revolution(s) 2016 vf

7/25/2019 Revolution(s) 2016 VF

1/42

, www.TheLafayetteBlog.com, GP Goldstein, 2016

Revolution(s) 2016

www.TheLafayetteBlog.com
http://www.thelafayetteblog.com/http://www.thelafayetteblog.com/


2/42


Another exciting election year


3/42


http://www.TheLafayetteBlog.com

Two French dudes, former expats in the US & US politicaljunkies, start a political blog as the campaign for US

Presidency heats up
http://www.thelafayetteblog.com/http://www.thelafayetteblog.com/http://www.thelafayetteblog.com/http://www.thelafayetteblog.com/http://www.thelafayetteblog.com/


4/42


By May 2016, Republican & Democrats are neck-and

neck

Source: http://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.html
http://www.thelafayetteblog.com/http://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.thelafayetteblog.com/


5/42


.thats usually too early to predict anything

Source: http://www.nytimes.com/interactive/2016/05/25/upshot/when-should-you-start-to-care-about-polls.html?action=click&contentCollection=us&module=NextInCollection&region=Footer&pgtype=article&version=newsevent&rref=collection%2Fnews-event%2Felection-2016


6/42


but the laws of White House elections should favor a

Republican: only once in the last 64 years has the same party

won the White House 3 times in a row.

Bush

19561952 19641960 1968 1972 19801976 1984 1988 19961992 2000 2004 2008 2012 2016?

# Elections after 2 consecutive mandates: 6 (1960, 1968, 1976, 1988, 2000, 2008)

# Elections after 2 consecutive mandates, won by sitting party: 1 (1988)

Probability for sitting party NOT to win after 2 consecutive mandates: 5/6 (83%)


7/42, www.TheLafayetteBlog.com, GP Goldstein, 2016

And then, theres Axelrod Theory: the new President

is the polar opposite of the precedent President

1960 1968 1976 1980

Kennedy Johnson Humphrey Carter Carter

Eisenho

wer

Nixon Nixon Nixon/

Ford

Ford Reagan

1988 1992 2000 2008 2016?

Dukakis Clinton Clinton Gore Obama

Reagan Bush

(HW)

Bush

(HW)

Bush

(GW)

Bush

(GW)

McCain

2016: Who is

polar opposite

to Obama?

Young

vs. Grand-father

Puritanical vs

Morally bankrupt

Lack of charisma Bush vs

Larger-than-life Reagan

Intl human rights

vs. Patriot

Minority & Intellectual

Vs. reformed frat boy

Old lack of charisma

Vs. Young & cool

Source: http://www.nytimes.com/2016/01/25/opinion/campaign-stops/the-obama-theory-of-trump.html



Usually, incumbent Presidents job approval is critical

for the incumbent party

By May,

too

close to

call

Source: realclearpolitics



Often, incumbent party margin of victory depends on

the economics

3rd

Mandate 3rd

Mandate

Source: Nathan Silver, NY Times, 2011

ISM Manufacturing Index (business confidence)= Explains 46 % of results variations

Real GDP Growth Rate, Q1-Q3 of election year= Explains 33% of results variations

Source: Nathan Silver, NY Times, 2011

Note: the utmost importance by economic factors to determine electoral outcomes in the Western World has been

established in Lewis-Beck, Stegmaier (2000), Economic Determinants of Electoral Outcomes
http://www.thelafayetteblog.com/https://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttps://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttps://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttps://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttps://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttps://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttps://www.researchgate.net/publication/246007451_Economic_Determinants_of_Electoral_Outcomeshttp://www.thelafayetteblog.com/



So, by May 2016, looking at ISM.

too close

to call butin a typical

year,

probably

more a

Republican

Source: http://www.tradingeconomics.com/united-states/business-confidence
http://www.thelafayetteblog.com/http://www.tradingeconomics.com/united-states/business-confidencehttp://www.tradingeconomics.com/united-states/business-confidencehttp://www.tradingeconomics.com/united-states/business-confidencehttp://www.tradingeconomics.com/united-states/business-confidencehttp://www.tradingeconomics.com/united-states/business-confidencehttp://www.tradingeconomics.com/united-states/business-confidencehttp://www.tradingeconomics.com/united-states/business-confidencehttp://www.thelafayetteblog.com/




The Trump surprise



Was this a popular joke? Trumpy McTrumpface? to

paraphrase the name picked up in a UK popular online

contest to name a UK polar ship..

