme political left.

However, following this summers “Black Lives Matter” protests and riots, they have rapidly spread into many other institutions (e.g., see “Why is Wokeness Winning?” by Andrew Sullivan).

Trump"s very public counterattack has provided a very public signal about the resistance and resentment many feel towards rapid and repressive cultural change. For better or worse, however, coming as it did from the mouth of an unpopular president in the middle of a bitter campaign, its medium-term effects are highly uncertain.

That said, it is very likely to reinforce the increasingly bitter party divisions noted above.

More in Common released interesting survey data on the impact of COVID-19 on people in France, Germany, Italy, Netherlands, Poland, the UK and the US.

Key findings: “Trust in each other has fallen, in some cases by a daunting margin… About half report feeling alone, and many perceive growing levels of division… In every country, majorities fears greater division, political instability, and severe economic depressions…

In the UK, US, France, and Poland, people tend to feel deeply disappointed by their government’s handling of the crisis so far, while Germans and the Dutch feel greater levels of pride… Correspondingly, confidence in the government’s ability to tackle future crises is low everywhere except for Germany and the Netherlands.”

SURPRISE
As I noted in a recent column published on LinkedIn (“COVID, Keynes, and Long-Term Confidence”), the COVID-19 pandemic is likely to be far more damaging to the economy than many currently expect, for a reason that many overlook: The long-term reduction in confidence and rise in uncertainty caused by the poor response of many institutions to the COVID pandemic.

“Welcome to the Turbulent Twenties” by Jack Goldstone.

The author developed Demographic-Structural Theory, to demonstrate “how population changes shift state, elite and popular behavior.” In 2010, Peter Turchin applied this theory in his now famous paper, “Political Instability May Be A Contributor In The Coming Decade”.

He observed that, “quantitative historical analysis reveals that complex human societies are affected by recurrent — and predictable — waves of political instability. In the United States, we have stagnating or declining real wages, a growing gap between rich and poor, overproduction of young graduates with advanced degrees, and exploding public debt. These seemingly disparate social indicators are actually related to each other dynamically. They all experienced turning points during the 1970s. Historically, such developments have served as leading indicators of looming political instability.”

Turchin’s prescient conclusion was, “The next decade is likely to be a period of growing instability in the United States and western Europe” (see also, “The 2010 Structural-Demographic Forecast For The 2010–2020 Decade: A Retrospective Assessment”, by Turchin and Kotoayev).

In his new paper, Goldstone concludes that “worse likely lies ahead.” His logic is as follows:

“Our model is based on the fact that across history, what creates the risk of political instability is the behavior of elites, who all too often react to long-term increases in population by committing three cardinal sins.

“First, faced with a surge of labor that dampens growth in wages and productivity, elites seek to take a larger portion of economic gains for themselves, driving up inequality. Second, facing greater competition for elite wealth and status, they tighten up the path to mobility to favor themselves and their progeny. Third, anxious to hold on to their rising fortunes, they do all they can to resist taxation of their wealth and profits, even if that means starving the government of needed revenues, leading to decaying infrastructure, declining public services and fast-rising government debts.

“Such selfish elites lead the way to revolutions. They create simmering conditions of greater inequality and declining effectiveness of, and respect for, government. But their actions alone are not sufficient.

“Urbanization and greater education are needed to create concentrations of aware and organized groups in the populace who can mobilize and act for change.

“Top leadership matters. Leaders who aim to be inclusive and solve national problems can manage conflicts and defer a crisis.

“However, leaders who seek to benefit from and fan political divisions bring the final crisis closer. Typically, tensions build between elites who back a leader seeking to preserve their privileges and reforming elites who seek to rally popular support for major changes to bring a more open and inclusive social order.

“Each side works to paint the other as a fatal threat to society, creating such deep polarization that little of value can be accomplished, and problems grow worse until a crisis comes along that explodes the fragile social order…

“In short, given the accumulated grievances, anger and distrust fanned for the last two decades, almost any election scenario this fall is likely to lead to popular protests on a scale we have not seen this century. Trump’s claims of millions of fraudulent mail-in ballots and a rigged, unfair election may be playing with fire; but our model shows there is plenty of dangerous tinder piled up, and any spark could generate an inferno.”

SURPRISE
Goldstone and Turchin’s quantitative approach to “big history” is relatively rare (though that is changing as more young scholars follow the same path).

For that reason, as well as its apparent predictive accuracy, for years I have found it very thought provoking.
Goldstone’s latest analysis, and the forecast it makes, highlights the extreme importance of going beyond monetary and fiscal responses to the COVID crisis, and making long overdue structural reforms that will increase productivity and economic growth, and reduce the inequality in the distribution of its benefits.

As Goldstone notes, and as Donald Trump’s presidency has made painfully clear, that requires very talented leadership, particularly in an era of extreme polarization and political parties as near-religious meta-identities.

The stakes are obviously extremely high. The critical uncertainty is whether, if they win in November, Joe Biden and Kamala Harris are up to the challenges they will face at a pivotal moment in history.

More broadly, this uncertainty applies to American elites in general, especially those in charge of the country’s public, private, and not-for-profit institutions (see Martin Gurri’s “The Revolt of the Public and the Crisis of Authority in the New Millennium”, and Ed Luce’s “The Discreet Terror Of The American Bourgeoisie”).

In the Atlantic, Tom McTague wrote about “How the Pandemic Revealed Britain’s National Illness”. Many of his comments could also apply to the United States.

“What emerges is a picture of a country whose systemic weaknesses were exposed with appalling brutality, a country that believed it was stronger than it was, and that paid the price for failures that have built up for years…

“When the pandemic hit, then, Britain was not the strong, successful, resilient country it imagined, but a poorly governed and fragile one. The truth is, Britain was sick before it caught the coronavirus…

“At the start of 2020, Britain had been through 10 years of austerity following the 2008 financial crash—another great international crisis that hit the country harder than almost anywhere else.

“The NHS was stretched and fragmented, its lines of authority and responsibility tangled by years of regulatory tinkering. Outside London, the country’s economy was unproductive and poor, and its elderly-care system an unreformed national disgrace.

“The civil service, which believed itself to be the best in the world, had become a shadow of its former self, almost entirely shorn of the ability to act operationally or think strategically, its center hollowed out, weak, and ineffective. The country itself seemed divided and angry, unable to agree on a unifying national story…

“Like America, the country failed to live up to its reputation as a pillar of pandemic readiness. But unlike America, Britain’s political leadership stuck closely to the script experts had drawn up for it—and the country still struggled…

“What it all adds up to, then, is a sobering reality: Institutional weaknesses of state capacity and advice were not corrected by political judgment, and political weaknesses were not corrected by institutional strength” …

“In remarks echoed, though perhaps not as colorfully, by politicians, officials, and diplomats, one figure close to Johnson told me of his experience at the heart of the government machine these past few months: ‘It’s a fucking disgrace.’”

One of the most important, if unacknowledged, roles of institutions is to provide people – including investors and corporate managers – with the confidence to act in the face of Keynesian uncertainty. That is, situations in which the range of possible future outcomes, their potential impact, and/or their probabilities are both unknown and unknowable.

Confidence in the ability of institutions to effectively respond to the worst possible outcomes that could occur in the future gives us confidence to act in the present.

If confidence in the effectiveness of institutions is lost, that can easily lead to both inaction and the search for a strongman (or woman) who can protect us should the worst outcomes occur.

The weakened capacity of institutions at all levels of government (e.g., not just the CDC or NHS, but also local public schools) to rise to various challenges and deliver required results has and continues to be a slowly metastasizing cancer at the heart of the public sector.

This sobering conclusion is echoed in another recent paper, “The Political Scar of Epidemics”, by Askoy et al.

They find “that epidemic exposure in an individual’s impressionable years (ages 18 to 25) has a persistent negative effect on confidence in political institutions and leaders [and] find similar negative effects on confidence in public health systems, suggesting that the loss of confidence in political leadership and institutions is associated with healthcare-related policies at the time of the epidemic.”

In “Ethnic Antagonism Erodes Republicans’ Commitment to Democracy”, Vanderbilt University’s Larry Bartels finds that, “Most Republicans in a January 2020 survey agreed that ‘the traditional American way of life is disappearing so fast that we may have to use force to save it.” More than 40% agreed that 1a time will come when patriotic Americans have to take the law into their own hands.’ (In both cases, most of the rest said they were unsure; only one in four or five disagreed.)”

Batels “uses 127 survey items to measure six potential bases of these and other antidemocratic sentiments: partisan affect, enthusiasm for President Trump, political cynicism, economic conservatism, cultural conservatism, and ethnic antagonism.

“The strongest predictor by far, for the Republican rank-and-file as a whole and for a variety of subgroups defined by education, locale, sex, and political attitudes, is ethnic antagonism—especially concerns about the political power and claims on government resources of immigrants, African-Americans, and Latinos.

“The corrosive impact of ethnic antagonism on Republicans’ commitment to democracy underlines the significance of ethnic conflict in contemporary US politics.”

SURPRISE

This is a stunning finding, that begs the critical questions of (a) whether ethnic antagonism has increased compared to the past, and (b) what has caused it.

It is hard not to believe that factors like the stagnation of real median household income, rising costs for the basics of middle class life (housing, education, healthcare, and adequate retirement saving), worsening inequality, increasing perceptions of an unfair system and declining opportunity, and, more recently, the rise of moralizing racial identity politics (particularly among the most educated voters) that attacks “white supremacy” and casts minorities as victims of structural oppression -- have not all contributed to this result.

But this just begs the existential question of whether the US political system retains the capacity to effectively address these issues.

In August, after rioting in many cities, lethal violence finally broke out – in Kenosha, Wisconsin and Portland, Oregon – between members of America’s extreme left and right.

SURPRISE

It is likely that most Americans intuitively sensed that these shootings crossed a critical line.

For example, Andrew Sullivan wrote, “let’s be frank about this and call this by its name: this is very Weimar. The center has collapsed. Armed street gangs of far right and far left are at war on the streets. Tribalism is intensifying in every nook and cranny of the culture.

“The establishment right and mainstream left both tolerate their respective extremes because they hate each other so much.

“The pattern is textbook, if you learn anything from history: an economic crisis resulting in mass unemployment; the pent-up psychological disorders a long period of lockdown can and will unleash; a failure of nerve on the part of liberals to defend the values and institutions of liberal democracy, and of conservatives to keep their own ranks free of raw demagogues and bigots.

“But critically: a growing sense of disorder and violence and rioting as simply the background noise; and a sense that authorities do not have the strength or the stomach to restore order.”

Both the Democratic and Republican Parties held their national conventions in August. Both conventions were criticized.

Democrats were silent about both the urban rioting voters had witnessed, and how they would address the challenges facing the nation if Biden is elected (perhaps reinforcing some voters uncertainty about whether the progressive or traditional wing of the party will govern if the Democrats win).

Instead of offering positive and hopeful proposals for change, they focused on criticizing Trump, led by former President Obama’s searing speech.

Perhaps more damaging, as Peggy Noonan observed, “there was a nonstop hum of grievance at the convention. To show their ferocious sincerity in the struggle against America’s injustices, most of the speakers thought they had to beat the crap out of the country—over and over. Its sins: racism, sexism, bigotry, violence, xenophobia, being unwelcoming to immigrants. The charges, direct and indirect, never let up.”

The Republicans didn’t even bother to publish a party platform. Apparently, Donald Trump is the platform. Incredibly, they praised Trump’s leadership during the COVID-19 crisis. But they also repeatedly focused on what Peggy Noonan called, “rising crime, looting and rioting in city protests, increased unease about personal safety, and besieged police forces.”

SURPRISE

After the conventions, Joe Biden’s previous national polling advantage over Donald Trump began to shrink.
He promptly flew to Pittsburgh, and in a speech strongly stated that, “rioting is not protesting. Looting is not protesting. Setting fires is not protesting. None of this is protesting. It's lawlessness, plain and simple. And those who do it should be prosecuted," Biden said. "Violence will not bring change, it will only bring destruction. It's wrong in every way."

But he then proceeded to blame the nation’s urban violence on Donald Trump.

There is an old saying in politics, that in the face of uncertainty and fear, voters need both truth and hope.

Unfortunately, the two parties’ conventions gave them neither, and almost certainly increased uncertainty and anxiety among the swing voters in the swing states that both candidates need to win in November. In doing so, they shifted psychological focus of this campaign to security, which, the narrowing polls suggest favors Donald Trump.

And thus we are confronted with an outcome that seemed very unlikely before the conventions: a tightening race, but also one in which Biden remains in the lead, both nationally and in key swing state polls.

Between now and November, a COVID resurgence and/or a sharp decline in the economy will likely favor Biden. Continuation of urban violence, and/or a significant worsening in the US-China conflict, and/or a weak Biden debate performance will likely favor Trump.

Finally, there is also the wildcard of election day shenanigans by the Republicans involving mail ballots, which, because of COVID, will be much more important this year (and also the likely basis of Biden challenging the election result if he loses).

“Morality Justifies Motivated Reasoning In The Folk Ethics Of Belief”, by Cusimano and Lombrozo

No, you haven’t been imagining it – or the only one who has thought this was going on in our political life…

“When faced with a dilemma between believing what is supported by an impartial assessment of the evidence (e.g., that one’s friend is guilty of a crime) and believing what would better fulfill a moral obligation (e.g., that the friend is innocent), people often believe in line with the latter. But is this how people think beliefs ought to be formed?

“We addressed this question across three studies and found that, across a diverse set of everyday situations, people treat moral considerations as legitimate grounds for believing propositions that are unsupported by objective, evidence-based reasoning.

“We further document two ways in which moral evaluations affect how people prescribe beliefs to others. First, the moral value of a belief affects the evidential threshold required to believe, such that morally good beliefs demand less evidence than morally bad beliefs.

“Second, people sometimes treat the moral value of a belief as an independent justification for belief, and so sometimes prescribe evidentially poor beliefs to others.”

“Democracy is Not Destiny”, by Ruy Teixeira

SURPRISE
“In the months after Barack Obama’s historic victory, the conventional wisdom held that Democrats would now dominate the nation’s politics for decades. “There have been long periods where one party generally has the upper hand,” famous Democratic strategist James Carville remarked at the time. Obama’s victory, the title of Carville’s new book predicted, marked the beginning of just such an epoch: 40 More Years—How Democrats Will Rule the Next Generation.

“Carville’s analysis was based on a simple narrative: Groups that favor Democrats are growing. Groups that favor Republicans are shrinking. Demographic change will keep swelling the Democratic ranks until Republicans have little choice but to surrender.

"It is a narrative I know well, for it is based on a bowdlerization of my own work. In 2002, John Judis and I published The Emerging Democratic Majority. In our book, we argue that Democrats should take advantage of a set of interrelated social, economic and demographic changes, including the growth of minority communities and cultural shifts among college graduates.
But we also emphasized that building this majority would require a very broad coalition, including many voters drawn from the white working class…

To hold this broad coalition together, we argued, Democrats needed to adopt a form of “progressive centrism.” The party should proudly emphasize the ability of government to improve the lives of ordinary Americans. But its governing ideology could not present itself as standing in radical opposition to the country’s founding values…

This crucial nuance was quickly lost.

"And so, many Democratic pundits, operatives and elected officials have falsely come to believe that demographics are destiny…Instead of focusing on the fact that this emerging majority only gave Democrats tremendous potential if they played their cards right, many progressives started to interpret it as a description of an inevitable future…

“The result has been a decade-long electoral disaster. With the exception of Obama’s victory in 2012, Democrats lost just about every important election for the next eight years.

“By early 2016, the party was down to 44 seats in the United States Senate, 188 seats in the House of Representatives, 18 governorships and 3,164 seats in state legislatures—the fewest elected offices Democrats have held nationwide since the 1920s. Then came the coup de grace: Donald Trump defeated Hillary Clinton to become the 45th President of the United States…

“The bowdlerization of the emerging Democratic majority thesis neatly complemented the political predilections of a rising set of people who placed questions of group identity and disadvantage at the heart of their political activism.

“This approach, which soon came to be known as “identity politics,” privileges mobilization around multiple, intersecting levels of oppression based on group identification over mobilization around universal rights and principles that bind people together across groups. Since most white non-college voters were rightly perceived to be uninterested in—if not outright hostile to—the core tenets of intersectional politics, those who favored this approach had a reason to embrace an electoral strategy that dispensed with them…The apotheosis of this attitude was Hillary Clinton’s infamous statement that half of Trump’s supporters belonged in a “basket of deplorables” …

“If Democrats don’t correct their misunderstanding of what it takes for them to win elections, the next decade could turn out to be just as bitter as the last. But even after ten painful years, their most influential operatives continue to believe that demographic changes will inevitably give them a decisive advantage”…

“First as Tragedy, Then as Farce: The Collapse of the Sanders Campaign and the “Fusionist” Left”, by Nagle and Tracey

SUPRRISE
The authors describe the two very different primary campaigns run by Bernie Sanders in 2016 and 2020. They note that, “immediately after the 2016 election, [Sanders] authored a message that was decidedly different in tone from the frantic, denunciatory screeds ripping across the left-liberal media at that time:

“Donald Trump tapped into the anger of a declining middle class that is sick and tired of establishment economics, establishment politics and the establishment media,” Sanders wrote. “To the degree that Mr. Trump is serious about pursuing policies that improve the lives of working families in this country, I and other progressives are prepared to work with him.”

But this never came to pass, largely for reasons having to do with the radicalization of the American “progressive” movement”, and, to be sure, the Trump administration quickly pivoting to support economic policies favored by the traditional Republican donor class.

Nagle and Tracey proceed to chronicle how between 2016 and 2020, Sanders moved away from traditional Democratic class based rhetoric and adopted progressives’ identity politics.

“The Double Horseshoe Theory of Class Politics”, by Michael Lind

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In this essay, Lind’s key point is that “the ‘class war’ isn’t happening where you think it is.”

He notes that, “it is obvious that class conflicts have set the North Atlantic world ablaze? But what are the classes?”
He posits that there are actually three groups with both what he terms the overclass and the working class. By Lind’s reckoning, the former accounts for at most thirty percent of the US population.

In the overclass, “the managerial elite proper consists of the functionaries of corporations, large investment banks, law firms, government agencies, both civilian and military, nonprofits, and universities. They may have professional degrees, but they are essentially organizational men and women in centralized, hierarchical, bureaucratic entities.”

Another overclass group is “The professional bourgeoisie—made up of lawyers, doctors, professors, K-12 teachers, journalists, nonprofit workers, and many of the clergy—is concentrated in the teaching, helping, and research sectors. Their jobs often pay modestly but provide both status and a degree of personal autonomy that the frequently better-paid managerial functionaries in more hierarchical occupations do not possess.”

The third overclass group is “the small business bourgeoisie, which consists of the owner-operators of small businesses and franchises, along with genuine contractors (as opposed to proletarian “gig workers”), both those who are self-employed and those who employ others.

“In the United States (if not necessarily other Western countries), the overclass broadly defined, then, can be viewed as a compound of the classic managerial elite plus these two bourgeois classes. A four-year college diploma is a prerequisite for entry into all of these elite groups.”

Lind’s thesis is that today, “American politics is little more than the internal politics of the overclass, now that the working class majority has lost the grassroots, mass-membership institutions that once gave it collective bargaining power—private sector trade unions, influential religious organizations, and local political parties. Members of the working-class majority play no role except as occasional voters.

“They tend to be ignored, except during election seasons, when they are targeted by manipulative appeals based on race and gender in the case of the Democrats and religion and patriotism in the case of the Republicans.”

Lind defines the dynamic of political competition and conflict, within the overclass thus: “the members of the professional bourgeoisie and the small business bourgeoisie live in terror of proletarianization. Many professionals fear they will not be able to secure high-status jobs with their educational credentials, and the small proprietors fear they will lose their businesses and be compelled to work for others.

“At the risk of being overly schematic I would suggest that the “center,” “left” and “right” of America’s top-thirty percent politics can be mapped imperfectly onto the managerial elite, the professional bourgeoisie and the small business bourgeoisie.”

More articles appeared this month detailing concerns about an increasingly likely transition crisis following the November election in the US.

