Trump’s victory was stunning but not surprising to readers of Growth Strategies. I have been writing for 8 years on the economic conditions that drove this vote. And no question, my main “prism” — the lens through which I view the world — is economic.
I won’t bother to list my own citations; if you’re interested you can see them here. The point is not the precise accuracy of my predictions, but the accuracy of my analytical approach.
Sure, I have featured social and demographic factors too — extensively — but I see economics as the main determinant, due to the power of incentives and disincentives in shaping the human behavior that defines our living environment.
By the way, we all have prisms, and all prove the old adage “where you stand depends on where you sit.” That is to say, the paradigms through which we view the world determine what and how we perceive. I have often expounded on this in my presentations over the years to a wide range of audiences. I call it “the white Volkswagen phenomena”: I never noticed white VWs until I bought one; once I was driving one they seemed to be everywhere!
Even more persuasive is the long list of paradigms that great thinkers have used to explain the world. For Adam Smith it was the invisible hand; for Marx, the ownership of the means of production; for Freud it was id, ego and superego; for Kissinger, the balance of power; and on and on. Prisms control perceptions — an insight you will find useful in both personal and managerial terms (I thought my entire presentation on this was worthy of a TED talk; the powers there did not agree!).
As for the election, in other words, I agree with Brad Schiller that “It was the economy again, stupid.” He cites the work of economist Ray Fair, whose model uses GDP growth and inflation to measure voters’ happiness with economic performance. If voters are happy, they re-elect incumbents; if unhappy, they throw them out. And if you have any doubt millions of Americans are unhappy economically, take a look at the charts in this article by Michael Libowitz. The trends are dismal:
- Real Median Income
- Wage Growth per Capita
- Wages, Credit and Transfer Payments as a Percentage of Personal Consumption
- GDP per Capita
- Labor Participation Rate
- Manufacturing Employment
- Annual Current Account Balance
- Share of Total U.S. Wealth
- Average Household Income
Finally, please keep in mind, this sorry state of affairs is not a failure of free market capitalism but of government distortion of free markets. As I have been writing for over 30 years, beneath the veneer of our supposedly free-market economy is MASSIVE government involvement DEEP into areas of economic activity such as housing, education and health care. What should be the private or personal decisions of MILLIONS of American citizens, industries and businesses concerning spending, saving, borrowing and investment are WILDLY distorted (and not in a good way!).
(See Nicole Gelinas for more on this point.)
Does Mr. Trump’s election signal the start of a shift away from this paradigm? Jeffrey Tucker certainly thinks so. Let us be optimistic and hope.