Source: http://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.html
http://www.thelafayetteblog.com/http://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.chicagotribune.com/news/opinion/commentary/ct-trump-no-joke-president-twitter-perspec-0525-md-20160524-story.htmlhttp://www.thelafayetteblog.com/



However, Republican primary elections had confirmed

strong shift to the right

Moderates (Bush+Fiorina+Kasich+Christie )= 38.3% in NH, 8.4% in IAnever a majority !

Rubio not really a moderate: one of the top 5 most conservative US senator
http://www.thelafayetteblog.com/http://www.huffingtonpost.com/entry/rubio-moderate-conservative_us_56cf3f46e4b0871f60ea66cbhttp://www.huffingtonpost.com/entry/rubio-moderate-conservative_us_56cf3f46e4b0871f60ea66cbhttp://www.thelafayetteblog.com/



This is logical: in general, Republicans have

moved further to the right in the last 15 years

Source: Gallup



While left wing Democrats were also progressing

Source: Gallup



And overall partisan antipathy has increased over

the last 20 years

Source: Pew Research Center, quoted in http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0
http://www.thelafayetteblog.com/http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.nytimes.com/2016/06/24/us/politics/partisanship-republicans-democrats-pew-research.html?_r=0http://www.thelafayetteblog.com/



Something deeper is going on

Income growth has stopped for poorest by mid 70s



perhaps triggered by the decline of manufacturing

jobs while unionization has decreased

Source: Bureau of Labor Statistics



leading to true human costs:

Life Expectancy has declined for US white over 45 years old

Source: http://www.pnas.org/content/112/49/15078.full.pdf

By midlife, you know you will never live/succeed as well as your parents.

For 2

nd

gen. migrants (US Hispanics), its a different narrative.
http://www.thelafayetteblog.com/http://www.pnas.org/content/112/49/15078.full.pdfhttp://www.pnas.org/content/112/49/15078.full.pdfhttp://www.pnas.org/content/112/49/15078.full.pdfhttp://www.thelafayetteblog.com/



Leading to anger and political polarization (shift to

extremes) as inequalities grew

(measureofsocialinequalities:thehighertheGINI,thehighersocialinequalities)

Source: http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/
http://www.thelafayetteblog.com/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.theatlantic.com/politics/archive/2014/04/the-polarized-partisan-geography-of-inequality/360130/http://www.thelafayetteblog.com/




The Trump surprise

Beyond Trump



Trump is not a Conservative Republican

Authoritarian/Nativist Against Veteran John McCain

Against Mexicans / Hispanics (the wall)

Bar Muslims from entry

Against women (Fiorina, Megyn Kelly)

Pro killing family of terrorists

Pro-Mussolini / Pro-David Duke?

Anti-Press/ Against 1stAmendment? / Bar

Washington Post

Anti-Rule of Law? (threat to Judge Curiel) Ok to use violence against opponents?

Insults, hands size

Pro-Brexit

Liberal? Pro-planned parenthood

OK with LGBT/Toilets Anti foreign interventions

Anti global-trade

Pro hedge fund taxation (?)

Real Bizarre Ready to default on creditors???

Pro-Putin, anti-NATO, anti-UK??

Anti-Proliferation (Japan, S. Korea, S. Arabia)???



Trump: Rise of the Authoritarian Candidate

Right-Wing Authoritarianism (RWA):

Ready to submit to higher authority, Hostile & punitive to people who dont adhere to perceive societal norms

Source: http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/
http://www.thelafayetteblog.com/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://blogs.lse.ac.uk/usappblog/2016/02/27/donald-trumps-victories-show-that-authoritarian-voters-are-now-in-control-of-the-republican-nomination-process/http://www.thelafayetteblog.com/



Something deeper is going on:

Redistribution has diminished in the 1980s

Conservative

revolution

2008: start of

Great recession

Source: https://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg Based on http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets
http://www.thelafayetteblog.com/https://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpghttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttp://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-bracketshttps://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpghttps://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpghttp://www.thelafayetteblog.com/


25/42


Meanwhile, Household debt has increased in the 1980

2007 period: Diminished redistribution was offset by debt.