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Previously, these concerns had mostly been focused on the potential refusal of Donald Trump to leave office if he is defeated, and to somehow challenge the legitimacy of the election.

However, in “Getting from November to January”, Nils Gilman concludes that, “Wargaming shows that, short of a landslide victory for Joe Biden in the upcoming elections, we may be headed for a severe constitutional crisis.”

If Biden loses, his team is likely to challenge the election results because of interference with absentee balloting, which will be critical thanks to COVID. For example, the US Postal Service has tripled the cost of mailing absentee ballots, and eliminated overtime payments to postal employees, which has slowed delivery times throughout the system.

The Biden team’s goal would be to force the election to be decided by the House of Representatives, which the Democrats control. However, for this to happen, it is almost certain that the US Supreme Court would first have to rule on the legality of overturning the vote of the Electoral College. At this point, it seems highly uncertain which way the Court would rule.

In sum, regardless of which candidate wins in November, a constitutional crisis is very likely to follow.

In the long-run, perhaps the most disturbing information that has emerged from the COVID-19 crisis in the United States may be the politicization, along existing partisan lines, of medical issues such as the benefits of wearing masks or avoiding large public gatherings to limit the transmission of coronavirus.

On top of this, congressional Democrats and Republicans are deadlocked over the timing and form of a second stimulus package, as the effects of the first one are fading.

SURPRISE

While resistance to wearing masks and avoiding large public gatherings almost certainly has short-term medical consequences with respect to the spread of COVID-19, what is arguably more important is what this says about the dramatic deterioration in the United States’ apparent ability to take collective action to effectively respond to threats.

As Damon Linker noted in a recent (and powerful) essay, “Coronavirus is Revealing a Shattered Country”, “America's disastrous response to the coronavirus pandemic is not simply a function of the Trump administration's incompetence and incontinence… This isn't a Republican fail. It's an American fail.

“What is the source of the failure? It has many names —individualism, cultural libertarianism, atomism, selfishness, lack of social trust, suspicion of authority — and it takes a multitude of forms. But whatever we call it, it amounts to a refusal on the part of lots of Americans to think in terms of the social whole — of what's best for the community, of the common or public good. Each of us thinks we know what's best for ourselves.

“We resent being told what to do. If wearing a mask is unpleasant, we don't want to be forced to do it. In fact, a governing authority — or really, anyone, even fellow customers at a grocery store — reprimanding us for failing to do our part for public health is enough to make us dig in our heels and stubbornly refuse to go along… This is the doom loop into which we appear to have fallen.

“It's a politics of centrifugal forces that issues not just in partisan polarization and a vacated ideological center, but in an emptying out of any public, common life at all.

“The siloing of ideas and even reality online, along with the race- and class-based segregation of physical space that has long been a feature of American society, are feeding off of and amplifying each other in the crucible of a country confronting a deadly contagion, economic free-fall, and serious spike in urban gun violence…

“It’s a glimpse of a shattered country in decline, lacking consensus about much of anything, fractured into mutually antagonistic factions, and overseen by a government at any given time considered illegitimate by large portions of the nation and unable to muster the capacity to accomplish any public goal with competence.

“A debilitating collapse in state capacity — that is what we're seeing, and it is both an effect and a cause of our incorrigible suspicion and distrust of authority of all kinds.”

While the US Supreme Court affirmed that “faithless electors” (who, in the Electoral College, vote for a candidate who did not win the popular vote in their state) are subject to punishment, last month also saw growing concerns expressed about what will happen if Donald Trump loses the November election.

SURPRISE

For example, in “Could This Election Capsize America?”, the FT’s Ed Luce writes that he “recently participated in a four-hour “war games-style” scenario helping to play the role of the media. Others included senior US political operatives, constitutional lawyers and scholars — who variously played the roles of the Trump and Biden campaigns, the parties, the governors and the courts. The Chatham House rule prevents me from specifying the organiser or its participants. But take it from me that it was a credible and disturbingly plausible exercise.

“It started on the night of November 3 with the premise that Trump narrowly wins the electoral college on a historically low turnout in which the vote has clearly been suppressed in many states. Biden won 52 per cent of the popular vote, Trump 47 percent. By the end of the game — in mid-January 2021 — the US system was at breaking point.

“There is no precedent in American history, or provision in the US constitution, to rerun a presidential election, which would have been the obvious way out. Several states, including Michigan and Wisconsin, sent competing electoral college returns to the US Congress (the Democratic governor one result, the Republican legislature another). The Supreme Court saw no basis to interfere. The growing popular backlash on the streets, and Democratic calls for a do-over, and threats of Californian separatism, played into Trump’s claim to be America’s only hope for stability and continuity. At that point the game ended.

“What worried the organisers is that they had arrived at the same result in early games with very different starting points (Biden narrowly winning the electoral college, for example). In each scenario, and to their surprise, America was plunged into a constitutional crisis. I thought this was a plausible threat beforehand. Now I am convinced it is.”

See also, “How Trump Could Lose the Election and Remain President”, by Daniel Block; “What if Trump Loses, but Insists He Won?” by Max Boot; “Will He Go?” by Sean Illing; “Revealed: Republicans and DC veterans fear Donald Trump won't accept election defeat”, by Ben Riley-Smith; and “What if Trump Won’t Accept 2020 Defeat?” by Bertrand and Saumelsohn.

Coronavirus could produce some underappreciated political effects, according to two different authors.

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Writing in the Financial Times, Gideo Rachman claims that “Coronavirus Could Kill Off Populism”, essentially because most populist leaders have all demonstrated incompetence in handling it (a point consistent with a broader theory that populists are far better at getting elected than they are at governing).

In “The Pandemic and Political Order”, Francis Fukuama argues that, “The pandemic has shone a bright light on existing institutions everywhere, revealing their inadequacies and weaknesses. The gap between the rich and the poor, both people and countries, has been deepened by the crisis and will increase further during a prolonged economic stagnation.

“But along with the problems, the crisis has also revealed government’s ability to provide solutions, drawing on collective resources in the process. A lingering sense of ‘alone together’ could boost social solidarity and drive the development of more generous social protections down the road, just as the common national sufferings of World War I and the Depression stimulated the growth of welfare states in the 1920s and 1930s.

“This might put to rest the extreme forms of neoliberalism…Nobody will be able to make a plausible case that the private sector and philanthropy can substitute for a competent state during a national emergency.”

That said, Fukyuama also pessimistically notes that, “to handle the initial stages of the crisis successfully, countries needed not only capable states and adequate resources but also a great deal of social consensus and competent leaders who inspired trust” – a test that few have passed.

“The Political Scar of Epidemics”, by Aksoy et al

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“What will be political legacy of the Coronavirus pandemic? We find that epidemic exposure in what psychologists refer to as an individual’s “impressionable years” (ages 18 to 25) has a persistent negative effect on confidence in political institutions and leaders. We find similar negative effects on confidence in public health systems, suggesting that the loss of confidence in political leadership and institutions is associated with healthcare-related policies and their limitations at the time of the epidemic.

“In line with this argument, our results are mostly driven by individuals who experienced epidemics under weak governments with less capacity to act against the epidemic, disappointing their citizens. We provide evidence supportive of this mechanism by showing that weak governments took longer to introduce policy interventions in response to the COVID-19 outbreak. These results imply that the Coronavirus may leave behind a long-lasting political scar on the current young generation (“Generation Z”).”

“America’s Democratic Unraveling: Countries Fail the Same Way Businesses Do, Gradually and Then Suddenly”, by Daron Acemoglu

SURPRISE

“Institutional collapse often resembles bankruptcy, at least the way Mike Campbell experienced it in Ernest Hemingway’s The Sun Also Rises: “gradually and then suddenly.” As James Robinson and I argue in our recent book, The Narrow Corridor, democratic institutions restrain elected leaders by enabling a delicate balance of oversight by different branches of government (legislature and the judiciary) and political action by regular people, whether in the form of voting in elections or exerting pressure via protest.

“But democratic institutions rest on norms— compromise, cooperation, respect for the truth—and are bolstered by an active, self-confident citizenry and a free press. When democratic values come under attack and the press and civil society are neutralized, the institutional safeguards lose their power.

“Under such conditions, the transgressions of those in power go unpunished or become normalized. The gradual erosion of checks and balances thus gives way to sudden institutional collapse…
“U.S. institutions were vulnerable to Trump’s attack because public trust had been quietly ebbing away from them for some time … Although the United States is now on the brink of the sudden phase of institutional collapse after three and a half years of gradual decay, Trump has not yet freed himself from all constraints.

“There are still federal judges willing to block his unlawful executive orders and at least some bureaucrats willing to stand up to his most abhorrent behavior. The armed forces may be able to restrain him as well, as evidenced by the forceful rebuke from former Defense Secretary James Mattis after threatening to deploy the U.S. Army and the National Guard against protesters.

“But it would be a sad day if Americans had to depend on the military to save their democracy. And the trend is toward fewer, not more, checks on the president’s power. If the last remaining restraints give way, the fall toward autocracy will be swift.”

“Not Public-Spirited” by Daniel DiSalvo

Demonstrations and riots following the death of George Floyd triggered widespread calls for police reform, and criticisms of police unions for blocking it.

However, this forced recognition that police unions are just one part of a much larger problem. DiSalvo notes that, “The deeper problem is that unionization and collective bargaining have made it almost impossible to bring about meaningful reform of state and local government, policing included. The consequences are huge, because the inability to reform government means that performance suffers and public trust in key institutions declines.”

“Is the Left Trying to Get Trump Reelected?” asked Daniel McCarthy in the National Interest

“The protesters want nothing more than to see Trump defeated, of course. But for the last 15 years, American politics has seen new social movements rise in response to a presidential administration they oppose and fade away once a new president is elected.

“Remember the antiwar movement of 2006? It didn’t survive the Obama administration. The Tea Party movement and its calls for restraint on government spending haven’t been a force since the election of Donald Trump.

“And if Joe Biden wins in November, what are the odds that woke young Democrats will be protesting outside his White House the next time a black man dies in police custody? …

“The demands of current protesters are classic instances of idealistic overreach with the potential to create nightmarish results once implemented.

Like the Tea Party and the antiwar movement, the movement for a crackdown on cops is only plausible so long as there is no need to take responsibility for the inevitably imperfect policy solution. The real politics of war, spending, police reform, or, say, healthcare reform is messier than the ideals of protesters can ever accommodate…

“Thus, if the protests wind up helping Trump come November, the president’s re-election may paradoxically be a godsend to the activist left as well.”

Already under fire for his handling of the COVID-19 crisis, Donald Trump’s response to the riots pushed his approval rating further down.
Perhaps more important, it drew public rebukes from two widely respected former Chairmen of the Joint Chiefs of Staff, Admiral Mike Mullen and General Jim Mattis, for his use of active duty troops to clear protesters from Lafayette Square across from the White House, and threats to send troops into more US cities to confront demonstrators he described as “terrorists.”

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Mattis wrote that, “Donald Trump is the first president in my lifetime who does not try to unite the American people—does not even pretend to try. Instead, he tries to divide us. We are witnessing the consequences of three years of this deliberate effort. We are witnessing the consequences of three years without mature leadership. We can unite without him, drawing on the strengths inherent in our civil society. This will not be easy, as the past few days have shown, but we owe it to our fellow citizens; to past generations that bled to defend our promise; and to our children.”

How these statements will affect support for Trump among his voting base (which is generally pro-military) remains to be seen.

It is also uncertain how these high profile rebukes from senior military officers will affect other Republicans, both in Congress and the Administration.

Another excellent article, “History Will Judge the Complict” by Anne Appleabaum, goes into great detail about the subtle and unsubtle ways many of them have compromised their previous values since Trump became president, and how they have remained painfully silent despite the growing chaos in the White House.

As Applebaum writes, “at some point, after all, the calculus of conformism will begin to shift. It will become awkward and uncomfortable to continue supporting “Trump First,” especially as Americans suffer from the worst recession in living memory and die from the coronavirus in numbers higher than in much of the rest of the world.”

“Democracy on the Defensive in Trump’s America” by Mingels et al in Der Spiegel

SURPRISE

Der Spiegel highlights growing authoritarian tendencies on the part of president Trump that represent another potential source of an uncertainty surprise over the coming months.

“Coronavirus, economic collapse and now mass demonstrations for racial equality: The United States is facing a trio of deep crises. Instead of offering leadership, President Donald Trump is exacerbating divisions and showing authoritarian tendencies.

“With the presidential election still several months away, the country's health is at stake…
“Should we be worried about the United States? Is a fundamental shift taking place in a country that is synonymous with deeply rooted democracy?

“The current chaos on the streets of America isn't just the product of the country’s economic and societal tensions. The president himself has repeatedly exacerbated those conflicts with his rhetoric. Trump, it seems, needs the chaos. He feeds off it.

“Few other democratically elected leaders have as much power as the U.S. president, a reality that can lead to abuse. Trump has made personal loyalty the most important qualification for those with whom he surrounds himself. He harbors deep admiration for Russian President Vladimir Putin and once voiced his support for the violent crushing of the pro-democracy protests on Beijing's Tiananmen Square, saying it was a sign of strength…

“The Russia investigation and his impeachment did not show him the limits of his power, and instead awakened in him a desire to hit back hard and to get rid of anyone within government who does not fulfill his every whim. In the waning months of his first term in office, just a few months before Election Day, he is increasingly putting his authoritarian tendencies on full display.”

The Der Spiegel article concludes with a review of concern that Trump may either try to disrupt the November election, or, if he loses, won’t voluntarily concede defeat and vacate the presidency.

As Ed Luce notes in the Financial Times, “Mr Trump has a burning desire to be re-elected. In his mind defeat would lead to the dismantlement of the Trump Organization and his prosecution and possible imprisonment.
“Faced with a choice between sabotaging American democracy or a future spent in and out of courtrooms, I have no doubt where Mr. Trump’s instincts would lie. It would be up to others to stop him” (“How Things Could Go Very Wrong in America”).

While many political uncertainties have been created or worsened by COVID19, perhaps the most important of all is the future impact of accumulating economic pain and social fear and anger.

As the United States heads toward the November election, a critical uncertainty is how these emotions will interact with competing political narratives.

In periods of high uncertainty, evolution has primed us to take actions that increase our chance of survival. These includes conforming more closely to the views of our group and/or its strong leader, and thus depending more on social learning and copying than our independent evaluation of private and public information. Hence, the contest to attract voters to competing political narratives, in a highly polarized, hyper-connected, and social media saturated electorate, will be critical to how the future evolves.

It is not hard to envision, in broad terms at least, the main themes of these narratives, including how they explaining the present (or blaming others for it), and offer hope for the future.

There will almost certainly be a left/populist narrative based on a mix of ideology and identity politics that demands relief for different victim groups, an expanded government in many areas, paid for with higher (monetized) deficits and much higher taxes on elites, along with greater regulation of business (e.g., healthcare, reshoring of supply chains, minimum wages, etc.). This narrative is also likely to have a strong emphasis on “green” infrastructure programs to limit global warming and the future catastrophes it threatens.

There will also very likely be a center/left narrative that is more focused on common class based interests. It will likely adopt similar economic positions as the progressives, but drop the latter’s emphasis on identity issues in favor of more traditional communitarian themes (“we’re all in this together”, “we need our allies to preserve our national security”, etc.), and a renewed emphasis on leadership quality and government competence.

A center/right narrative will likely use the similar social themes. It will likely put more emphasis on the need for competent leadership in critical institutions, and less on an expansion of government’s role. A good example of this is the recent proposal in the UK for a new government backed initiative (“a new 3i”) that would support small and medium sized businesses not with loans, but with equity. Another example is the proposal for bankruptcy reforms. A center/right narrative will also focus on a more aggressive China’s threat to the west.

Today, the UK Conservative Party’s evolving narrative (e.g., “One Nation Conservatism”) is perhaps the best example of this approach. In the United States, various elements of this narrative are slowly emerging from the traditional social, economic, and foreign policy wings of the Republican Party (e.g., Oren Cass’ new American Compass think tank). However, these various lines of thinking will likely not congeal into a clear narrative until after the 2020 election.

Finally, we will also see right/populist narratives, which, like the progressive narrative, are based on identity rather than ideology or class interests –in right/populist case, national and racial identity. The fundamental value proposition of this narrative is protecting a traditionally dominant (rather than victimized) in-group against potential losses to domestic and foreign out groups that are perceived as increasing threats. In times of high uncertainty, anxiety, and fear such narratives have powerfully appealed to human beings’ primitive survival instincts.

However, as Francis Fukuyama has observed, narratives that focus on identify undermine traditional democratic political processes, and impel countries towards more authoritarian forms of government.

Pew polling found that 65% of American adults believe Donald Trump was too slow to respond to the coronavirus outbreak in the US. 73% say that, in thinking about the problems the country is facing from the outbreak, the worst is yet to come (Pew Research 16Apr20).

SURPRISE

As Lee Drutman concludes in “The COVID-19 Blame Game Is Going To Get Uglier”, “the 2020 election will be the COVID-19 election. Voters will almost certainly be asked to condemn or endorse President Trump’s handling of the pandemic — and quite possibly while the virus is in the midst of a fall relapse… Here is the crudest of calculations: If Democrats can successfully associate the substantial harm wreaked by COVID-19 with Trump, they win in November. But if Trump and the Republicans can deflect enough blame elsewhere and Trump gets credit for making things less bad than they could have been, Trump will win.”

In the same Pew survey, 47% of Sanders supporters agreed with the statement that, “Differences will keep many Democrats from supporting Biden”.

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Biden’s choice of a vice presidential running mate will very likely have a large impact on the outcome of the election in November. A choice that satisfies the progressive wing of the party may cost it critical support in the swing states Biden must carry to win the electoral college. On balance, this is likely to be a greater concern to Biden than losing progressive support that is heavily concentrated in states that a Democratic candidate is already almost certain to carry.

US presidential candidate Joe Biden has been accused of sexual assault by a former staff member.

SURPRISE

As was the case with accusations against Supreme Court Justice Clarence Thomas by Anita Hill, followed by the Bill Clinton and Monica Lewinsky saga, and now coming as it does after the bitter fight over similar accusations against Supreme Court Justice Brett Kavanaugh, the inconsistency of Democrats’ positions on this issue seem likely to hurt them with swing voters in key states in November.

The health of Joe Biden and Donald Trump is another critical uncertainty in the US election.

Both are old, and questions have been raised about both men’s cognitive health. And both are in the high risk category should either contract COVID19. However, any attempt to replace Biden as the Democratic candidate would reopen the battle between the party’s traditional and progressive wings, with the latter demanding that Bernie Sanders become the candidate.

On the Republican side, loss of Trump as the party’s candidate would very likely lead to a contested convention at which Mike Pence and Nikki Haley would vie for the nomination. If the latter won, she would very likely be a formidable opponent for whomever the Democratic candidate turned out to be (and note that this year the Republican convention will be held after the Democratic convention).

In a worrisome development, Donald Trump has started firing federal government Inspector Generals

SUPRRISE

In “An Attack On Inspector General Signals Something Much Bigger, Joshua Rovner notes that, “Exacting revenge on government officials for doing their jobs is bad. Going after inspectors general is especially dangerous because they serve as watchdogs for Congress and the public. Going after the intelligence community inspector general is worst of all, due to the uneasy place of secret intelligence in a democracy...

"Inspectors general are vital. They serve a “boundary spanning” function, acting simultaneously as internal and external watchdogs. An inspector general is part of the hierarchy of its respective agency, but its activities are not subject to internal sanction. By law, inspectors general have broad access to organizational practices, even when organizations operate behind multiple layers of classification.

“Beginning with the Inspectors General Act of 1978, Congress has steadily expanded their powers. Most recently, the Inspector General Empowerment Act of 2016 ensures that they have “have timely access to all records, reports, audits, reviews, documents, papers, recommendations, or other materials available.”

