But our analysis of the political economy of the 2016 campaign points to sharp limits on what Trump or any other political force now operating can hope to achieve in the longer run. The emergence of a full blown dual economy means that the system no longer works for many Americans. Spatial imbalances in economic growth, the declining welfare state, and insistent pressures to cut public expenditures so as to lower taxes on the rich throw enormous stresses on average Americans. Many realize that their wages and working conditions are deteriorating, and that the challenges facing their children are intense.
The vast mobilizations against the establishments of both major parties that dominated the 2016 presidential struggle were a consequence of these stresses. Trump’s triumph came over the bitter opposition of older Republican elites; while the Clinton campaign had to pull out all the stops to contain the wave of protests from millions of ordinary Americans who actively supported an insurgent candidate running openly as a democratic socialist. In both parties, the new energy coming into the system from ordinary Americans is obvious. It fills many in power now with dread.
We are extremely skeptical that there is any way to put these genies back in the bottle. Trump himself has not reconciled with the establishment. Very early in Trump’s tenure, he essentially lost control of most policy on national security and was forced to make appointments that represented quite different points of view on policy toward Russia and, with some qualifications, China. Tensions between Trump and Republican Congressional leaders clearly run deep; their donor universes are strikingly different, as we will show on another occasion.
Trump’s own coalition is extremely unstable. Our analysis of how it developed over time reveals that it is made up of several layers of investor blocs with little in common other than their intense dislike of existing forms of American government. The world of private equity, intent on gaining access to the gigantic, rapidly growing securities markets of China and the rest of Asia or casinos dependent on licenses for their lucrative businesses in Macau are likely to coexist only fitfully with American industries struggling to cope with world overcapacity in steel and other products or facing twenty first century mercantilist state targeting. Substituting Mike Pence for Donald Trump would not change any of this nor would it end the all out war on the GOP establishment that Bannon and his allies are waging.
Within the Democratic Party, the desires of party leaders who to continue to depend on big money from Wall Street, Silicon Valley, health insurers, and other power centers collides head on with the needs of average Americans these leaders claim to defend. On medical care, minimum wages, unionization, and many other issues, there is no consensus; only intense wrangling behind a cloud of opaque rhetoric and increasingly hollow “resist” slogans. The continued pressures to blame the Russians for the Democrats’ failures is also doing nothing to clarify matters.