Conservative

revolution

Source: U.S. Bureau of Economic Analysis, https://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.html
http://www.thelafayetteblog.com/https://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttps://www.creditwritedowns.com/2008/07/chart-of-day-household-debt-vs-savings.htmlhttp://www.thelafayetteblog.com/


26/42


Till maximal leverage for the nation as a whole was

reached by 2008: The Great Recession is a private debt crisis(like Japan 1990 & US 1929)

Tot Debt

GDP

=x2.5

Source: http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/
http://www.thelafayetteblog.com/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/http://www.thelafayetteblog.com/


27/42


Now the kicker: Right-Wing Authoritarianism (RWA) rises

during Financial/ Debt-led recession, not normal recession

0

5

10

15

20

25

30

35

Year 1 Year 2 Year 3 Year 4 Year 5

Normal Recession

Financial Recession

% vote shares for far-right parties, 1870-2014

Sources: Funke, Schularick, Trebesch, Politics in the Slump: Polarization and Extremism after Financial Crises, 1870-2014 (2015)

[] Importantly, we do not observe

similar political dynamics in normal

recessions or after severe

macroeconomic shocksthat are not financial in nature.


28/42



The Trump surprise

Now, what?


29/42


Revolution(s) in the Western World & Beyond

Brexit


30/42


Meanwhile, in the UK, inequalities have also grown

DecileDecile

1stDecile (lowest)

9th Decile (highest)

Source: https://ourworldindata.org/incomes-across-the-distribution/

x3.5

x4.3 (+25% vs. 1979)

In the US: +28%

(OECD)
http://www.thelafayetteblog.com/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/https://ourworldindata.org/incomes-across-the-distribution/http://www.thelafayetteblog.com/


31/42


and grown

Source: p.41, http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/27_01_10_inequalityfull..pdf

Share of total personal after tax income of the top 0.05%, 0.1%, and 0.5%, UK, 1937-2000

(percentage of total after tax income)
http://www.thelafayetteblog.com/http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/27_01_10_inequalityfull..pdfhttp://news.bbc.co.uk/2/shared/bsp/hi/pdfs/27_01_10_inequalityfull..pdfhttp://news.bbc.co.uk/2/shared/bsp/hi/pdfs/27_01_10_inequalityfull..pdfhttp://news.bbc.co.uk/2/shared/bsp/hi/pdfs/27_01_10_inequalityfull..pdfhttp://news.bbc.co.uk/2/shared/bsp/hi/pdfs/27_01_10_inequalityfull..pdfhttp://www.thelafayetteblog.com/


32/42


Political polarization has increased - but really since the

2008 Crisis (UK Welfare state may have ease tensions before)

UKIP

On the right:Rise of UKIP in opinion polls, 2010-2015

On the left:Surprise win by Corbyn in 2015

leadership contest

Source: http://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-

victory.html, https://en.wikipedia.org/wiki/United_Kingdom_general_election,_2015

Source: wikipedia
http://www.thelafayetteblog.com/http://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttps://en.wikipedia.org/wiki/United_Kingdom_general_election,_2015https://en.wikipedia.org/wiki/United_Kingdom_general_election,_2015https://en.wikipedia.org/wiki/United_Kingdom_general_election,_2015http://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.dailymail.co.uk/news/article-3170221/Poll-finds-Corbyn-course-victory.htmlhttp://www.thelafayetteblog.com/


33/42


Meanwhile, as in the US, UK experienced a x2.5+ increase in

household debt over the last 30 years till 2008

Debt as% GDP

Source: http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/
http://www.thelafayetteblog.com/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://touchstoneblog.org.uk/2015/02/uk-household-debt-still-amongst-the-highest-in-the-world/http://www.thelafayetteblog.com/


34/42


Household debt, during recession, deepens

downturns and reduces net income per capita

Source: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q304.pdf

Bank of England, Quarterly bulletin, Q3 2014
http://www.thelafayetteblog.com/http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q304.pdfhttp://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q304.pdfhttp://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q304.pdfhttp://www.thelafayetteblog.com/


35/42


and income per capita is one of the best predictor

for Leave vote

% vote Leave

GVA per Capita,

In GBP

London

South East

East

North West

South West

North East

East Midlands

West MidlandsYorkshire & the Humber

Source: The Lafayette Blog, based on https://en.wikipedia.org/wiki/Countries_of_the_United_Kingdom_by_GVA_per_capita ;

(aka regional GDP)
http://www.thelafayetteblog.com/https://en.wikipedia.org/wiki/Countries_of_the_United_Kingdom_by_GVA_per_capitahttps://en.wikipedia.org/wiki/Countries_of_the_United_Kingdom_by_GVA_per_capitahttps://en.wikipedia.org/wiki/Countries_of_the_United_Kingdom_by_GVA_per_capitahttps://en.wikipedia.org/wiki/Countries_of_the_United_Kingdom_by_GVA_per_capitahttp://www.thelafayetteblog.com/