“Extremist ideology as a complex contagion: the spread of far-right radicalization in the United States between 2005-2017”, by Mason Youngblood

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“The far-right movement, which includes white supremacists, neo-Nazis, and sovereign citizens, is the oldest and most deadly form of domestic extremism in the United States Increasing levels of far-right extremist violence have generated public concern about the spread of radicalization in the United States…

“Previous research suggests that radicalized individuals are destabilized by various environmental (or endemic) factors, exposed to extremist ideology, and subsequently reinforced by members of their community. As such, the spread of radicalization may proceed through a social contagion process, in which extremist ideologies behave like complex contagions that require multiple exposures for adoption.”

The author studies “data from 416 far-right extremists exposed in the United States between 2005 and 2017. The results indicate that patterns of far-right radicalization in the United States are consistent with a complex contagion process, in which reinforcement is required for transmission. Both social media usage and group membership enhance the spread of extremist ideology, suggesting that online and physical organizing remain primary recruitment tools of the far-right movement.”

Needless to say, it would be very interesting to see a similar study of how far left populism has spread.

The latest revelations in the criminal case against former National Security Adviser Michael Flynn will likely have an impact on the November election

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According to Politico, “The FBI took steps in early 2017 to close its investigation into former Trump adviser Michael Flynn before abruptly reversing course, according to new documents filed in Flynn’s pending legal effort to rescind his guilty plea for lying to federal agents.

“The filings indicate that by Jan. 4, 2017, the FBI had drafted a document summarizing findings on a probe — code-named “Crossfire Razor” — of whether Flynn had been acting as a Russian agent during the 2016 campaign.

"The partly redacted document, which was included in the court filings, indicated the FBI had no “derogatory” information on Flynn and was prepared to close the case... But messages later that afternoon between senior agents and FBI officials show a last-minute reversal, driven by discussions at the bureau’s highest levels.”

Later, after the FBI threatened to prosecute his son, Flynn agreed to plead guilty to reduced charges against him. His subsequent withdrawal of his guilty plea, and the Justice Department’s recommendation that the charges against him be dropped, is now the subject of yet another confrontation between Trumps’ supporters and detractors.

“Precarity, not inequality is what ails the 99%”, by Albena Azomanova in the Financial Times

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This is an outstanding assessment of a, or perhaps the, fundamental driver of political volatility and disruption today.
“Tax the rich” has become the progressive battle cry — and not merely on the fringe. The scourge of economic inequality is celebrity politics, voiced by Nobel prizewinners and international policy chiefs alike.

“Yet this slogan did not deliver the electoral victories the left hoped for. The reason is that economic instability, not inequality, is what ails the 99 per cent. Inequality is one symptom of instability, to be sure. But to focus on inequality alone is a diagnostic error. And the cure is not simply redistribution of purchasing power, but more radical: to build a more stable, secure and sustainable society. The Covid-19 pandemic drives this point home…

“Inequality is a statistical fact. It can be measured and thus easily draws attention. But when does the statistical fact of economic inequality become a form of social injustice? One answer: when affluence entails social privilege; when extreme wealth translates into power that is self-serving and predatory. Here the realistic remedy is not redistribution but countervailing power: trade unions and other mass organising; strong, principled political parties; prosecutions for financial fraud; and vigilance against state capture.

“A second big problem comes when wealth becomes the only apparent source of safety.

“This is our predicament now. The combination of automation, globalisation and cuts in public services and social insurance, has generated massive economic instability for ordinary citizens — for men and women, young and old, skilled and unskilled, for the middle classes and the poor alike. It is much deeper for minorities, immigrants and other disadvantaged groups.
“The pandemic was exacerbated by precarity, our politically crafted social insecurity...

“The insecurity and frailty of the 99 per cent is rooted in the poverty of our shared services, the weakness of public education, the burden of debt on graduates and, above all, in poor public health, and underfunded or even inaccessible healthcare.
“This would not change even if our societies became perfectly equal. We are in this conundrum because contemporary capitalism had created not just a precarious class (the “precariat”) but a precarious multitude…”

“Prediction Model Based on Integrated Political Economy System: The Case of US Presidential Election”, by Li et al, from the School of Systems Science, Beijing Normal University

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This paper is fascinating for three reasons. First, it provides a detailed model, at the state and industry level, of the interaction between economics and political outcomes. Second, in so doing, it shows how economic and industrial policy can influence those political outcomes. Most important, given that the authors all come from Beijing University, it raises the issue of whether, as one of its goals, China’s long term industrial policy has sought to influence the structural dynamics of presidential politics in the United States.

“In view of the high complexity of real-world systems, researchers should conduct research from a systematic perspective to better understand the mechanism of systems and control them efficiently, which requires us not only to take into account the multilevel structure within a single system, but also to explore the coupling interaction between systems.

“For example, if we only focus on the own factors of the political system (e.g. campaign slogans and canvassing activities) and ignore the complex interaction existing between the political system and other real-world systems (e.g. economics and transportation), the conclusion may fall into an unrealistic misunderstanding…

“Given the close relationship between politics and economy, there is a need for systematic approaches to specifically analyze the interaction…

“This paper studies an integrated system of political and economic systems from a systematic perspective to explore the complex interaction between them, and specially analyzes the case of the US presidential election forecasting…

“We propose a simple and efficient prediction model for the US presidential election, and meanwhile inspire a new way to model the economic structure. Our findings highlight the close relationship between economic structure and political attitude.”

A critical uncertainty going forward is to what extent governments’ response to COVID19 has accelerated the decline in their perceived legitimacy that was evident well before the pandemic arrived.

SURPRISE

Consider three recent observations on this issue.

In “The Coronavirus Pandemic will Forever Alter the World Order”, Henry Kissinger observes that, “Nations cohere and flourish on the belief that their institutions can foresee calamity, arrest its impact, and restore stability. When the COVID19 pandemic is over, many countries’ institutions will be perceived as having failed.”

In Politico, Sue Gordon, a retired career intelligence officer, noted that, ““COVID has proved we need institutions. And yet, our bureaucracies are proving increasingly ineffective, in part because the speed of decision-making that is required. We need to reimagine and rebuild. Who are the leaders who are going to come in and do that? My catastrophic event is the failure of bureaucracy to provide the governance our society needs, keeping true to our values.”

And in his powerful essay in The Atlantic (“We Are Living in a Failed State”), George Packer observed, “when the virus came here, it found a country with serious underlying conditions, and it exploited them ruthlessly. Chronic ills—a corrupt political class, a sclerotic bureaucracy, a heartless economy, a divided and distracted public— had gone untreated for years…

“Every morning in the endless month of March, Americans woke up to find themselves citizens of a failed state. With no national plan—no coherent instructions at all—families, schools, and offices were left to decide on their own whether to shut down and take shelter.

“When test kits, masks, gowns, and ventilators were found to be in desperately short supply, governors pleaded for them from the White House, which stalled, then called on private enterprise, which couldn’t deliver…

“Like France in 1940, America in 2020 has stunned itself with a collapse that’s larger and deeper than one miserable leader…

“Despite countless examples around the U.S. of individual courage and sacrifice, the failure is national. And it should force a question that most Americans have never had to ask: Do we trust our leaders and one another enough to summon a collective response to a mortal threat? Are we still capable of self-government?”

According to Pew Research, “two-thirds of Americans expect the November presidential election will be disrupted by COVID19.” 80% of Democrats believe this – but so do 50% of Republicans.

SURPRISE

For example, while 70% of voters support voting by mail (which has been done in Colorado since 2016, with few problems), President Trump is increasingly vocal in his opposition to other states making this change. He has actually gone so far as threatening to withhold federal aid to states that approve mail ballots.

Any attempt by a sitting president to disrupt an election, or to refuse to vacate office if he is defeated, would obviously create a very substantial spike in uncertainty, and have very grave consequences for financial markets, which would likely include flight from the US dollar.

“The Political Economy of Populism” by Gurievy and Papaioannouz

See also, “Measuring Populism Worldwide”, by Pippa Norris of Harvard’s Kennedy School

SURPRISE
This exhaustive study synthesizes a rapidly growing body of research on the rise of populism in recent years.

“While there are many definitions of populism, there is a consensus on the lowest common denominator: anti-elitism and anti-pluralism". While scholars are often adding features, such as authoritarianism, nativism, identity politics, the minimal definition remains a useful reference point. Whatever definitions are used, there is not doubt that there is a major rise of populism in advanced economies, especially in Europe.

“In the last two decades the vote share of populist parties has increased by about 10-15 percentage points (i.e., roughly doubled) and populist parties have taken power in many countries. The rise was especially salient after the global crisis. The main beneficiaries of this increase have been mostly right-wing, nativist, xenophobic, and authoritarian parties rather than pro-redistribution radical-left parties…

“There is ample evidence that the rise of populism reflects economic factors, both secular (trade and automation) and crisis-related (the rise in unemployment and the crisis-related austerity). There is growing evidence that the spread of fast internet and of online social media have also played a major role…”

“Combatting Populism” by Kendall-Taylor and Nietsche of CNAS

In this report, the authors offer research-based recommendations for combating populism.

“The rise of populism in Europe and the United States is well documented. Although studies may disagree about the relative importance of populism’s drivers, there is broad consensus that rising inequality, declining bonds to established traditional parties, increasing salience of identity politics, and economic grievance have played a role in fueling populism’s rise. Although populism is a symptom of democracy’s larger problems, the strategies and tactics populist parties and leaders use also provide their own, direct threat to liberal democracy. Many of the tactics that populist leaders use weaken democratic institutions and constraints on executive power.”

“Populism is also detrimental to democracy because it exacerbates political polarization, which makes it hard for democracy to effectively function. As societies grow more polarized, people become willing to tolerate abuses of power and sacrifice democratic principles if doing so advances their side’s interests and keeps the other side out of power. The polarization that populism fuels, in other words, increases the risk of democratic decline”…

“To push back against populism, liberal democratic actors should avoid language and framing that link identity and partisanship, including by focusing on and owning their issue positions, and fostering interaction between groups at the local level. Liberal democratic actors must also pursue strategies to reduce political polarization, including by shaping people’s perception of norms and avoiding an overdependence on efforts that overly rely on “educating” the other side. Research shows, for example, that efforts to simply expose people to “the facts” or to break down echo chambers by exposing them to views that contradict their pre-existing beliefs are ineffective and can accentuate polarization…

“The way that liberal democratic actors talk about contemporary challenges—the words they use and the frames they employ—will play an important role in countering illiberal populism and renewing liberal democracy.

“Liberal democratic actors should seek to create unifying and aspirational narratives, use blame attributions sparingly, be intentional about myth-busting, highlight solutions and emphasize their efficacy, and avoid adopting the language of right-wing populists.”

“The Tragedy of Revolution: Lessons from the Past” by Daniel Chirot

The author provides a useful counterbalance to the growing number of analyses (like the one above) that see populism as a threat that only emerges from the right side of the political spectrum. In truth, left-wing populism is equally dangerous, as Chirot points out. His key point is that throughout history, moderate centrists on both the left and right have repeatedly underestimated the dangers posed by radical populists.

“Pandemic and the Plight of American Public Policy”, by Francis Gavin

SURPRISE
“Even before the novel coronavirus, it was clear that America’s domestic and international governing practices, ideas, and institutions were falling short. Created to deal with the problems of a 20th-century industrialized world, America’s conception of governance and public policy has failed to adequately address the profound socioeconomic and political disruptions” underway in the United States.

“A vicious cycle has been unleashed: under-resourced and unappreciated, governance and policy lack the means to provide solutions to complex problems of the 21st century. Like a spreading cancer, these failures have eaten away at the public legitimacy of our governing institutions and practices, further undermining our ability to meet new challenges. Expertise is derided, government officials are labeled members of a “swamp,” and officials interested in America’s engagement with the world are mocked as self-dealing members of a “blob,” or — worse — “the deep state.”

Instead of pouring much-needed resources and innovation into governance, bureaucracy and public affairs are held in lower and lower esteem as the United States waits, often in vain, for technology and the private sector to fix problems they are not designed to solve.”

And now, “the COVID-19 crisis has exacerbated the overwhelming challenges our government officials face.”

Former Vice President Joe Biden is almost certain to become the Democratic nominee who will face Donald Trump in a November election, that itself is becoming shrouded in increasing uncertainty.

Whether Progressives and Traditional Democrats will be able to unify around Biden remains unclear. How the election will be carried out – e.g., can national mail voting be scaled up in time – also remains uncertain. And there are also stories claiming that if it looks like he is going to lose, Donald Trump may seek to find a way to delay the election itself.

At the same time, there is no evidence that the COVID19 pandemic has reduced the level of political polarization and partisan discord in the United States (e.g., see “Red and Blue America Aren’t Experiencing the Same Pandemic”, by Ron Brownstein in the Atlantic).

If anything, COVID19 appears to have worsened polarization, across a range of issues from Donald Trump’s leadership, the effectiveness and authority of national and state governments, quarantines, the availability of personal protective equipment for health care workers, to the design of emergency economic programs (e.g., see “Have We Learned Nothing?” by Michael Grunwald in Politico, and “This Time, Small Guys Should Get the Bailouts”, by Rana Foroohar in the FT).

The impact that the federal government’s poor handling of COVID19, and Donald Trump’s weak leadership during the crisis, will have on the November election remains to be seen.

The key uncertainty is whether Trump’s campaign can win the “battle of the narratives”, despite mounting contradictory evidence on the ground. Joe Biden and state level Democratic campaigns will likely stress the uneven distribution of class and racial suffering after COVID19’s arrival, as well as the failures of the Trump administration in responding to it See, for example, “Trump’s Failed Presidency” by Elaine Kamarck from Brookings, “The Coronavirus Called America’s Bluff” by Anne Applebaum, and “How Trump is Fueling a Disaster” in Der Spiegel.

In contrast, the Trump campaign’s likely message strategy will be that progressive overreaction, in west coast and northeast states, destroyed the economy for workers in other states.

In the UK, Keir Starmer was elected as the new leader of the Labour Party.

He immediately began distancing the party from the anti-semitic and far left positions taken by former leader Jeremy Corbyn’s supporters. However, it will take more time and change for Labour to once again become a credible opposition party that voters could see leading a government one day. Given the strength of the left wing, it is not yet clear that Starmer will succeed in this quest.

After the Super Tuesday primaries in the United States, the race for the Democratic nomination to run for president has boiled down to a contest between Joe Biden and Bernie Sanders.

Whether whoever eventually wins the nomination will be able to unify the Democratic party’s progressive and (relatively) moderate party factions (which increasingly resemble two separate parties) and defeat Donald Trump in November remains highly uncertain, even after the latter’s poor handling of the COVID-19 outbreak.

“Too Many US Moderates Make a Muddle for Democrats”, by Janan Ganesh, FT 5Feb20

“Those with moderate views often complain that there is no one to vote for any more. In America, the problem is the opposite: a surplus of candidates. Of all the problems that dog the centre — a winning right, a confident left — the most underrated is its own fragmentation. This owes less to the egoism of politicians, each unwilling to stand aside, than to a free-for-all as to what constitutes moderation.

“Because it was so imperious for so long, centrism did not have to define itself. It was whatever the government of the day was doing, whether led by Bill Clinton or Barack Obama in the US, Tony Blair or David Cameron in Britain, Romano Prodi or Matteo Renzi in Italy. Once it found itself in opposition, the centre had to set out what it believed from first principles…

“This process has been unexpectedly fractious. The basic faultline is between those who see little gravely wrong with the pre-2016 economy, and those who think it too unequal…[There] is genuine confusion over
the meaning of moderation today. Is it closer to liberalism or to social democracy?”

In the 6Feb20 Wall Street Journal, Peggy Noonan made a poignant observation (at least for people of a certain age).

“Democrats, when they’re feeling alarmed or mischievous, will often say that Ronald Reagan would not recognize the current Republican Party. I usually respond that John F. Kennedy would not recognize the current Democratic Party, and would never succeed in it.

“Both men represented different political eras but it’s forgotten that they were contemporaries, of the same generation, Reagan born in 1911 and JFK in 1917. They grew up in the same America in different circumstances, one rich, one poor, but with a shared national culture. By the 1950s, when JFK was established in the political system and Reagan readying to enter it, bodacious America had settled into its own dignity. It had a role in the world and needed to act the part.

“Both men valued certain public behaviors and the maintenance of a public face. It involved composure, coolness, a certain elegance and self-mastery. They felt they had to show competence and professionalism. They knew they were passing through history at an elevated level, and part of their job was to hold high its ways and traditions. Their way is gone, maybe forever.”

“The Revenge of the Middle Class Anti-Elitist” by Simon Kuper, FT 13Feb20

“Here’s a character rarely mentioned in the contemporary political debate. He (he’s usually a man) lives in a suburb or small town. He wasn’t born with a silver spoon, and he worked his way up, which wasn’t always fun. Now he owns his home and earns above-average income. He is scathing of big-city elites with posh accents who got easy lives handed to them. In short, he’s a middle-class anti-elitist.

“You find him across the western world: in New Jersey and Long Island, around the English south-east, the Milan agglomeration and in the quiet suburbs of Rotterdam. The comfortably off populist voter is the main force behind Trump, Brexit and Italy’s Lega. Yet he’s largely ignored, while the conversation about populism revolves around an entirely different figure: the impoverished former factory worker…In most countries, populism is less a working class revolt than a middle-class civil war.”

“Moderation’s Limits”, by Joel Kotkin

SURPRISE
“Moderate Democrats are celebrating Joe Biden’s big Super Tuesday, but their joy may reflect a short-term triumph of the party’s past over its longer-term future. The sudden consolidation of the moderate vote around Biden, paced by the relative inability of Michael Bloomberg to spend his way into relevance, has elevated the creaking former vice president to the top of the pack, mainly as the most likely alternative to socialist senator Bernie Sanders.
“Moderation may have triumphed for now, with help from African-American and older voters, but the Sanders–Elizabeth Warren wing of the Democratic Party remains the choice of rising demographic groups of the future, namely Latinos and voters under 30.”

In another recent article (“The West Turns Red”), Kotkin observes that, “Paired with fellow progressive, Massachusetts Senator Elizabeth Warren, the party’s “red” bloc represents upward to 50 per cent of the party’s electorate, according to an average of polls by Real Clear Politics. To put this in perspective, these numbers are far higher than those enjoyed by President Donald Trump on his romp to the Republican nomination in 2016...

“The new socialism represents, like Trumpian populism, a response to such phenomena as globalization, the rising power of finance and technological change. Around the high-income world, including in the US, these forces have helped nurture an economy where the share of the wealth owned by the top one per cent of earners since 1980 doubled to nearly 40 per cent”…

“The precarious nature of the new American economy is felt most deeply by young voters, a strong plurality of whom now favor Sanders…

“But the most important driver for socialism comes from the burgeoning green movement. Long dominated by the elite classes, environmentalists are openly showing themselves as watermelons — green on the outside, red on the inside. For example, the so called “Green New Deal” — embraced by Sanders, Warren and numerous oligarchs — represents, its author Saikat Chakrabarti suggests, not so much a climate as “a how-do-you-change-the entire-economy thing”. Increasingly greens look at powerful government not to grow the economy, but to slow it down, eliminating highly paid blue-collar jobs in fields like manufacturing and energy. The call to provide subsidies and make work jobs appeals to greens worried about blowback from displaced workers and communities.

“Combined with the confused and vacillating nature of our business elites, and the economic stagnation felt by many Americans, socialism in the West is on the rise.”

“The Democrats are Missing the Biggest Issue of the 2020 Election”, by Robert Merry in The National Interest, 14Feb20

SURPRISE
Note that this was written before COVID19 exploded onto the world's stage…

“The conventional view of this year’s Democratic nomination battle is that it represents essentially a conflict between the party establishment, described generally as “center-left” in political orientation (Joe Biden, Pete Buttigieg, Amy Klobuchar, Michael Bloomberg), vs. the more radical leftists (Bernie Sanders, Elizabeth Warren). But that isn’t what this campaign season is really about. It’s about how the nation’s leaders will address the most pressing political reality of our time--namely, the crumbling of the American status quo and, more ominously, the global status quo. America is struggling through a Crisis of the Old Order….

“In terms of U.S. domestic politics, the gap between reality and establishment thinking is even more profound. Consider some of the powerful changes impinging on the old status quo.

“In the Old Order days, the country’s dominant party was the Democrats, and their bedrock constituency was the American working class, which inevitably meant a large contingent of whites. America’s industrial might was unchallenged in the world, and the economy was dominated by doers and builders. There was a remarkable degree of amity and mutual respect between the nation’s elites and the population at large. Sustained economic growth boosted standards of living generally across the board. The definitional elements of America were largely established and widely embraced. Immigration seemed to most Americans as being generally under control and hence didn’t represent any kind of major political fault line. Class divisions were minor and muted. All that is now under severe challenge…

“Thus is it clear that in domestic politics, as in the global arena, America faces a crumbling status quo that poses big new political challenges. And yet those challenges don’t seem to get much attention from the politicians. Certainly, they chip away here and there at problems related to the status quo disintegration, but there’s little effort to meet the situation head-on or to craft a narrative that explains coherently and meaningfully what’s really happening.

“Politicians, after all, are usually the last to perceive such things because they are so invested in the status quo and the old arguments that worked so well in the past. Ordinary folks are always ahead of their political leaders in seeing the realities of the day”…

Thus far in the 2020 campaign, no candidate for president “has demonstrated much capacity for providing a narrative of the fading status quo or a vision of what could replace it.”

“Impeachment Didn’t Change Minds: It Eroded Trust”, by Thomson-DeVeaux and Bronner on fivethirtyeight.com on 18Feb20

SURPRISE
“For a little over three months, we tracked over 1,100 Americans on how they felt about the impeachment process…The share of Americans who thought Trump committed an impeachable offense hovered between 55 and 58 percent in six separate surveys…
“Respondent after respondent told us that their belief of Trump’s innocence or guilt was just reinforced by the process…The impeachment process might not have shifted anyone’s view about Trump, but it did drive Americans further into their partisan camps — and in the process, unraveled their already frayed sense of trust in the political system.

“When we spoke to them after the Senate trial had concluded, our respondents had few kind words for either party. Instead, they saw impeachment as a stark and painful example of the country’s partisan stalemate…

“There was one thing in our surveys that united ordinary Republicans and Democrats: a sense of anger that for four months, their elected leaders had relentlessly jabbed at the country’s gaping partisan wound…

“The price of this anger and disillusionment appears to have been a loss of trust in public institutions — Congress, the news media, the presidency, you name it. A majority (65 percent) of Americans said their level of trust in the American political system had decreased because of the impeachment process.”

“Most Americans Say There Is Too Much Economic Inequality in the U.S., But Fewer Than Half Call It a Top Priority”, by Pew Research 9Jan20

As a top priority for the federal government, reducing economic inequality (42%) was outranked by making healthcare more affordable (72%), dealing with terrorism (65%), reducing gun violence (58%), and addressing climate change (49%). However, among lower income adults, it ranked higher, with 52% agreeing it should be a top priority for the federal government.

Democrats and Republicans tend to disagree on the factors that contribute a great deal to inequality. The one that generates the most agreement from partisans from both parties is “problems with the education system”, which, along with the tax system, is also the one cited by the most adults (44%).

In a separate study published on 13Jan20, Gallup found that the top five issues that voters rank as extremely important this election year are healthcare (35%), terrorism and national security (34%), gun policy (34%), education (33%), and the economy (30%).

Note that Gallup interprets “extremely important” responses as indicating “intense concern” with an issue, while the sum of “extremely” plus “very important” responses measures “broader but shallower importance”.

“The U.S. Remained Center-Right, Ideologically, in 2019”, by Gallup 9Jan20

At the end of 2019, 25% of Americans identified their political views as liberal (versus 17% in 1992), 35% as moderate (43%), and 37% as conservative (36%).

In terms of party identification, 28% of Americans identify as Democrat, 28% as Republican, and 41% as Independent.

“Democratic partisans are more ideologically diverse than Republicans, with 49% in 2019 identifying as liberal, 36% as moderate and 14% as conservative.”

In 2019, 73% of Republicans identified themselves as conservative and 21% as moderates. In contrast, “the liberal wing of the Democratic Party has about doubled in size over the past quarter century, rising from 25% in 1994 to 51% in 2018. The slip to 49% in 2019 suggests that trend may be slowing or leveling off, at least temporarily”…

“Independents typically mirror the country as a whole, but in this case they are more centrist than center-right. A large plurality identify as politically moderate (45%), whereas 30% call themselves conservatives, and only slightly fewer are liberal (21%).”

“America is Still Waiting for a True Populist”, by Janan Ganesh, FT 22Jan20

“In a vaunted age of populism, the US does not have a true populist. No politician of national clout stands for both the economic and cultural sides of the creed… The marginal voter appears to crave universal healthcare and higher taxes on the rich, but also tighter borders and less strident identity politics.

“That “but” is a slander, of course, as no theoretical conflict exists here. It all adds up to a coherent belief in social cohesion under paternalist government. A European would recognise it as Christian Democracy or One Nation Toryism or even Gaullism, but it is just the politics of mid-20th century America, when immigration was low and the welfare state filled out”…

“The mystery is why politicians are so much better at sensing this demand than at meeting it…

"When someone eventually goes there, the mix of policies will feel jarring, even improper, and then the most natural thing in the world”.

“Boris Johnson is reinventing one nation Conservatism”, The Economist, 2Jan20

“One-nation Conservatism has in fact had many meanings over the decades…At its simplest, [Boris Johnson’s] version of one-nation Conservatism means an amalgam of leftwing policies on economics and right-wing policies on culture—the exact reverse of Mr Cameron’s approach.”

From a US perspective, this is a fascinating and very logical move. From as early as Maddox and Lilie’s “Beyond Liberal and Conservative” (published in 1984), analysts have segmented the US electorate based on their views on social and economic issues. In recent years, the positioning apparently chosen by Boris Johnson has had the largest number of voters.

In the United States, an argument can be made that “Reagan Democrats” fit this description, as did a substantial percentage of swing voters that Trump won in key states in 2016.

However, while it has had a large number of adherents, this liberal on economics/conservative on social issue positioning has also been the one least represented by the dominant views in the major US parties (a point also made by Michael Lind in his excellent new book, “The New Class War”).

Democrats have espoused liberal views on both social and economic issues, Republican conservative views on both, and Libertarians have tended toward liberal views on social issues and conservative views on economic ones

(Note that some analysts have substituted “favoring/not favoring” government intervention for the liberal versus conservative dichotomy. For example, Libertarians are opposed to government intervention in either policy area).

“The Twitter Electorate Isn’t the Real Electorate” by Helen Lewis, in The Atlantic, 13Jan20

“Does Twitter matter? The temptation is to say no. Its user base is small compared with Facebook—321 million monthly active users versus more than 2 billion—and a quick glance at the trending topics reveals its fractious, claustrophobic atmosphere…

“But Twitter has become journalists’ easiest and most reliable source of cor-blimey (or OMG, to American readers) stories, because all of human life is there, and it’s searchable. It is also the world’s wire service: Just look at Donald Trump, who drops his unfiltered thoughts straight onto Twitter, confident that they will be picked up by journalists…

“All of this gives the social network—and its most active users—outsize power to shape the political conversation.”

“Global Satisfaction with Democracy 2020” by Klassen et al, from the Centre for the Future of Democracy, University of Cambridge

The authors, “use a new dataset combining more than 25 data sources, 3,500 country surveys, and 4 million respondents between 1973 and 2020 asking citizens whether they are satisfied or dissatisfied with democracy in their countries…

“Using this combined, pooled dataset, [they] are able to present a time-series for almost 50 years in Western Europe, and 25 years for the rest of the world”.

The authors “find that dissatisfaction with democracy has risen over time, and is reaching an all-time global high [since 1995], in particular in developed democracies. The rise in democratic dissatisfaction has been especially sharp since 2005.”

“Resurgent Marine Le Pen revels in Macron’s woes”, FT 30Jan20

SURPRISE

“When Marine Le Pen was crushed by Emmanuel Macron in France’s 2017 presidential election, the far-right leader looked as if she had suffered permanent political damage. But with Mr Macron deeply unpopular and French party politics in a state of upheaval, Ms Le Pen has bounced back — and polls suggest she has a strong chance of taking her comeback all the way to the Elysée Palace…

“Ms Le Pen has tapped into the anger of France’s anti-establishment gilets jaunes protesters, many of whom share her views on everything from the dangers of mass immigration to the dominance of Paris over the rest of France…

“Above all, she has profited politically from Mr Macron’s success in crushing the traditional parties of left and right, and portraying elections henceforth as Manichean struggles between progressives and nationalists — a restructuring of politics that she says changes everything.”

“The Great Divide: Drivers of Polarization in the US Public”, by Bottcher and Gersbach from ETH Zurich

SURPRISE

Sometimes a foreigner’s perspective provides a clearer view of a country than its own citizens. This thought-provoking, quantitative paper studies the evolution of polarization in the United States between 1994 and 2017. The authors conclude that, “political polarization in the U.S. is mainly driven by strong and more left-leaning policy/cultural innovations in the Democratic party.”

To be sure, it is not as though the United States has not seen such movements before; consider the Great Awakenings/Revival and anti-slavery movements in the 19th century, and the prohibitionists/temperance movement in the early 20th. What is different this time around is that this movement is based in the Democratic Party, and is far more secular in nature than its predecessors. That said, it does seem to represent just the latest manifestation of a cyclical trend in American social life and politics.

“Building U.S. Resilience to Political Violence”, by Itzhak et al from the New America Foundation

SUPRRISE
The surprise was less this report’s contents, and more that a respected think tank actually published it.

“The United States has recently seen a rise in violence and hate speech, an increase in public rhetoric that seems to encourage violence, and a decline in the perceived legitimacy of U.S. democratic institutions. These well-documented trends are themselves alarming. Yet the next year will likely see an escalation in tensions and the risk of violence, due to political and cultural events, including the run-up to the U.S. presidential election and census…

“We define political violence as violence aimed at political ends — meant to control or change who benefits from, and participates fully in, U.S. political, economic, and socio-cultural life….
“We highlight four risk factors for political violence: elite factionalization, societal polarization, a rise in hate speech and rhetoric, and weakening institutions…

“In addition to intensifying, our polarization has changed in nature. Whereas once political divisions stemmed from disagreements over a particular issue or policy, they now stem from how people feel about those on the other side of the political spectrum, known as identity-based or affective polarization.

“This has occurred alongside a process of social sorting: Our personal identities have grown in alignment with our political ones. With this, we are no longer merely competing for political victories, but also for the victories of our racial, religious, ethnic, and gender identities — leading to an ever-heightened need for victory…

“As Americans increasingly connect political differences to core identities rather than issues, the space for deliberation, dialogue, and compromise recedes.”

“How Culture Killed the Labour Party”, by Yascha Mounk in The Atlantic

“The rise of culture as the main cleavage of Western politics helps explain the slow death of social-democratic parties in many countries across the West…

“[In the UK] back when Labour was capable of commanding convincing electoral majorities, it held together a broad class coalition. It was the natural party of working people, with overwhelming support among the less affluent and less well educated. At the same time, it enjoyed strong support among large sections of the middle class, attracting many university students, schoolteachers, and civil servants.

“Although these two sides of the bourgeois-proletarian coalition have always differed in their cultural attitudes, they had significant economic commonalities. Both had an interest in high wages and strong unions. And both relied on the welfare state for the schooling of their children, for access to good doctors, and for the knowledge that they would be able to retire in dignity.

“So long as the main focus of electoral politics was on economic questions, the leaders of the Labour Party could therefore hold this broad coalition together…

“But in the past decades, partisan alignment has shifted away from matters of economic policy toward what one might call questions of culture, such as immigration and, of course, Brexit. And whereas middle-class voters in large urban areas have progressive attitudes on immigration and strongly oppose Brexit, working-class voters tend to be highly critical of immigration and favor leaving the EU. Most of the working-class constituencies that have now swung to the Conservative Party resoundingly backed Leave in the 2016 referendum.”

“The Populist Decade”, by Matthew Continetti

SURPRISE
“The underlying causes of national populism have not disappeared. Our times continue to be shaped by immigration, terrorism, and the cultural distance between voters without college degrees and the credentialed elites who govern them. It would be a mistake to follow the advice of the Bloomberg editor who wrote in a recent headline, “Populism Will Probably Just Go Away Soon, So Relax.” On the contrary: The populist epoch may be only beginning.”

“A Season of Caesars”, by Larry Diamond in the American Interest

SURPRISE
“Unlike their predecessors, today’s authoritarians lack a common ideology. But once in power, they behave in remarkably similar ways…
“In particular, they pursue what I have called in my book, “Ill Winds, the Autocrats’ Twelve-Step Program”. While the style and sequence may vary from country to country, it looks something like this:
• Demonize the political opposition as illegitimate and unpatriotic
• Undermine independent courts
• Attack the independence of the media
• Gain control of any public broadcasting
• Impose government control of the internet
• Subdue other elements of civil society
• Intimidate the business community
• Enrich a new class of crony capitalists
• Assert partisan control over the civic service and the security apparatus
• Gerrymander districts and rig electoral rules
• Gain control over the administration of elections
• Repeat 1-11 ever more vigorously”

Recent articles on political protests erupting around the world hint at similar underlying causes.

See also Martin Gurri’s book, “The Revolt of the Public and the Crisis of Authority in the New Millennium”

“The Roots of Chile’s Social Discontent” (FT 7Nov19): “Rather than inequality, the causes lie in an extreme disconnect between the public and the political system.”

“[Deputy Leader] Tom Watson’s Surprise [Retirement] Signals Surrender of Centrist Labor”, FT 6Nov19… “Germany’s Ruling Coalition Shaken by New SPD Election” that puts leftwing leaders in power… “SPD Result Heralds the End of Germany’s Grand Coalition” [and] “looks likely to hasten Merkel’s exit and bring Green Party into power.” FT 1Dec19…
“The Collapse of German Centrism: Rhetorical Concessions Alone Won’t Swamp the Populists’ Momentum”, by Peter Kuras… “Macron jousts with hometown foes as discontent grows.” FT 22Nov19…

“The Age of Leaderless Revolution”, (CSIS 1Nov19) notes that, “Mass protest movements are roiling politics around the globe…Citizen grievances are many but share a common theme: the failure of ruling elites and political institutions to meet expectations of dignity and betterment. Protesters are frustrated with perceived corruption and economic inequality. Often young, angry, and urban, protesters are not an organized opposition proposing the substitution of their party or ideology for an existing one but a leaderless movement demanding their voices are heard.

“In some cases, protesters’ demands are clear; more often they are muddled. Across the board the aggrieved want change in systems that feel outdated, broken, or nonresponsive.”

Similarly, in “Protests are Everywhere. The World is Rising Up”, the Globe and Mail, (23Nov19) observes that, “from Hong Kong to Iraq, Bolivia to Spain, Lebanon to Chile and Ecuador, 2019 has been a year of widespread anti-government unrest…The only thing that is certain in these moments of contagious social protest is that no one knows with certainty what will happen next. When the status quo is faced with vehement demands for change, many previously dormant (or restrained) forces actively vie to influence the course of events. The outcome is always unpredictable.”

“How America Ends” by Yoni Applebaum

SURPRISE
Applebaum begins his excellent article with a pointed, and essential question: “A tectonic demographic shift is under way. Can the country hold together?”

He argues that, “For most of the 20th century, parties and candidates in the United States have competed in elections with the understanding that electoral defeats are neither permanent nor intolerable. The losers could accept the result, adjust their ideas and coalitions, and move on to fight in the next election. Ideas and policies would be contested, sometimes viciously, but however heated the rhetoric got, defeat was not generally equated with political annihilation. The stakes could feel high, but rarely existential. In recent years, however, beginning before the election of Donald Trump and accelerating since, that has changed.”

He later observes that, “as partisans have drifted apart geographically and ideologically, they’ve become more hostile towards each other…[And] as hostility rises, trust in political institutions, and in one another, is declining.”

Applebaum claims that the biggest driver of these trends may be demographic change. Specifically, whites confronting the prospect of the United States becoming a “minority majority” nation have caused them to “lose faith that they can win elections in the future. And with this comes dark possibilities.”

As he notes, “a conservatism defined by ideas can hold its own against progressivism, winning converts to its principles and evolving with each generation. A conservatism defined by identity reduces the complex calculus of politics to a simple arithmetic question—and at some point, the numbers no longer add up.”

Applebaum then goes on to present a number of historical examples where the demise of the political center right led to disastrous consequences. As he notes, “the United States possesses a strong radical tradition, but its most successful social movements have generally adopted the language of conservatism, framing their calls for change as an expression of America’s founding ideals rather than as a rejection of them…The conservative strands of America’s political heritage—a bias in favor of continuity, a love for traditions and institutions, a healthy skepticism of sharp departures—provide the nation with a requisite ballast. America is at once a land of continual change and a nation of strong continuities.”

Unfortunately, the weakening of the center right is a pattern we arguably see being repeated today yet again in Europe, not just in the United State, where Applebaum observes that “Trumpism has deprioritized conservative ideas and principles in favor of ethno-nationalism.” He concludes that a critical uncertainty facing American politics is whether the center right’s popular appeal can be restored.

“Trump’s Defenders Have No Defense”, by Peggy Noonan

I can’t help but agree with former Reagan speechwriter Noonan’s common sense view about the best way for the impeachment process to proceed. But I also doubt that current political leaders in Washington will follow her advice, and will instead end up further hardening the nation’s partisan divisions ahead of the 2020 election.

“Look", says Noonan, "the case has been made. Almost everything in the impeachment hearings this week fleshed out and backed up the charge that President Trump muscled Ukraine for political gain. The pending question is what precisely the House and its Democratic majority will decide to include in the articles of impeachment, what statutes or standards they will assert the president violated.

“What was said consistently undermined Mr. Trump’s case, but more deadly was what has never been said. In the two months since Speaker Nancy Pelosi announced a formal impeachment inquiry was under way and the two weeks since the Intelligence Committee’s public hearings began, no one, even in the White House, has said anything like, “He wouldn’t do that!” or “That would be so unlike him.” His best friends know he would do it and it’s exactly like him”…

“As to impeachment itself, the case has been so clearly made you wonder what exactly the Senate will be left doing. How will they hold a lengthy trial with a case this clear? Who exactly will be the president’s witnesses, those who’d testify he didn’t do what he appears to have done, and would never do it?” …

“A full-blown trial on charges most everyone will believe are true, and with an election in less than a year, will seem absurd to all but diehards and do the country no good. So the reasonable guess is Republican senators will call to let the people decide. In a divided country this is the right call.”

As a veteran of both the Nixon and Clinton impeachments, what I have found most significant is how president Trump’s approval rating has remained steady at about 42% throughout the impeachment process. This contrasts with support for Nixon’s impeachment, which was nearly 60% by the time the Supreme Court ordered the release of the famous “Watergate Tapes.” This is an important indicator of just how deep social and partisan divides have become in the United States.

Boris Johnson and the Conservative Party delivered a stunning win in the UK’s 12 December election, and now control a sufficient parliamentary majority to, as they said in the campaign, “get Brexit done.”

SURPRISE
Beyond Brexit (which will now happen), and the challenges it will create for the EU (which will be negotiating a trade treaty with the UK while the US is also doing the same thing), the most important lesson from the Tories surprisingly strong election win was the political dynamics that were at work.

Under Jeremy Corbyn’s leadership, the hard left has taken over the Labor Party, which ran on a platform of nationalization, punitive taxation, and identity politics (with an anti-Semitic stench). All of these were repudiated by the electorate, including many traditional Labor voters, especially in the Midlands and the North. The Tories won by shifting leftward on economic issues while remaining well to the right of the Corbynistas on social issues.

Many commentators have noted that this positioning could reinvigorate centrist parties in other Western nations.
Whether Labor’s loss will serve as a warning to US progressives who are seeking to nominate a relatively left wing Democratic candidate in 2020 remains to be seen, as does the Republican party’s willingness and ability to match the Tories’ leftward shift on key economic issues.

Finally, it is as yet unclear what will happen to Labor moderates. If they cannot seize control of the party machinery from the hard left, it appears that they have no choice (if the UK is to have a true opposition party) than to join with the Liberal Democrats to form a new center-left party.

The UK is now having an election…

The LibDems promise to somehow deliver Remain, and keep the UK in the EU. That’s a tough sell after the Brexit referendum. Labor promises a socialist paradise, with widespread nationalization, very high taxes on “the rich”. And the Tories promise Brexit, on the terms of the latest proposal by PM Boris Johnson that the EU agreed, which will leave Northern Ireland de facto inside the EU customs union, and the rest of the UK outside it. A Corbyn government would radically change the UK; so too may Brexit. What would happen with a hung parliament with the LibDems holding the swing votes remains a mystery. At this point, all we can say is that uncertainty has risen, which will have further negative effects on both the UK and quite likely the global economy, because of the outsized role the southeast of England plays in it.

While in Washington, DC, there is both a World Series championship and an impeachment.

It seems a foregone conclusion that Trump will be impeached by the House. Whether he will be convicted by the Senate seems much less certain at this point. We don’t share the view of those commentators who believe this is nearly impossible. Both the impulsive abandonment of the Kurds and the naked extortion of the Ukraine call will likely make the final result of the Senate trial far closer than many currently expect. That said, the Democrats are not helping themselves when some of their leading presidential candidates keep moving further to the left, and thereby reminding many swing state voters why they voted for Trump.

“The coming alliance of populists and greens”, by Janan Ganesh, FT 9Oct19

Surprise
The author notes that, “At the core of both movements is a mistrust of capitalism…On the face of it, populists and environmentalists are the two least reconcilable movements in world politics. One defines itself against transnational governance and the other counts on it to abate climate change. One electrifies the middle-aged and older while the other mobilises the young…Such is the surface tension that we miss what unites the two sides. At the core of both movements is a mistrust of capitalism. For the populist, it undermines nationhood. For the green, it imperils all life…Given time, the intellectual overlap might be the stuff of a political coalition…Time is likely to bring about a more coherent delineation, between those who are at ease with modernity and those who would like to unwind it some. If so, populists and environmentalists could find themselves on the same side.”

The Canadian election highlighted the political consequences of aggressive environmentalism

To be sure, the Liberals and Justin Trudeau won re-election (albeit with a minority government) – but did not win a single Commons seat in the nation’s energy heartland of Alberta and Saskatchewan, whose economies have paid a heavy price for increasingly stringent environmental regulation. In the aftermath of the election, a long dormant Alberta independence movement (which at this point has no chance of success) sprang back again to life. This is likely a harbinger of conflicts to come, which will be made more intense by both a deep economic downturn and political cultures in other nations that are less moderate than Canada’s.

“Chile’s crisis was decades in the making”, by Jennifer Pribble, FT, 28Oct19

See also, “Why Latin American was Primed to Explode”, by Naim and Winter, Foreign Affairs, 29Oct19

The author opens her column with this insightful line (and I say this as someone who first lived in Argentina in 1975): “The chaotic protests unfolding across Chile are a crisis that has been waiting to happen since the end of General Augusto Pinochet’s 17-year dictatorship in 1990…It is a tale of rapid but unequal economic growth; of a state that has withdrawn from its regulatory and social policy roles; and of a political class that has been unwilling to transform the country’s economic and social model. Chile’s experience is an object lesson in the dangers of ignoring inequality and the importance of building inclusive political institutions” …

Today the nation faces, “an increasingly polarised electorate with a strong left wing and profound frustrations over inequality… [and] a citizenry that had lost faith in political parties and elites. The combination of a delegitimised political system and a frustrated electorate has made the current government vulnerable.”

This is not the last time the media will likely recount this story line.

“The Perils of Downscale Political Parties”, by Michael Barone

Surprise
Barone is the author of the multi-edition Almanac of American Politics, and I have read his insightful commentary on this subject since the 1970s. In his latest article, he notes that, “The Republican Party has always been centered around a constituency of people thought of as typical Americans who are not by themselves a majority. The Democratic Party has always been a coalition of disparate peoples not considered typical Americans but who, when they stick together, can form a majority.”

“While the Democrats’ current problems stem from “the emergence of affluent white college graduates — gentry liberals — as the dominant force in both raising money and generating ideas…the Republicans' travails arise also from the changing character in their core constituency. From the Eisenhower years to the Reagan years, it was centered on the relatively affluent. Since the 1990s, it has been changing, tilting more toward the religiously devout and economically downscale.

“That change, as Ernest Hemingway said of bankruptcy, happened first gradually and then suddenly, starting with the baby-boom tussles of Bill Clinton and Newt Gingrich and then climaxing in the baby-boom Armageddon between Hillary Clinton and Donald Trump… This downscale Republican Party supports President Trump even more steadfastly than 1970s Republicans supported Richard Nixon. But a downscale party attracts articulate attackers and lacks institutional support.”

Barone goes on to observe that, “Disdain for downscale parties is nothing new. Sixty years ago, when the Democratic Party was dominated by Southern whites and Northern factory workers, major newsmagazines and newspapers were complacently Republican and snidely condescending about Democrats. Arthur Schlesinger Jr.'s 1940s and 1950s writings are laced with a defensive awareness of articulate readers' disdain for the Democratic Party that corresponds to many conservative writes' attitudes today…

“What's new is the downscale party's detractors' willingness to challenge the legitimacy of its victories — something Richard Nixon and Al Gore refused to do in 1960 and 2000 — and, even more, their sense of self-righteousness in the notion of overturning an election result.”

“The battle cry of the politically homeless”, by Bridge Phetasy, Spectator USA, 13Oct19

This article captures a perspective on US politics that is largely ignored by the media and extreme elements in both parties.
“Like millions of other Americans, I’m exhausted…Politically disinterested citizens like me have increasingly been pulled off the sidelines and into this incredibly divisive political climate, unwilling combatants in a battle fought among fiercely partisan tribes…

“I understand why the silent majority is uneasy. They’re not wrong to worry that sharing their opinion on Facebook could cost them their livelihood. Most people are just trying to raise their families and pay their bills, and pine for the days when they only had to think about politics every few years. Now, millions of independent thinkers – recently polled at almost 70 percent of the American population and labeled ‘the exhausted majority’ — are harboring intense feelings of political homelessness and ideological isolation…Both parties demand totalitarian-like devotion to their ideology and if you’re indifferent, apathetic or nuanced in your approach to politics, you’ll end up in the wasteland of the center — tribeless, unprotected and increasingly insulated.”

“Why rigged capitalism is damaging liberal democracy”, by Martin Wolf, FT 17Sep19

See also, “Yes, capitalism is broken. To recover, liberals must eat humble pie”, by Richard Reeves, from Brookings

The Financial Times economics columnist offers a concise analysis of the root causes of declining productivity, rising inequality, and increasingly frequent financial shocks, and the threat they pose to the legitimacy of liberal democracy, institutions, and elites. He concludes that the rise of rentier capitalism and financialization are critical root causes of the challenges we face today. Unfortunately, neither will be easy to reverse.

“Why rightwing populism has radicalized”, by Simon Kuper, Financial Times 11Sep19
and

“Is Populism Here to Stay?” by Gillian Tett FT 12Sep19

Surprise
Kuper begins by defining his terms: “Conservatives are the traditional centre-right. Populists (whether left or right) claim to represent, in Mudde’s definition, “the pure people” against “the corrupt elite”… Meanwhile, the generally smaller “extreme right” is violent and anti-democratic — think of neo-Nazis and other street thugs.”

Kuper goes on to claim that, “often, the far right takes power as a conservative-populist coalition, cheered on by the extreme right. The centre-right lends the coalition voters, respectability and the electoral magic word “conservative”. But over time, the conservatives usually get sidelined as the government radicalises. Why?”

“Populism is majoritarian: once the people have spoken in an election or referendum, their will must be done, fast…Populist topics such as immigration, Islamophobia and anti-elitism come to dominate political debate, and so seem urgently in need of solving…Rightwing populist messages usually prove more popular than conservative ones…Populism in power emboldens the previously tiny, marginal extreme right…Taboos crumble as populist language becomes normalised…”

Tett calls our attention to “a new Ipsos survey. It suggests that 64 per cent of people around the world aged 16-74 currently feel a need for “a strong leader to take their country back from the rich and powerful”, while 49 per cent feel that “to fix the country we need a strong leader willing to break the rules” and some 62 per cent “feel that experts don’t understand the lives of people like them”…

“About two-thirds think the economy is rigged in favour of the rich and powerful, and that the system is broken. The good news is that these numbers have not dramatically worsened since 2016. The bad news is that they are still high.”

“American Renewal: The Real Conflict Is Not Racial Or Sexual, It's Between The Ascendant Rich Elites And The Rest Of Us”, by Joel Kotkin

Kotkin calls attention to the deeper drivers of rising frustration and conflict in many Western nations.

“Despite the media’s obsession on gender, race and sexual orientation, the real and determining divide in America and other advanced countries lies in the growing conflict between the ascendant upper class and the vast, and increasingly embattled, middle and working classes…These dynamics are unsettling our politics to the core. Both the gentry left, funded largely by Wall Street and Silicon Valley, and the libertarian right, have been slow to recognize that they are, in de Tocqueville’s term, “sitting on a volcano ready to explode.” The middle class everywhere in the world, notes a recent OECD report , is under assault, and shrinking in most places while prospects for upward mobility for the working class also declines.”

The implications of impeachment: the next US President may be a woman – but one named Nikki, not Elizabeth.

Surprise
The “Ukrainian Call Scandal” was the final straw that finally convinced US House Democrats to move forward with the impeachment of Donald Trump. That a bill of impeachment will be approved is almost certain. Whether the US Senate will can muster the 67 votes needed to convict (which would force Trump from office) is closer to a toss-up, though one that the subsequent abandonment of the Kurds will likely make it much easier.

That leads to another critical question: If Mike Pence becomes president, will someone (say, Nikki Haley or Mitt Romney) challenge him in a Republican primary? Haley might well be a much more centrist and formidable candidate than the current crop of Democratic candidates are expecting to face.

This raises an interesting question for Congressional Democrats – how long will they try to drag out the articles of impeachment hearings in the House, and the subsequent trial by the Senate? Our bet is that they will likely go for longer, in order to limit the ability of Republican challengers to organize and thus make it more likely their candidate will face Mike Pence in 2020. However, that will also give Trump more time to counterattack, which will almost certainly increase political uncertainty.

“To Regain Policy Competence: The Software of Public Problem Solving”, by Philip Zelikow

Surprise
This is an extremely insightful essay on one of the least understood root causes of the current crisis of political legitimacy, not just in the US, but in other countries as well. Zelikow notes, that, “American policymaking has declined over the past several decades, but it is something that can be regained. It is not ephemeral or lost to the mists of time. The skills needed to tackle public problem-solving are specific and cultural — and they are teachable…”

“Policymaking is a discipline, a craft, and a profession. Policymakers apply specialized knowledge — about other countries, politics, diplomacy, conflict, economics, public health, and more — to the practical solution of public problems. Effective policymaking is difficult. The “hardware” of policymaking — the tools and structures of government that frame the possibilities for useful work — are obviously important.”

“Less obvious is that policy performance in practice often rests more on the “software” of public problem-solving: the way people size up problems, design actions, and implement policy. In other words, the quality of the policymaking.”

“Unfavorable opinions of China have reached a 14-year high. Today, 60% of Americans have an unfavorable opinion of China, up from 47% in 2018 and at the highest level since Pew Research Center began asking the question. Americans also increasingly see China as a threat. Around a quarter of Americans (24%) name China as the country or group that poses the greatest threat to the U.S. in the future, twice as many as said the same in 2007. China is tied with Russia (24%) as the country or group most cited as a threat to the U.S…”

“While both Republicans and Democrats have unfavorable views of China, Republicans’ opinions are somewhat more negative: 70% of Republicans and independents who lean Republican have an unfavorable opinion of China today, compared with 59% of Democrats and Democratic-leaning independents.”

“The Limits of My Conservatism”, by Andrew Sullivan in New York magazine

Sullivan writes that the “distinction between a reactionary and a conservative is an important in this particular moment.” He defines this “core divide” as “between those who see the social, cultural, and demographic changes of the last few decades as requiring an assault and reversal, and those who seek to reform its excesses, manage its unintended consequences, but otherwise live with it.” The first Sullivan calls a reactionary; the second, a conservative.

He goes on to opine that, “a conservative is worried about the scale and pace of change, its unintended consequences, and its excesses, but he’s still comfortable with change. Nothing is ever fixed. No nation stays the same. Culture mutates and mashes things up. And in America, change has always been a motor engine in a restless continent…”

“One question conservatives are always asking themselves is whether these changes can be integrated successfully into a new social fabric, so we do not lose cohesion as a nation; another is whether this change is largely being imposed from above by ideological fiat, or whether it’s emerging from below as part of an emerging spontaneous order…”

Sullivan goes on to observe that, “A conservative who becomes fixated on the contemporary left’s attempt to transform traditional society, and who views its zeal in remaking America as an existential crisis, can decide that in this war, there can be no neutrality or passivity or compromise.” He concludes that “The smugness, self-righteousness, and dogmatism of the current left is a Miracle-Gro of reactionism.”

In Germany, state elections in Brandenberg and Saxony confirmed the shrinkage of the center left (Social Democrats) and center right (Christian Democrats) parties, with gains for both the greens (on the left) and AFD (on the right).

While neither the Greens nor the AFD made a decisive breakthrough, this election provided further evidence of fragmentation in German politics, which will very likely continue as the economy worsens.

In the UK, the Corbyn led Labour party proposed that, if it takes power, it would seize ten percent of the shares in many companies and redistribute them to workers (“a 300 billion pound raid on shareholders” according to FT calculations), while banning financial services employee bonuses.

In the coming UK election, the UK will face a stark choice between a Conservative Party that is forcing out (“deselecting” to run for their current office) its moderate “Remainer” MPs, Nigel Farage’s Brexit party, Corbyn’s Labour, and the Liberal Democrats, which of late have picked up a number of moderate Labout MPs who have left the party out of disgust with its growing anti-Semitism.

All signs point to a transformative election and realignment of UK politics.

SURPRISE
As the Financial Times noted on 2 Sep19 “At the heart of everything is one word: redistribution. Redistribution of income, assets, ownership and power. The mission is to shift power from capital to labour, wresting control from shareholders, landlords and other vested interests and putting it in the hands of workers, consumers and tenants. “We have to rewrite the rules of our economy,” says [Shadow Chancellor] John McDonnell” (“Jeremy Corbyn’s Plan to Rewrite the Rules of the UK Economy”).

This has provoked strong reactions. “To [Corbyn’s] opponents and those likely to be at the sharp end of such a programme — high-earners, business owners, investors and landlords, it is alarming. “Whenever we hold events I always ask, ‘what are you more worried about, a Corbyn government or a no-deal Brexit?’” says one business lobbyist. “Now the universal answer is Corbyn.””

“How to Confront and Advancing Threat from China: Getting Tough on Trade is Just the First Step”, by former UN Ambassador and SC Governor Nikki Haley in Foreign Affairs

Haley is almost certainly positioning herself for a possible run for the presidency either in 2024 or, if for some reason Donald Trump does not or cannot run, then as early as the 2020 election. The appearance of her article in Foreign Affairs is a clear bid to seize centrist support.

Her message was also clear, and captures much of the new US conventional wisdom about China:

“The most important international development of the last two decades has been the rise of China as a great economic and military power. As China transformed, many Western scholars and policymakers predicted that economic reform and integration into the world economy would force the country to liberalize politically and become a “responsible stakeholder” in the international system. The idea, sometimes called “convergence theory,” was that as China grew wealthier, it would become more like the United States.

“The theory was comforting, but it did not pan out. China grew economically without democratizing. Instead its government became more ideological and repressive, with military ambitions that are not just regional and defensive but global and designed to intimidate. And as the distinction between civilian and military technology gradually eroded across the globe, Chinese President Xi Jinping made it official policy for Chinese companies to put all technology at the disposal of China’s military. As the Princeton University scholar Aaron Friedberg has written, ‘What Xi Jinping and his colleagues have in mind is not a transitional phase of authoritarian rule to be followed by eventual liberalization, but an efficient, technologically empowered, and permanent one-party dictatorship.’ “

“Let’s face it: Xi has killed the notion of convergence”…

"China poses intellectual, technological, political, diplomatic, and military challenges to the United States. The necessary response is similarly multifaceted, requiring action in fields as disparate as intelligence, law enforcement, private business, and higher education. In recent years, many problems have been described as requiring “whole of government” responses. China requires a response that is not just “whole of government” but “whole of nation.” Fortunately, there is support across the political spectrum for countering China’s new aggressive policies. We must act now, before it’s too late. The stakes are high. They could be life or death.”

“Algorithmic Governance and Political Legitimacy” by Matthew Crawford in American Affairs

SURPRISE
This is an extremely thought provoking essay about the impact of wider use of algorithms by governments and other sources of authority on their perceived legitimacy. Given the issue we already have with declining institutional legitimacy, Crawford makes important points about what may lie ahead.

“In ever more areas of life, algorithms are coming to substitute for judgment exercised by identifiable human beings who can be held to account. The rationale offered is that automated decision-making will be more reliable. But a further attraction is that it serves to insulate various forms of power from popular pressures.

“Our readiness to acquiesce in the conceit of authorless control is surely due in part to our ideal of procedural fairness, which demands that individual discretion exercised by those in power should be replaced with rules whenever possible, because authority will inevitably be abused. This is the original core of liberalism, dating from the English Revolution.

Mechanized judgment resembles liberal proceduralism. It relies on our habit of deference to rules, and our suspicion of visible, personified authority. But its effect is to erode precisely those procedural liberties that are the great accomplishment of the liberal tradition, and to place authority beyond scrutiny. I mean “authority” in the broadest sense, including our interactions with outsized commercial entities that play a quasi-governmental role in our lives…One reason why algorithms have become attractive to elites is that they can be used to install the automated enforcement of cutting-edge social norms...Locating the authority of evolving social norms in a computer will serve to provide a sheen of objectivity… “

“A second problem is that decisions made by algorithm are often not explainable, even by those who wrote the algorithm, and for that reason cannot win rational assent. This is the more fundamental problem posed by mechanized decision making, as it touches on the basis of political legitimacy in any liberal regime.”

“Job Growth in Trump Land is Dead in the Water” by Rex Nutting

SURPRISE
“Since the economy began adding jobs after the Great Recession nine years ago, about 21.5 million jobs have been created in the United States, the second-best stretch of hiring in the nation’s history, second only to the 1990s.

“But job growth isn’t being spread evenly across the land. Most of the new jobs have been located in a just a few dozen large and dynamic cities, leaving slower-growing cities, small towns and rural areas — where about half of Americans live — far behind.”

In light of this, it isn’t hard to see why Donald Trump was pushing the Federal Reserve for a rate cut, or why he may well push to end the trade war with China as we get closer to the 2020 election. It also likely explains his switch to more populist nationalist themes at his recent campaign rallies. Whether a weakening economy or Trump’s new rhetoric will create an opening for a Democrat to win in 2020 still likely depends on the extent to which whoever is nominated campaigns on (or Trump convinces voters is associated with) more extreme progressive positions that currently have low levels of polling support among likely voters.

“Are Western democracies becoming ungovernable?”, the Economist

SURPRISE
Useful new indicators.

“Ungovernability can be thought of in four ways. No Western country is ungovernable in every one. But there are a few features that exist in more than one country and a few countries that look ungovernable in more than one sense…

“First, some countries cannot form a stable government either because (in first-past-the-post systems) the largest party does not command a majority in parliament, or because (in countries with coalitions) parties cannot organise a stable alliance on the basis of election results…

[Second], “ungovernability can mean that governments fail to pass basic laws on which the operations of the state depend…

[Third] “is the systematic corruption of constitutional norms, making political processes haphazard or arbitrary…

[Fourth], “the past year has seen a return to the streets of mass demonstrations.”

“Why Conservatives Struggle with Identify Politics”, by Joshua Mitchell in National Affairs

SURPRISE
This thought-provoking essay presents a new model for thinking about identity politics and the potential dangers it poses.

Mitchell begins by observing that, “the modern conservative movement that emerged in the 1950s has been and remains transfixed on the twin threats of “progressivism” and “Marxism.” Its response to progressivism has been to remind the American public, with limited success, of the constitutional constraints placed on the federal government by the founding fathers. Its answer to Marxism has been to remind the American public, with modest success, that liberal and conservative ideas about commerce, tradition, law, God, and freedom are at odds with a grisly 20th-century political movement whose death toll measures in the tens of millions.”

He goes on to claim that, “the post 2016 battle for the soul of America will not be fought over the ghosts of progressivism or Marxism, but rather over identity politics, which most conservatives ignore or, finding it irksome, wish would just go away”, because “they lack a clear understanding of the danger” it poses…

”Conservatives continue to defend market commerce and tradition against the ghosts of progressivism and Marxism, but their defenses will not avail against identity politics.”

In Mitchell’s model, the new concept of identify refers to “an unpayable debt one kind of group owes another as the result of an unforgiveable wrong. It describes a permanent relationship of transgressor group and innocent victim group…Whatever the innocents want to accomplish in politics ls legitimate because the new basis for political legitimacy is innocence” … and transgressor groups [white males being the worst] have “no legitimate voice.”

In the United States, the fist debates between Democratic presidential candidates raised doubts about their ability to defeat Donald Trump in 2020, especially if the economy remains healthy.

Beyond the open question of which candidates have the mix of toughness, wit, and humor to successfully parry Trump’s inevitably personal attacks during a campaign, the more painful observation was that with only a few exceptions (by thus far minor players), all the candidates sought to outdo each other in reiterating their support for positions that seem well to the left of the American political mainstream (e.g., on immigration, abortion, healthcare, etc.).

As the Financial Times’ Ed Luce subsequently wrote in a column of the same title, “Running Down the Clock on Trump is a Risky Bet” – America’s allies should hope for the best but work far harder to prepare for the worst.

“America’s White Saviors”

“White liberals are leading a ‘woke’ revolution that is transforming American politics and making Democrats increasingly uneasy with Jewish political power”

by Zach Goldberg in The Tablet

SURPRISE
This is the single best analysis I have read of how a relatively small group of affluent, urban, coastal liberals have had such a large impact on campus and elite culture, as well as the positions taken by most Democratic presidential candidates.

As Goldberg notes, “A sea change has taken place in American political life. The force driving this change is the digital era style of moral politics known as “wokeness,” a phenomenon that has become pervasive in recent years and yet remains elusive as even experts struggle to give it a clear definition and accurately measure its impact…

"In reality, “wokeness”—a term that originated in black popular culture—is a broad euphemism for a more narrow phenomenon: the rapidly changing political ideology of white liberals that is remaking American politics…Over the past decade, the baseline attitudes expressed by white liberals on racial and social justice questions have become radically more liberal…”

“As woke ideology has accelerated, a growing faction of white liberals have pulled away from the average opinions held by the rest of the coalition of Democratic voters—including minority groups in the party. The revolution in moral sentiment among this one segment of American voters has led to a cascade of consequences ranging from changes in the norms and attitudes expressed in media and popular culture, to the adoption of new political rhetoric and electoral strategies of the Democratic Party. Nor has this occurred in a vacuum on the left as the initiatives set in motion by white liberals have, in turn, provoked responses and countermeasures from conservatives and Republicans.”

Two other articles highlight growing problems for two other emergent political factions.

In “The Limits of Outrage Politics”, Stephen Paduano notes the “precipitous decline” of France’s Yellow Vest movement, and notes the parallels to the previous collapse of Occupy Wall Street. As he notes, outrage alone is not reliable basis for sustaining a political movement.

Joel Kotkin makes the same point about the emergent populist nationalist right, in his column, “Needed: A Positive Nationalism”.

In a complex and uncertain world best by multiple challenges to the middle class, it is not enough to say what you are against; voters must also understand what you are for, how it will benefit them, and how you propose to implement your plans.

As Kotkin notes, “this requires, among other things, going beyond the right’s blind allegiance to free market ideology, which fails to recognize the trends that lead to both increased inequality and weakening moral structure. What is needed is not ideological homilies but realistic alternatives to polices such as the Green New Deal.”

In the Financial Times, Martin Sandbu makes a number of important observations in his column, “Europe’s Green surge matters more than the rise of the far right” (5Jun)

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“Half a century after issue-based movements first began to challenge the politics of mass movements born from industrial society, Green parties have been vaulted to the electoral frontline by one of the biggest issues imaginable: the prospect of devastating climate change…

“Environmental policy lands right in the middle of the faultline between those who support and those who oppose liberal democracy and the rules-based international order. Put very simply, the policies needed to make our economies sustainable are also ones that pile new burdens on the losers from the economic changes of the last 40 years.

“For a greener economy, there is no way round making carbon-intensive products and activities much more expensive, through an outright carbon tax or policies that mimic its effects…”

The Greens are alert to this challenge: the need for a “just transition” to a low-carbon economy is at the centre of their campaigns. But what does it mean in practice? There are two broad answers.

“The first is to combine carbon pricing and similar taxes with radical redistribution to favour the vulnerable. The ‘carbon tax and dividend’ model, where levies to discourage pollution are returned in lump sums to the population rather than funding government budgets, is gaining support across Europe… The second is the notion of a “Green New Deal”, which is also energising parts of the US left. The basic idea is to pursue sustainability with massively increased public investment.”

“America’s Asylum System is Profoundly Broken” by David Frum in The Atlantic

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Frum’s excellent analysis cuts to the heart of the current political conflict over immigration in the United States: the progressive weakening of its rules governing the granting of asylum, which are now essentially without meaning (unlike the rules governing refugees and immigrants applying through normal channels).

Frum concludes that, “the asylum system is profoundly broken, and the only way to make it work is to begin with fundamental questions. If poverty, unemployment, crime, spousal abuse, and other non-state-imposed forms of human suffering justify an asylum claim, then there are at least 2 billion people on earth eligible if they can make it over the border…Until the United States establishes and articulates clear rules, the crisis at the border will continue.”

Of equal if not greater importance is the fact that this article appeared in the Atlantic, which is generally considered a center-left publication.

Two new surveys on either side of the Atlantic provided fresh evidence of growing frustration with the current state of politics and governance.

In “Divided, Pessimistic, Angry: Survey Reveals Bleak Mood Of Pre Brexit”, the Guardian’s Nosheen Iqbal reports that, “Britain is a more polarised and pessimistic nation than it has been for decades, according to a survey that reveals a country torn apart by social class, geography and Brexit.”

“The survey by BritainThinks reveals an astonishing lack of faith in the political system among the British people, with less than 6% believing their politicians understand them. Some 75% say that UK politics is not fit for purpose… Some 83% feel let down by the political establishment and almost three-quarters (73%) believe the country has become an international laughing stock and that British values are in decline… The poll also found an extraordinary gulf in levels of optimism between the generations: while 52% of those aged over 65 said they felt optimistic about the country’s future, this dropped to just 24% of under-34s.”

In the United States, Pew released the findings of its latest poll under the title “Public Highly Critical of State of Political Discourse in the U.S.” They key finding was that, “most Americans say political debate in the U.S. has become more negative, and less respectful, fact-based, and substantive.”

“The Perception Gap: How False Impressions are Pulling Americans Apart”, by the organization “More in Common.”

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Key findings in this fascinating new report include, (1) “Democrats and Republicans imagine that almost twice as many people on the other side hold extreme views than really do”; (2) “Americans with more partisan views hold more exaggerated views of their opponents”; (3) “Consumption of most forms of media is associated with a wider perception gap”; (4) “Higher education among Democrats, but not Republicans, corresponds to a wider perception gap (higher educated Democrats, but not Republicans, are also more likely to say that ‘almost all’ of their friends share their political views); and (5) “The wider people’s perception gap, the more likely they are to attribute negative personal qualities to their opponents.”

The authors conclude that, “while this research reveals disturbing trends, the overall message is positive: Americans often have more in common than they believe…in reality, the results of this study suggest that Americans imagine themselves to be far more divided than they really are.”

The past month has seen a number of important political developments around the world that help to bring key trends and dynamics into better focus.

In Australia, the (conservative) Liberal party won a surprise win over the Labor party…

As Tyler Cowen noted, “Sometimes political revolutions occur right before our eyes without us quite realizing it. I think that’s what’s been happening over the last few weeks around the world, and the message is clear: The populist “New Right” isn’t going away anytime soon, and the rise of the “New Left” is exaggerated” (“The New Right is Beating the New Left. Everywhere”, Bloomberg, 20May19).

Writing in Quilette, Claire Lehman observed that, “The swing against Labor was particularly pronounced in the northeastern state of Queensland—which is more rural and socially conservative than the rest of Australia. Many of Queensland’s working-class voters opposed Labor’s greener-than-thou climate-change policies, not a surprise given that the state generates half of all the metallurgical coal burned in the world’s blast furnaces. Queensland’s rejection of Labor carried a particularly painful symbolic sting for [Labor party leader Bill} Shorten, given that this is the part of Australia where his party was founded by 19 century sheep shearers meeting under a ghost gum tree. In 1899, the world’s "first Labor government was sworn into the Queensland parliament.

“Shorten’s “wipe-out” in Queensland demonstrates what has become of the party’s brand among working-class people 120 years later…Picture a dinner party where half the guests are university graduates with prestigious white-collar jobs, with the other half consisting of people who are trade workers, barmaids, cleaners and labourers. While one side of the table trades racy jokes and uninhibited banter, the other half tut-tuts this “problematic” discourse.

“These two groups both represent traditional constituencies of mainstream centre-left parties—including the Labour Party in the UK, the Democrats in the United States, and the NDP in Canada. Yet they have increasingly divergent attitudes and interests—even if champagne socialists paper over these differences with airy slogans about allyship and solidarity…

“Progressive politicians like to assume that, on election day at least, blue-collar workers and urban progressives will bridge their differences, and make common cause to support leftist economic policies. This assumption might once have been warranted. But it certainly isn’t now—in large part because the intellectuals, activists and media pundits who present the most visible face of modern leftism are the same people openly attacking the values and cultural tastes of working and middle-class voters.

“And thanks to social media (and the caustic news-media culture that social media has encouraged and normalized), these attacks are no longer confined to dinner-party titterings and university lecture halls…

“What the election actually shows us is that the so-called quiet Australians, whether they are tradies (to use the Australian term) in Penrith, retirees in Bundaberg, or small business owners in Newcastle, are tired of incessant scolding from their purported superiors. Condescension isn’t a good look for a political movement.”

In elections for the European Union parliament, centrist parties lost ground to both extremes

Across many countries, traditional center left (e.g., Social Democrat) and center right (e.g., Conservative and Christian Democrat) parties suffered significant losses, with parties of the right (populist, nationalist) and parties of the left (greens) gaining at their expense. Many commentators took this as a sign of continuing middle class frustration with the leadership of traditional elites, and the lack of appealing policy solutions offered by the centrist parties. For example, see “The Slow Death of Europe’s Traditional Center”, by Yasmeen Serhan in The Atlantic 27May19

“Five Issue Positions that Could Blow Up a Democratic Campaign”, by Elaine Kamarck from Brookings

“So far this election cycle five issues have arisen that could blow up a Democratic candidate for president, a Democratic candidate for dog-catcher and everyone in between. The only exceptions are those Democratic candidates who live in Vermont or who live in the 17 congressional districts (approximately 4 percent of the House of Representatives,) that are so solidly Democratic that George Washington reincarnated as a Republican couldn’t win an election: (1) Allowing prisoners to vote; (2) Third trimester abortion; (3) Abolishing private health insurance; (4) Abolishing the Immigration and Customs Enforcement Service (ICE); and (5) Embracing Socialism.

“America Adrift: How the U.S. Foreign Policy Debate Misses What Voters Really Want”, by Halpin et al for the Center for American Progress

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“Research revealed important gaps in voters’ basic understanding of U.S. foreign policy objectives and widespread confusion about what the nation is trying to achieve in the world…Likewise, traditional language from foreign policy experts about “fighting authoritarianism and dictatorship,” “promoting democracy,” or “working with allies and the international community” uniformly fell flat with voters in our groups…

“The findings in this survey suggest that American voters are not isolationist. Rather, voters are more accurately described as supporting “restrained engagement” in international affairs—a strategy that favors diplomatic, political, and economic actions over military action when advancing U.S. interests in the world.

American voters want their political leaders to make more public investments in the American people in order to compete in the world and to strike the right balance abroad after more than a decade of what they see as military overextension…

“At the most basic level, voters want U.S. foreign policy and national security policies to focus on two concrete goals: protecting the U.S. homeland and its people from external threats—particularly terrorist attacks—and protecting jobs for American workers.

“They also support efforts to protect U.S. democracy from foreign interference, advance common goals with allies, and promote equal rights in other countries. But these are second-order preferences. In the hierarchy of concerns about foreign policy, terrorism and a strong economy are more immediate issues for voters than are efforts to advance democratic values around the world…

“Younger voters are much less committed to traditional international and military engagement than are their elder cohorts, and they are more in favor of global action on issues such as climate change, human rights, and basic living standards for all people. Younger voters are also far less committed than older voters to several “America First” sentiments, particularly those related to trade and immigration.

“At the same time, the survey finds that many Generation Z and Millennial voters hold no strong views whatsoever about any foreign policy or national security issue. Many of these youngest voters are entirely disengaged from foreign policy and national security news and debates and consequently hold few strong opinions on many issues.”

“The Coming Generation War”, by Ferguson and Freymann

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“There is a mysterious cycle in human events,” said Franklin Delano Roosevelt, accepting the Democratic nomination for president in Philadelphia in 1936. “To some generations much is given. Of others much is expected. This generation of Americans has a rendezvous with destiny.”

“In the 20th century, many sociologists and historians flirted with the idea that generational changes could explain U.S. politics. The historians Arthur Schlesinger Sr. and Jr. wrote about “cycles of American history,” arguing that, as the generations turn, American politics rotates inexorably between liberal and conservative consensus…

“We are skeptical about cyclical theories of history. We are also aware of the slipperiness of generations as categories for political analysis. As Karl Mannheim pointed out more than 90 years ago, a generation is defined not solely by its birth years but also by the principal historical experience its members shared in their youth, whatever that might be.

“Nevertheless, we do believe that a generational division is growing in American politics that could prove more important than the cleavages of race and class, which are the more traditional focuses of political analysis…”The Millennials and Generation Z—that is, Americans aged 18 to 38—are generations to whom little has been given, and of whom much is expected.

“Young Americans are burdened by student loans and credit-card debt. They face stagnant real wages and few opportunities to build a nest egg. Millennials’ early working lives were blighted by the financial crisis and the sluggish growth that followed. In later life, absent major changes in fiscal policy, they seem unlikely to enjoy the same kind of entitlements enjoyed by current retirees.

“Under different circumstances, the under-39s might conceivably have been attracted to the entitlement-cutting ideas of the Republican Tea Party (especially if those ideas had been sincere). Instead, we have witnessed a shift to the political left by young voters on nearly every policy issue, economic and Cultural alike…

“In short, Ocasio-Cortez is neither an aberration nor a radical. She is close to the political center of America’s younger generations.”

“How Trump Voters are Giving the Right Qualms About Capitalism” by Park MacDougald

"One of the paradoxes of the American right has always been its full-throated embrace of capitalism. In some respects, of course, this embrace makes perfect sense: Capitalism is a pillar of American national identity; markets (at least in theory) promote conservative virtues such as thrift and responsibility; and the Hayekian critique of government planning, according to which economies are too complex for humans to fully understand, is a form of classical conservative skepticism regarding the limits of rational knowledge. Yet if one thinks of “conservatism” in the broad sense as a preference for continuity over change — for history and tradition over novelty and innovation — it fits uncomfortably with an economic system that tends toward a relentless abolition of the old.

“In Europe, conservatives have tended not only to take a more positive view of the state than Americans do but to regard capitalism as, at best, a necessary evil — something to be defended against left-wing leveling but that has the potential to dissolve the sorts of traditional social bonds that conservatism exists to protect…

But in the United States today, “the market triumphalism that has dominated the American right since Reagan seems, for the first time in a generation, to be on the back foot…”

“How France’s cultural revolution is causing new political divides”, by Simon Kuper, Financial Times, 30May19

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“The French traditionally didn’t get tattoos, partly because the church frowned on the practice. But there’s been a massive recent shift: a quarter of under-35s have tattoos compared with 1 per cent of over-65s, according to pollsters Ifop. The working-class young are the most decorated.

“Since moving to France in 2002, I’ve watched the country complete a cultural revolution. Catholicism has almost died out (only 6 per cent of French people now habitually attend mass), though not as thoroughly as its longtime rival “church”, communism…

“In many regions, family history looks like this: grandpa François was a farmer, grandma Marie raised the kids, daddy Jean-Claude had a factory job while Mama Nathalie taught part-time. Now young Kevin (English names are replacing French ones) is a hotel receptionist, separated from the mother of his child, Malika.

“A new individualised, globalised, irreligious society requires a new politics…

“Pollster Jerôme Fourquet, explains the splintering of society behind these numbers…French winners now exist in a kind of “autarchy”, rarely mixing with other classes, writes Fourquet. They are optimists in a pessimistic nation. They feel they are rising in the “social elevator”, as the French call it, whereas most working-class people say in polls that they live worse than their parents.”

“Many Across the Globe are Dissatisfied with How Democracy is Working”, by Wike et at from Pew Research

“Across 27 countries polled, a median of 51% are dissatisfied with how democracy is working in their country; just 45% are satisfied…Anger at political elites, economic dissatisfaction and anxiety about rapid social changes have fueled political upheaval in regions around the world in recent years…

The Financial Times’ Martin Wolf has written a succinct summary of the six crises confronting the United Kingdom.

To varying degrees, they also apply in many other countries today, especially the United States (“Britain is Once Again the Sick Man of Europe”, FT, 18Apr19)

“The first crisis is economic”, specifically the slow growth of productivity since the shock of 2008.

“The second crisis is over whether national identify has to be exclusive...The third crisis, Brexit, has weaponised identity, turning differences into accusations of treason…”

“The fourth crisis is political. The existing parties, based historically on class divisions, do not fit the current identify divisions”…

“The fifth crisis is constitutional (by which I mean that it relates to the rules of the political game)”…

“The sixth and perhaps most important crisis of all is leadership” – i.e., the quality of the people most likely to become the next UK Prime Minister.

“Conservatives Have a Different Definition of Fair”, by Dan Meegan (author of “America the Fair: Using Brain Science to Create a More Just Nation”)

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This excellent article reminds us that the aggregate political opinions and behavior we observe emerges from a complex mix of individual and group level factors.

“There is more than one way to decide who is deserving of what. One is by need: Some people have more than they need, and others need more than they have. Even when liberal leaders describe policies that are beneficial to everyone, they make it clear that the most important beneficiaries are those whose needs are most urgent… Still, there are other ways of judging what’s fair…

“Conservatives tend to value equity, or proportionality, and they see unfairness when people are asked to contribute more than they should expect to receive in return, or when people receive more than they contribute…

“This conservative version of fairness is wired deeply in the human brain, and liberals ignore it at their peril. In the laboratory, psychologists study the roots of economic and political attitudes through exercises like the ultimatum game, in which one player (the allocator) makes an offer to another player (the recipient) about how to split a small pot of money put up by the researchers. The recipient can accept the other player’s offer and take the cash—or reject it, in which case neither player gets anything. Not surprisingly, when the allocator offers a 50-50 split, recipients accept it.

“However, very unfair offers, such as a 90-10 split favoring the allocator, are often rejected by recipients, even though 10 percent of the pot is better than no money at all… Why would the brain’s default mode be to reject something in favor of nothing?

“Cognitive scientists have discovered that such seemingly irrational behavior often has an adaptive purpose. Rejection of unfair treatment, for example, has the purpose of enforcing social norms about the allocation of resources Acceptance of an unfair offer now all but guarantees continued mistreatment at the hands of the allocator, whereas rejection sends a clear message: Don’t take advantage of me, and don’t help yourself to more than you deserve…

“One might conclude from this that liberals, in their emphasis on helping the needy, are superior to conservatives because they strive to overcome biological determinism. Yet one could also accuse liberals of neglecting other definitions of fairness and—to their political detriment—of paying too little attention to how many other human beings instinctively think.”

“The Unwitting Committee to Re-Elect the President”, by Joel Kotkin

Kotkin succinctly summarizes the increasingly heard argument that the Democratic Party seems intent on snatching defeat from the jaws of victory in the 2020 US Presidential election, potentially handing another four year term to Donald Trump.

“Democrats could succeed easily if they focused on basic middle class issues, such as health care and reforming the tax system, where popular opinion, including among working class whites, is largely on their side. Infrastructure spending, if they can somehow disassociate it from the usual pork-barreling, could also gain support, particularly from construction workers.

“Instead many Democratic candidates appear if they are trying to win the campus and media intersectionality challenge, emphasizing cultural “purity” in ways that worry such craftier politicians as Barack Obama. The views now commonly expressed on gender, race, immigration and the environment may work in the deep blue recesses of our majority cities, but are unlikely to play in Peoria.”

However, there is more to the case for a Trump victory in 2020 than a claim that the Democrats will lose the race.

Donald Trump is still very much the same person we all knew when I lived in New York in the late 70s and early 80s; he hasn’t changed.

What I find far more interesting is how the electorate changed to the point that so many people were willing to vote for him for president in spite of his manifest flaws – and may well vote for him again in 2020 (e.g., see “Voters’ Capacity for Being Appalled by Trump is Waning” by Janan Ganesh, Financial Times 24Apr19)

A number of other recent articles and papers have helped me to better understand how this could come to pass.

In “All the Progressive Plotters”, Victor Davis Hanson provides an extensive list of the ways that Trump supporters will likely argue that his opponents have attempted to both prevent and then overturn his election. These arguments are sure to appear again in the 2020 campaign.

In “Progressivism and the West”, Bo Winegard identifies six aspects of progressivism, in its modern form (certainty not Teddy Roosevelt’s) that are generating increasing opposition: “(1) Misunderstanding human nature, in the form of its selective claims of “blank slatism” when genetic science findings conflict with its ideological principles; (2) Elevating victims and encouraging victimhood; (3) Encouraging censorship of speech and academic/scientific inquiry that doesn’t accord with its ideology; (4) Eroding due process and the presumption of innocence; (5) Encouraging “mobocracy” and disproportionate punishment; and (6) Encouraging contempt for the West and its icons.”

In two other articles, Hanson uses Herbert Stein’s famous dictum (“if something cannot go on forever, it will stop”) to address the likely impact of the near unprecedented level of immigration (both legal and otherwise) on politics in the United States.

In “Are There Any Limits on Immigration?” Hanson notes “there is a general expectation in Mexico and Latin America that American immigration law is unenforced. Or it is so bizarre that simple illegal entry almost always ensures temporary legal residence, pending an asylum hearing.” He goes on to describe, in great detail, how unchecked immigration has changed life in the California central valley town where he has lived for 65 years.

In “Things That Can’t Go on Forever Simply Don’t”, Hanson invokes Stein’s Law and notes that, “For history’s rare multiracial and multiethnic republics, an “e pluribus unum” cohesion is essential. Each particular tribe must owe greater allegiance to the commonwealth than to those who superficially look or worship like them…Yet over the last 20 years, we have deprecated unity and championed diversity…

“But unchecked tribalism historically leads to nihilism. Meritocracy is abandoned as bureaucrats select their own rather than the best-qualified. A Tower of Babel chaos ensues as the common language is replaced by myriad local tongues, in the fashion of fifth century imperial Rome.

“Class differences are subordinated to tribal animosities. Almost every contentious issue is distilled into racial or ethnic victims and victimizers.

“History always offers guidance to the eventual end game when people are unwilling to give up their chauvinism. Vicious tribal war can break out as in contemporary Syria. The nation can fragment into ethnic enclaves as seen in the Balkans. Or factions can stake out regional no-go zones of power as we seen in Iraq and Libya.

“In sum, the present identity-politics divisiveness is not a sustainable model for a multiracial nation, and it will soon reach its natural limits one way or another. On a number of fronts, if Americans do not address these growing crises, history will. And it won’t be pretty.”

Both very insightful and equally worrying are various research papers by Professor Lilliana Mason, author of the book “Uncivil Agreement: How Politics Became Our Identity”

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Mason’s argument begins with the observation that, “Social cooperation seems to require that we think of an “us” and a “not us.” These types of social categories help us to make sense of a complicated world. She notes that, “civilization more broadly seems to require that we identify with groups, and that we privilege our own groups over others. This doesn’t necessarily mean hating other groups. It simply means liking our own group the most, and doing the most work to help our group.”

In recent years, however, a number of interacting social sorting mechanisms have caused a much greater alignment of preferences and outcomes on different dimensions (e.g., race, religion, geography, education, income, social views, etc.) with political party identifications, which have become what Mason calls “meta-identities.” As she notes, “partisanship can now be thought of as a mega-identity.”

Mason concludes that this has had negative consequences whose impact is not widely recognized.

“Because a highly aligned set of social identities increases an individual's perceived differences between groups, the emotions that result from group conflict are likely to be heightened among well-sorted partisans.” Put differently, “Individuals who feel fewer cross pressures from their multiple identities become more intolerant of perceived ‘out-groups’.” In contrast, in societies with less aligned identities, “cooler heads are more likely to prevail.”

Even more important, when a range of different social identities are all aligned with allegiance to a particular political party, when that party changes its policy positions it is much less likely to lose voters that would have been the case in the past, because today party identification has a larger impact than a party’s position on a given issue.

In sum, because social sorting and has increased the alignment of multiple identities, party allegiance has become much more durable, and intraparty conflict much more heated and antagonistic. That is a critical change from the past, and one that I believe will likely take a near existential external threat to the nation to overcome.

“The Geography of Partisan Prejudice” by Ripley et al

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This is another piece of excellent and insightful county level analysis. Ripley and her coauthors find that “the most politically intolerant Americans, tend to be whiter, more highly educated, older, more urban, and more partisan themselves. This finding aligns in some ways with previous research by the University of Pennsylvania professor Diana Mutz, who has found that white, highly educated people are relatively isolated from political diversity. They don’t routinely talk with people who disagree with them; this isolation makes it easier for them to caricature their ideological opponents.”

“Europeans Credit EU With Promoting Peace and Prosperity, but Say Brussels Is Out of Touch With Its Citizens”, by Pew Research

“Across 10 European nations recently surveyed by Pew Research Center, a median of 74% say the EU promotes peace, and most also think it promotes democratic values and prosperity.”

“However, Europeans also tend to describe Brussels as inefficient and intrusive, and in particular they believe the EU is out of touch – a median of 62% say it does not understand the needs of its citizens.”

“Many are also worried about the economic future. Across these 10 nations, a median of 58% believe that when children in their country grow up, they will be worse off financially than their parents; only 30% think they will be better off.”

“There are also strong concerns about immigration in some countries. Majorities or pluralities in most nations want fewer immigrants allowed into their country. Many believe that immigrants tend to remain distinct from the broader culture and that immigration increases the risk of terrorism.”

Two recent articles provided very interesting and useful insights into the painful political realignments that are likely underway in the US and UK

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In “The End of the New Deal Era – and the Coming Realignment”, Frank DiStefano succinctly presents the history of the five previous political realignments in the United States. He notes that, “American parties are temporary coalitions forged as tools to govern our republic at specific moments of crisis. They bind fractious collections of people who disagree about many things but agree on how to solve the biggest problems of their age…Once formed, these new parties wage a great national debate over the problems facing the country. That debate goes on for decades, until Americans almost forget those parties and their ideologies weren’t always there…When the issues America designed those parties to debate were finally resolved or faded away, the parties turned into weak institutions coasting on old ideas. Eventually, they crumbled in what scholars call a realignment…”

“This is why American politics seems so troubled. This is why there’s increasing disorder and chaos. This is why the political world we’ve always known seems to be decaying before our eyes...Our parties are dying because one great debate [between New Deal Liberalism and modern conservatism] that emerged out of the Depression and World War 2] is passing away, and another is being born…the country now faces an onslaught of new problems our parties were never designed to address [as] we stand at the cusp of a global social and economic transformation – from and industrial to a global information economy – as significant as the transformation from the agricultural world to the industrial…”

“Through everything that has happened over the many decades since 1932, the Democrats have continued to be the party of populists and progressives [in the 1920s sense of the latter term] dedicated to the ideology of New Deal Liberalism. The Republicans have remained a party dedicated to protecting liberty and virtue according the ideology of modern conservatism…

“The Democratic and Republican parties have nothing important to say about the next set of problems facing America…all of which come back in some way to one issue: the perceived decline of the American Dream… [The parties] lack even the language to think about them…America is facing a realignment whether we want one or not.”

I don’t quite agree with that last statement, as there are a few people – admittedly who are not mainstream in their respective parties, who have directly addressed restoring the American Dream. An excellent example of this is Oren Cass, and his outstanding essay, “The Working Hypothesis”, which is well worth a read.

In “Welcome to the Hard Centre – and the Future of British Politics”, Paul Collier concludes that the Conservative party has to move beyond Brexit, ideally in the direction “healing capitalism.”

He notes that, “Capitalism is the only system that is capable of delivering mass prosperity, but it cannot be left on autopilot. Once every few decades it veers off track and requires active public policy…Yet there has been little serious rethinking in either party. Labour became so intellectually lost that it got hijacked by Marxists. Meanwhile, the Conservatives flirted with good ideals, like David Cameron’s Big Society, but none became dominant.”

Pithily, he observes that in the face of the increasingly obvious and socially damaging problems of financialized capitalism, both parties retreated “into their equally unviable intellectual comfort zones: the Conservatives wanted a nation without the state, and Labour the state without a nation…”

“Meanwhile, ordinary people facing new anxieties seized their opportunities to mutiny. In Scotland, they voted for the SNP; in England for Ukip, Brexit and Corbyn. Given the travails of Labour, [Collier argues that] recovery of the intellectual confidence of the Tory party has become essential for the country...”

“So what are the options facing the Tories? The American right was lured by libertarianism: ‘neither state nor nation’. This is manifestly ridiculous: I tell my libertarian friends that they do not need to wait in America pining for nirvana. They can breathe the air of freedom from government right now by moving to Somalia…Turning the Conservative party into the Libertarian party would be the royal road to political suicide…”

“The remaining choice is state-and-nation. For Conservatives, it implies taking seriously Cameron’s lone voice speaking up for society… Labour’s roots in society are the cooperative movement; the equivalent for the Conservative party is one nation made manifest by the firm with social purpose. It is Cadbury and John Lewis…”

“Embracing state-and-nation means restoring the ethics of the firm, enhancing the skills of the less-educated and recognising the importance of belonging to place. Each requires tough changes in policies that will outrage vested interests: welcome to the hard centre…”

“Conservatives are quite right to recognise that the left-driven agenda of redistributing consumption (aka ‘equality’) misses the point. People need the dignity of being sufficiently productive to earn a decent living but to be productive, people need massive investment in training, and a cluster of skill-intensive firms in their city. The ideology of leave-it-to-the-market encounters its nemesis in training and in the revival of broken cities: market forces drive firms in the opposite direction…”

“New anxieties need to be addressed by new solutions, not old ideologies. This is the intellectual rebirth that the Conservative party needs. Labour will at some stage go through an equivalent rebirth. The party that gets there first will dominate the next two decades.”

“The Six Wings of the Democratic Party” and “The Five Wings of the Republican Party” by FiveThirtyEight.com

These two guides to the subdivisions within the Democratic and Republic parties make for an interesting read in light of the two articles noted just above. In particular, two points stand out. The first is that, as DiStefano and Collier note, no party today has a compelling answer to the social and political challenges posed by the powerful forces of financialized capitalism, rapid improvement in multiple technologies, aging, and climate change.

The second is the risk of another deeply unsatisfying US election in 2020. While a number of Democratic policy proposals (e.g., around healthcare and more progressive taxation) have wide popular appeal, many aspects of their social agenda poll in the 20s, if that. For Republicans, the opposite often holds true. As more than one commentator has noted, neither major party seems willing or able to seize what appears to the most attractive high ground in American politics today – more aggressive and effective government action on healthcare, progressive taxation, competition, data privacy and other issues, combined with a less strident and intolerant social agenda.

This positioning is the opposite of the neoliberal approach (relatively conservative on economic issues, and progressive on social issues) that was a winning strategy for both Bill Clinton and Tony Blair. The lack of enthusiasm for it today is well summarized in Uri Harris’ article in Quillette on Howard Schultz’ campaign for president, “The Sudden Unpopularity of Neoliberal Centrists.”

The ever-readable Joel Kotkin published an insightful article that argues, “Understanding Democratic Socialism is the Key to Defeating It”

“Conservatives, in or out of the White House, underestimate the intrinsic appeal of the resurgence of neo-Marxism at their own peril…[Moreover], the rise of ‘woke progressivism’ represents a threat both to the right as well as the super-affluent gentry left.”

“Socialism’s appeal stemmed [in the past] as it does today, from the failures of capitalism…What many conservatives deemed ‘socialism’ in the fifties – social security, the GI Bill, the New Deal infrastructure program – was seen by the working class as helping them become middle class…”

“Generally, today’s socialists pitch European welfare states as their model, with much higher taxes and greater regulation of private businesses…With rampant inequality and a shrinking middle class, the case for socialism should be stronger than any time since the Depression…”

“Today socialism’s leading messengers, reared in the ideological hot houses of elite universities, also constitute the wealthiest and whitest of America’s political tribes. Not surprisingly, these neo-socialists carry attitudes ill-suited to capitalizing, as did Donald Trump, on the mass middle and working class disaffection…”

“But those on the right, with all their fulsome defense of capitalism, also need to be reminded that free markets need to create increased opportunity as well as better living conditions. Our increasingly hierarchical and feudal capitalism all too often fails this test.”

“Stability of Democracies: A Complex Systems Perspective”, by Wiesner et al

A fascinating paper that very much reflects our own thinking and forecasting approach.

“The idea that democracy is under threat, after being largely dormant for at least 40 years, is looming increasingly large in public discourse. Complex systems theory offers a range of powerful new tools to analyse the stability of social institutions in general, and democracy in particular.

“What makes a democracy stable? And which processes potentially lead to instability of a democratic system? This paper offers a complex systems perspective on this question, informed by areas of the mathematical, natural, and social sciences…

“Scholars of democracy need to move away from arguments based on static equilibrium to more dynamic frameworks which are better suited to understanding how stable the equilibria are to perturbations. Some perturbations may cause temporary instability. Others may set in train self-reinforcing changes that may have long-term consequences, up to and including the transition from democracy to non-democracy...

“Many mechanisms can result in institutional instability, ranging from social inequality and financial shocks to disconnected information flow on modern social media…Many of these mechanisms are interconnected, meaning that their temporal and/or spatial dynamics are not separable but influence each other to a significant degree [through positive feedback].”

“Millennial Socialism”, The Economist 14Feb19

The “Green New Deal” (GND) marks another step towards a split in the US Democratic Party, and highlights dynamics similar to those roiling the Labor Party in the UK

As you have no doubt read, the GND seeks to “eliminate all fossil fuel energy production, as well as nuclear energy…eliminate air travel and 99% of cars…provide free education for life and a guaranteed income” – and get rid of all those farting cows.

As David Brooks noted in his New York Times column on 11Feb19, “From Bill Clinton through Barack Obama, Democrats respected market forces but tried to use tax credits and regulations to steer them in more humane ways…That Democratic Party is ending. Today, Democrats are much more likely to want government to take direct control. This is the true importance of the Green New Deal, which is becoming the litmus test of progressive seriousness.”

“Understanding shifts in Democratic Party Ideology” by Gallup

SURPRISE
“Between 2001/06 and 2013/18, the percent of Democrats identifying as liberal increased from 32% to 46%, while moderates declined from 42% to 35% and conservatives from 23% to 17%...

54% of White Democrats identified themselves as liberals, compared to 33% of Blacks and 38% of Hispanics…

69% of moderate Democrats did not graduate from college, as did 86% of conservative Democrats. In contrast, only 53% of liberals did not graduate from college. While 55% of liberals believe abortion should be legal under any circumstance, only 35% of moderates and 23% of conservatives agreed with this position.”

“Democrats Favor More Moderate Party; GOP More Conservative” by Gallup

54% of Democrats want their party to be more moderate; 41%, more liberal

57% of Republicans want their party to be more conservative; 37%, more moderate

Democrats in New York and Virginia have introduced legislation legalizing third trimester abortions. This will likely be a powerful issue to whomever ends up as the Republican presidential candidate in 2020

SURPRISE
Gallup’s polling makes clear why this is the case. 35% of Americans believe abortion should be illegal in the first trimester of pregnancy, 65% in the second trimester, and 80% in the third trimester.

Donald Trump has begun to attack Democratic politicians as socialists

There appears to be a good reason for this. According to a memo from Neil Newhouse of Public Opinion Strategies, while 77% of Democrats agree with the statement that “the country would be better off if our political and economic systems were more socialist”, only 37% of Independents and 14% of Republicans agreed.

“Man Bites Blue Dog: Are Moderates Really More Electable than Ideologues?” by Stephen Utych

SURPRISE
“Are ideologically moderate candidates more electable than ideologically extreme candidates? Historically, both research in political science and conventional wisdom answer yes to this question. However, given the rise of ideologues on both the right and the left in recent years, it is important to consider whether this assumption is still accurate.

The author finds that, “while moderates have historically enjoyed an advantage over ideologically extreme candidates in Congressional elections, this gap has disappeared in recent years, where moderates and ideologically extreme candidates are equally likely to be elected. This change persists for both Democratic and Republican candidates.”

The Wall Street Journal’s Peggy Noonan and the Financial Times’ Wolfgang Munchau are not columnists whose views are usually contrasted. In this case, however, that approach is insightful, and helps to refine our model of political changes that affect financial market behavior, valuation, and returns.

SURPRISE
In “The Future Belongs to the Left, Not the Right” (FT 24Feb19), Munchau notes that, “Liberal democracy is in decline for a reason. Liberal regimes have proved incapable of solving problems that arose directly from liberal policies like tax cuts, fiscal consolidation and deregulation: persistent financial instability and its economic consequences; a rise in insecurity among lower income earners, aggravated by technological change and open immigration policies; and policy co-ordination failures, for example in the crackdown on global tax avoidance.” He “expects the pushback against liberalism to come in stages. We are in stage one — the Trumpian anti-immigration phase. Immigration carries net economic benefits, especially over the long term. But there are losers from it, too, both actual and imagined… For now, the right is thriving on the anti-immigration backlash…

I suspect that immigration will soon be superseded by other issues — such as the impact of artificial intelligence on middle-class livelihoods; rising levels of poverty; and economic dislocation stemming from climate change… This is a political environment that favours the radical left over the radical right. The right is not interested in poverty and its parties are full of climate-change deniers..

The killer policy of the left will be the 70 per cent tax rate proposed by freshman US congresswoman Alexandria Ocasio-Cortez. It is not the number that matters, but the determination to reverse a 30-year trend towards lower taxation of very high incomes and profits. There would be collateral damage from such a policy for sure. But from the perspective of the radical left, collateral damage is a promise, not a threat.”

In her 14Feb19 column, “Republicans Need to Save Capitalism”, Noonan agrees with many of Munchau’s observations.

“The American establishment had to come to look very, very bad. Two long unwon wars destroyed the GOP’s reputation for sobriety in foreign affairs, and the 2008 crash cratered its reputation for economic probity. Both disasters gave those inclined to turn from the status quo inspiration and arguments. Culturally, 2008 was especially resonant: The government bailed out its buddies and threw no one in jail, and the capitalists failed to defend the system that made them rich. They dummied up, hunkered down and waited for it to pass…

“Americans have long sort of accepted a kind of deal regarding leadership by various elites and establishments. The agreement was that if the elites more or less play by the rules, protect the integrity of the system, and care about the people, they can have their mansions. But when you begin to perceive that the great and mighty are not necessarily on your side, when they show no particular sense of responsibility to their fellow citizens, all bets are off. The compact is broken…

Republicans in Washington stumble around trying to figure what to stand for beyond capitalizing on whatever zany thing some socialist said today.
But isn’t their historical purpose clear? Their job—now and in the coming decade—is, in a supple, clever and concerted way, to save the free-market system from those who would dismantle it."

“Dancing with Donald”, by Cuchro et al

Despite the title, this paper is actually an excellent review of how the use of different voting systems would have affected the outcome of the 2016 US presidential election.

In the United States, the announced Democratic candidates for president in the 2020 election are taking positions well to the left of traditional Democratic party positions on a range of policy issues. In some ways, this mirrors the way Green parties in Europe are winning voters from traditional left of center socialist parties.

While polling data shows that a majority of US voters are concerned about increasing taxes on “the rich”, and healthcare (as economic disruption increases employment uncertainty, and makes the link between employment and health insurance less and less tenable), other progressive positions, and the tendency of many left-wing Democrats to impose litmus tests to ensure candidates’ ideological purity, seem likely to cost candidates’ support in the vital center of the electorate. This will be of particular importance if wither (a) Donald Trump is removed from office or (b) he is defeated in the Republican primary, resulting in nomination of a more centrist Republican candidate.

Two analyses, from 2016 and 1981, put the leftward shift of the Democratic party into perspective, and frame that strategic challenge facing presidential candidates in 2020.

SURPRISE
In “Political Divisions in 2016 and Beyond”, Lee Drutman replicated Lilie and Maddox’ classic 1981 paper, “An Alternative Analysis of Mass Belief Systems: Liberal, Conservative, Populist, and Libertarian.”

Both papers located sampled voters in a 2x2 matrix, defined by their positions on economic and social issues. Liberals and Conservatives take consistent views on both sets of issues. Libertarians are socially liberal and economically conservative; Populists are socially conservative and economically liberal.

When comparing the two papers, the first striking finding is the change over 35 years in the percent of voters that the respective authors find in the different categories (note that this is an approximation, as the methodologies weren’t exactly the same). The size of the conservative bloc was essentially unchanged; it was estimated to be 25% of the electorate in 1981 (disregarding Lilie and Maddox fifth category of “inconsistents”), and 23% in 2016. Populists were also roughly the same, at 33% and 29%. Liberals, however, had grown from 23% to 45%, while Libertarians had shrunk from 19% to 4%.

Drutman finds that in 2016, most Clinton voters were Liberals, while Trump voters were a combination of Conservatives and Populists (Libertarians split their votes about equally).

In 2020, the essential question is whether a progressive Democratic candidate’s liberal positions on economic issues (e.g., single payer healthcare) will be able to attract a significant number of Populist voters, in spite of the Democratic candidate’s Liberal position on hot button social issues like identify politics and freedom of speech.

“Fake News on Twitter During the 2016 U.S. Presidential Election”, by Grinberg et al

SURPRISE
“The spread of fake news on social media became a public concern in the United States after the 2016 presidential election. We examined exposure to and sharing of fake news by registered voters on Twitter and found that engagement with fake news sources was extremely concentrated. Only 1% of individuals accounted for 80% of fake news source exposures, and 0.1% accounted for nearly 80% of fake news sources shared. Individuals most likely to engage with fake news sources were conservative leaning, older, and highly engaged with political news.”

“Bureaucracy versus Democracy” by Philip Howard in The American Interest

SURPRISE
Howard has written an insightful article that analyzes another underlying source of voter frustration with political institutions, noting that, “diagnoses of voter alienation converge at one point: a sense of disempowerment by Americans, at every level of responsibility, to make practical and moral choices. Almost without our noticing when it happened, bureaucratic structures have crowded out human agency.”

In the face of the many problems facing not just the United States, but other nations as well, too often bureaucracies have been unable to design and/or implement effective policies.

The World Economic Forum meeting at Davos produced multiple stories talking about the “grim” or “dark” mood among attendees.

For example, as Fareed Zakaria wrote in the Washington Post (“Davos is a Microcosm of the World, and the Outlook is Grim”), “The atmosphere at the 2019 World Economic Forum reflects the global picture perhaps more genuinely than in years past, and the painting is not very pretty. The mood here is subdued, cautious and apprehensive. There’s not much talk of a global slowdown, but no one is confident about a growth story, either. There is no great global political crisis, yet people speak in worried tones about the state of democracy, open societies and the international order.”

Here is the FT’s Gideon Rachman: “Everybody needs heroes — even Davos plutocrats. But the “global elite” is currently out of enthusiasm and ideas. In the corridors of the World Economic Forum last week, Kenneth Rogoff, the Harvard economist, summed it up: “This is the flattest Davos I can remember. Normally, there is a star country or a star industry that everybody is talking about. But this year, there is nothing” (“Davos 2019: No More Heroes for the Global Elite”).

The month began with the death and funeral of George H.W. Bush.

As with the funeral of John McCain, only more so, Bush 41’s funeral was a painful reminder for many people of how much the United States has changed.

An article in the Atlantic Monthly (“What the Tributes to George H. W. Bush Are Missing,” by Peter Beinart) raised this surprising point: “In the contemporary United States, presidential legitimacy stems from three sources. The first source is democracy. Although America’s system of choosing presidents has many undemocratic features, many Americans associate presidential legitimacy with winning a majority of the vote.

The second source is background. Throughout American history, America’s presidents have generally looked a certain way. They’ve been white, male, (mostly) Protestant, and often associated with legitimating institutions such as the military, elite universities, or previous high office. Americans are more likely to question the legitimacy of presidents who deviate from those traditions.

The third source is behavioral. Presidents can lose legitimacy if they violate established norms of personal or professional conduct. George H. W. Bush was the last president who could not be impugned on any of these fronts. He was elected with a clear majority of the popular vote. He was racially and culturally familiar: A WASP man who had served in World War II, attended Yale, and held a variety of top government jobs. And he behaved the way Americans expect their presidents to behave.

Since then, every president has faced some sort of crisis of legitimacy.”

December also saw the resignations of Marine Corps Generals John Kelly and James Mattis from the Trump administration, and the latter’s resignation letter, following Trump’s impulsive decision to withdraw American troops from Syria.

SURPRISE

As The Economist noted, Mattis is the first American Secretary of Defense who has ever resigned in an act of protest. More so than any other administration departure, the loss of Mattis will almost certainly be a source of grave concern for many of the president’s Republican supporters.

If Special Prosecutor Robert Mueller’s report eventually provides evidence of collusion with Russia, the Mattis resignation could be the straw that convinces enough Republican Senators to convict if the Democrat controlled House of Representatives passes a bill of impeachment (a 2/3 vote is needed to convict).

The US Senate Intelligence Committee released two reports by independent organizations “detailing the tactics used by Russia’s Internet Research Agency (IRA) in their attempts to influence US political discourse.” (The Tactics and Tropes of the Internet Research Agency and The IRA and Political Polarization in the United States, 2015-2017).

These reports provide very detailed information about the extent to which social media (and social network analysis methods) have made large populations and elections more vulnerable to manipulation.
They have also created a base of evidence for impeaching Donald Trump if Robert Mueller’s report connects his campaign to these Russian initiatives.

“The Divide Between Silicon Valley and Washington is a National Security Threat” by Zegard and Childs in the Atlantic Monthly

“A silent divide is weakening America’s national security, and it has nothing to do with President Donald Trump or party polarization. It’s the growing gulf between the tech community in Silicon Valley and the policymaking community in Washington.

Beyond all the acrimonious headlines, Democrats and Republicans share a growing alarm over the return of great-power conflict. China and Russia are challenging American interests, alliances, and values—through territorial aggression; strong-arm tactics and unfair practices in global trade; cyber theft and information warfare; and massive military buildups in new weapons systems … In Washington, alarm bells are ringing. Here in Silicon Valley, not so much…

In the past year, Google executives, citing ethical concerns, have canceled an artificial-intelligence project with the Pentagon and refused to even bid on the Defense Department’s Project JEDI, a desperately needed $10 billion IT improvement program. While stiff-arming Washington, Google has been embracing Beijing, helping the Chinese government develop a more effective censored search engine despite outcries from human-rights groups, American politicians, and, more recently, its own employees.”

“The Center Can Hold: Public Policy for an Age of Extremes” by Lindsey et al.

A thoughtful analysis that attempts to chart a course between the two extremes that now seem to dominate American politics, even if they don’t reflect what polls say are the views of the majority of voters.

Newly elected US Senator Mitt Romney wrote an OpEd in the Washington Post newspaper that was highly critical of Donald Trump. Meanwhile, former South Carolina governor and UN Ambassador Nikki Haley has rapidly gained a large twitter following.

SURPRISE

Either or both of these center/right politicians could challenge Donald Trump in a 2020 Republican primary election, and make painfully clear the party’s widening divisions.

The election of Alexandria Ocasio-Cortez (AOC) and other progressives to the US House of Representatives, as well as progressive US Senator Elizabeth Warren’s declaration of her presidential candidacy signal that the long simmering battle between traditional and progressive Democrats is finally coming out into the open.

SURPRISE

This has already led to the introduction of and support for policy initiatives (like single payer healthcare and much higher top marginal tax rates) that in the past either would not have been introduced or which would have been immediately dismissed. That is clearly no longer the case.

“Understanding the Customer Experience with Government”, by D’Emidio and Wagner from McKinsey & Company

An often heard observation is that these days governments seem to be filled with more people who studied public policy, and fewer who studied public administration – how to implement those policies and deliver results. Moreover, as business has become much better at understanding customer needs and wants and efficiently delivering value propositions that satisfy them, the public’s perception of government’s performance has inevitably declined (with some notable exceptions like the military), which has no doubt further increased public frustration and anger.

This new McKinsey report will do little to dispel that view. As it succinctly states, “Understanding precisely what matters to the customers you serve is essential to improving their experience. Yet McKinsey research has found that most agencies don’t.”

“What Happens if Americans Stop Trusting the System?” by Andrew Sullivan, in New York Magazine, 19Nov18

Back in 2010, The Index Investor first began to write about what we called “Increasing Threats to Political Legitimacy” (e.g., see the May and September issues). Unfortunately, the trends we identified have continued unabated, and indeed have accelerated. Today, lots of smart people are writing about this issue.

One of those is Andrew Sullivan, whose writing we have admired for years. We therefore paid a lot of attention to what he wrote this month.

“It’s been quite a while now that the phrase “cold civil war” has been bandied about. And it’s useful, so far as it goes. Polarization has now become tribalism, and tribe is now so powerful a force it is beginning to eclipse national loyalty. The two nations, to borrow Benjamin Disraeli’s description of 19th-century Britain, stand facing each other, without blinking, faces flush, equally matched, on trigger alert for offense or another set battle.”

“What we don’t quite know is if this tenuous, balanced equilibrium is sustainable indefinitely, the system careening from one party’s bitterly contested rule to gridlock and back again, until our tribal tensions are somehow exhausted. Or whether the cold civil war could at some point get a little warmer, or even, shall we say, hot…What we don’t know, in other words, is when the legitimacy of the entire political system could come into doubt, across the ideological spectrum, in a way that might sanction undemocratic responses.”

Sullivan has expressed his concerns before, for example in his May, 2016 column: “America Has Never Been So Ripe for Tyranny”, which is well worth a read, even if you don’t agree with its conclusions.

We have also seen many other writers searching for historical analogies to the present political situation in the United States. Ones we’ve found thought-provoking include “The Suffocation of Democracy” by Christopher Browning (which compares current circumstances in the US to Weimar Germany), “Lurching to a New Weimar”, by Joel Kotkin, and “The Suffocation of History” by Richard Landes (which criticizes the Weimar analogy).

A quote often attributed to Mark Twain reminds us that “history doesn’t repeat itself, but it often rhymes.” It is one that we are well-advised to keep in mind.

“The Republican Party Has Changed Dramatically Since George H.W. Bush Ran It” by Perry Bacon

Written just after Bush’s death, this column makes extensive use of data to drive home how much politics and the composition of the Democratic and Republican parties in the US have changed over the past 30 years. We all know this is true, but this evidence-rich analysis still comes as a bit of a shock to those of us with long memories.

“Is the Left Going Too Far?” by Peter Beinart

An excellent article summarizing the history of two periods of the left’s ascendancy in modern American politics – the 30s and the 60s – which Beinart uses to assess the latest one, whose beginnings he dates to the Occupy Wall Street movement in 2011 and the rise of Bernie Sanders. Beinart reminds us that in both these previous situations, the left overreached and triggered a strong electoral counter-reaction, but not before achieving some policy wins.

“The Central Challenge of the Age” by David Brooks, in the New York Times, 5Nov18

Following on Beinart’s conclusions, David Brooks highlights some of the challenges facing America’s resurgent progressive left politicians.

“National identity is the most powerful force in world politics today…The Republicans have flocked to Trump’s cramped nationalism and abandoned their creedal story. That has left the Democrats with a remarkable opportunity. They could seize the traditional American national story, or expand it to gather in the unheard voices, while providing a coherent, unifying vehicle to celebrate the American dream. And yet what have we heard from the Democrats? Crickets.”

“What is the Democratic national story? A void…In the past, Democrats tended to see immigration as an economic issue. Most mainstream Democrats have always been pro-immigrant, but they also favored border enforcement as a way to protect working-class wages. Barack Obama deported more unauthorized immigrants in his first two years in office than Trump has so far. Bernie Sanders used to dismiss open borders as a “Koch brothers proposal.” But now, especially in the wake of Trumpian nativism, immigration is seen as a racial justice issue. Calls for law and order on the border are taken as code for racism…”

“Democrats have a very strong story to tell about what we owe the victims of racism and oppression. They do not have a strong story to tell about what we owe to other Americans, how we define our national borders and what binds us as Americans.”

“Here’s the central challenge of our age: Over the next few decades, America will become a majority-minority country. It is hard to think of other major nations, down through history, that have managed such a transition and still held together…If the Democrats are going to lead this transition, they’ll need not just a mind‑set that celebrates diversity, but also a mindset that creates unity. They’ll need policies that integrate different groups into a coherent nation, with shared projects, a common language and culture and clear borders.”

“If you don’t offer people a positive, uplifting nationalism, they will grab the nasty one. History and recent events have shown us that.”

“Hidden Tribes: A Study of America’s Polarized Landscape” by Hawkins et al for More in Common

“Yes, It Can Happen Here” by Andrew Michta, in The American Interest, 30Oct18

“America’s Resilient Center and the Road to 2020” by the Progressive Policy Institute

(Note that PPI, whose motto is “radically pragmatic”, dates from the 1980s; when it was created as a policy development think tank affiliated with the Democratic Leadership Council, which was created to move the Democratic Party back towards the middle of the political spectrum after George McGovern’s presidential defeat.)

SURPRISE.

This analysis provides a very thought provoking look at the size of key segments and policy views of US voters at the time of the 2018 midterm election. Democrats (39%) and Democratic leaners among Independents (9%) comprise 48% of the electorate. Republicans and leaners (31 + 8) account for 39%, and true Independents for 13%.

On a different, but important dimension, 32% identify as conservative in their views; 44% as moderate; and 24% as liberal (note that 62% of Independents plus Democratic and Republic leaners identify as moderates).

“Despite a strong economy, Americans are anxious: 66% worry about keeping healthcare coverage; 64% about paying healthcare bills, 63% about saving for retirement; 77% believe today’s children will be worse off than parents.”

PPI also found “unexpectedly strong support for nationalized health care”, which 75% of Independents favor.

Another surprise was that 85% of voters are worried about the size of the national debt – “a possible sleeper issue” in 2020.

PPI’s Conclusion: “Two requirements for a Democratic win in the 2020 presidential election are a big tent and a pragmatic, solutions-oriented agenda.”

November 2018 US Election Results

Two interesting indicators. (1) The swing towards the Democrats among suburban women. In some cases, (e.g., Connecticut), the emotional vote against Donald Trump appeared more powerful than economic self-interest. (2) Yet while the Democrats now control the House of Representatives, the Republicans will pick up one and possibly two seats in the Senate to further strengthen their existing majority.

This will make any attempt to impeach President Trump much more difficult, as while the Democrat controlled House may pass a bill of impeachment, the Senate must vote to convict. While that is not impossible, it appears unlikely given the currently evidence that would be used to support the impeachment bill.

That this election provided a conclusive victory for neither side guarantees that political conflict and overall uncertainty will continue unabated, and will likely worsen, between now and the 2020 presidential election.

Following her party’s poor election performance, Angela Merkel resigns as head of CDU and announces she won’t serve as Chancellor beyond 2021. Macron’s popularity continues to fall as his reforms bite.

Another indicator of the extent of the collapse the political center across multiple democracies, due to its inability to adequately respond to increasing economic uncertainty, and popular concerns about immigration and terrorism. As it other nations, it is the parties on either extreme that are gaining at the center parties’ expense. In Germany, it is AfD and Greens who are gaining while CDU/CSU and Social Democrats are losing support.

As the Financial Times Martin Wolf wrote this month, “Populist forces are on the rise across the transatlantic world…The common thread of all these movements is rejection of the contemporary western elite and the synthesis of liberal democracy, technocratic governance and global capitalism that it promoted. It is a revolution against the establishment.” (“The Price of Populism”, 24Oct18)

See also, “How Social Democracy Lost Its Way: A Report from Germany” by Tobias Buck in the Financial Times, 17Oct18

Nostalgic reminders of a different and more unified United States – or at least a different political landscape – at Senator John McCain’s funeral at the beginning of September provided a stark contrast to the shocking polarization and extremism on display during the Kavanaugh confirmation hearings at the end of the month.

I experienced firsthand the euphoria in Europe that was triggered by the fall of the Berlin Wall and the collapse of the Soviet Union, which contributed to the enormous psychological shock produced only a few years later by the savage civil wars that accompanied the breakup of Yugoslavia. I often think that the European psyche has never recovered from this whipsaw.

While not as powerful, September’s bookend events in US politics cannot help but have produced a similar shock to the US psyche. How it plays out is uncertain at this point; suffice to say that I believe it has widened the scope of what some will see as acceptable political ends and means to pursue.

“Are We on the Verge of Civil War? Some Words of Reassurance” by Morris Fiorina

Fiorina’s quantitative analyses of the American electorate are always first rate. In this article, he uses a range of data to argue that we are further away from major political change than many media storylines would have us believe. It is a good antidote to what seems to be the conventional wisdom, at least for the surprisingly small minority of highly politically active citizens. That said, he also notes the importance of the ideological sorting of America’s two main parties (i.e., the disappearance of conservative Democrats and liberal Republicans), and the increased uncertainty this creates about political dynamics in the United States.

“America is Moving Towards Oligarchical Socialism” by Joel Kotkin

Surprise.

While most political speculation has been focused on the potential implications of rising populist/nationalist movements in the United States, Kotkin provides a provocative alternative view that expands our mental models of the current political situation, and the range of outcomes that could result from progressive dynamics.
“Before they can seize power from the president and his now subservient party, the Democrats need to agree on what will replace Trumpism.

Conventional wisdom implies an endless battle between pragmatic, corporate Clintonites on one side, and Democratic socialists of the Bernie brand. Yet this conflict could resolve itself in a new, innovative approach that could be best described as oligarchical socialism.

Oligarchal socialism allows for the current, ever-growing concentration of wealth and power in a few hands — notably tech and financial moguls — while seeking ways to ameliorate the reality of growing poverty, slowing social mobility and indebtedness. This will be achieved not by breaking up or targeting the oligarchs, which they would fight to the bitter end, but through a massive increase in state taxpayer support.”

“The Science Behind the Brexit Vote” by Michele Gelfand in The Guardian

“When people feel threatened, they want tighter social norms.” This fits with other research that finds people to have a stronger preference for conformity when uncertainty is high. This is the appeal of populist authoritarian leaders explained at the level of individual cognitive neuroscience.

“The Problem with Populism” by JP Morgan Research.

Like Bridgewater’s report on the increasing attractiveness of populism, and Francis Fukuyama’s recent essays on the same subject (as well as others by Andrew Sullivan, Michael Lind, and Yascha Mounk), this report analyzes the root causes of various forms of populism’s rising appeal, and speculates on the possible consequences if these views grow in political popularity.