36/42



Brexit

Europe & China


37/42


Beyond the USand Brexit: Right Wing

Authoritarianism is growing everywhere

Source:New York Times, May 2016


38/42


and China could be next, too

Source: http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865
http://www.thelafayetteblog.com/http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865http://www.thelafayetteblog.com/


39/42



Brexit

Europe & China

Last thoughts


40/42


Last thoughtsUS Elections Update

As of 6/26/2016, the overall picture is slightly better for the Democrats: business confidence continues to

be on the rebound; Obamas job approval stands at a positive net +5 pts; Bernie Sanders has effectively

ended his campaign and has somehow rallied Hillary. Consequently, Clinton beats Trump by approx. 7 pts

at national level.

Among Republicans, there is continued disarray over Trumps conduct. After the attacks against Judge

Gonzalo Curiel and the innuendos against Pres. Obama post Orlando terror attack, cracks have further

reopened. Ryan and McConnell have directly criticized the presumptive nominee; corporate money has

dried up for the Convention; Sen. Kirk from IL has rescinded his support and Conservative Grandee George

Will has actually decided to leave the GOP. There are renewed talks of a contested conventionthough

the path to a different nominee seems very elusive.

That is perhaps because despite all the gaffes or beyond-the-norm provocations by Trump, he is still

has not fully collapsed in the polls. Clinton beats Trump by 7 ptsbut we are within the 8 points variation

to election date. Around this time, in 1980, Reagan was trailing Carter by 10 points (!). While Trumps

position has been damaged by his self-inflicted wounds, we have not seen yet major scandals thrown atClinton. We dont know how resilient her candidacy will be. However, we start having an idea of the

resiliency of Trumps candidacy. Latest poll in Ohio put him in a tie with Clinton; about the same in

Pennsylvania; and hes only 3 points below in Florida latest CBSNew/YouGov poll and overall in a tight race

in a couple of battleground states. That, after creating concern and consternation among the top ranks of

the GOP Leadership during June. This begs to pause and reflect on the revolutionary dynamics of this

electoral cycle.
http://www.thelafayetteblog.com/http://www.tradingeconomics.com/united-states/business-confidence/forecasthttp://www.tradingeconomics.com/united-states/business-confidence/forecasthttp://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.cbsnews.com/news/poll-donald-trump-hillary-clinton-poll-florida-north-carolina-wisconsin-colorado-battleground-states/http://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.htmlhttp://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.htmlhttp://www.tradingeconomics.com/united-states/business-confidence/forecasthttp://www.tradingeconomics.com/united-states/business-confidence/forecasthttp://www.thelafayetteblog.com/


41/42


Last thoughtsInequalities, Debt

& The Western World

Trumps appeal in the US and the Brexit vote in the UK may be the same expression of a common deep

upheaval across the pond, and actually across the Western World.

In the US and in the UK, there is a common story of considerable increase in household debt per GDP,

partly to offset a reduction in taxes and redistribution, ending finally with a financial crisis once leverage

was mechanically to high with regards to GDP. Rise in inequalities in both countries over the last 30-40

years seem to have push for further anger and political extremism. Furthermore, Funke, Schularick &

Trebesch (2015) show clearly for the first time the historical link between debt default and rise of Right-

Wing Authoritarianism (RWA). One hypothesis (not in the study, so to be tested!) is that:

(a) the have-notswant the richest to share, have nothing to lose, and will side with Left-Wing or

Extreme Left-Wing in times of grave macro-shock;

(b) the could-have are afraid to lose what they already have (especially a roof) after debt default.

They are scared to be dispossessed, are thus not willing to share, and will perceived others as

potential threats. The sentiment to lose what was perceived as legitimately owned could extend to

status. This could explain the link with political rise in RWA.

In both countries, the younger generation is turning either more progressive (in the US) or more

internationalist (in the UK), signaling a limitation to the RWA revolution. In a larger sense, the early

adopter segmentsthe younger ones, the most educated oneshas moved beyond the national frame.

This marks a departure with national elites back 80 years ago, in the 1930s.It must also be noted that

the early adopters either are still too young to lose a house from debt default; or are financially

sheltered from repossession.


42/42

So, what?

The Western World is faced with a centennial threat, comparable to the 1930s

(though not as bad.. So far. A Slow Crash). Still:Gradual measures will not cut it.

The good news: weve already been there (80 years ago)and hopefully we can

remind ourselves of old lessons. Besides, this time, elites are not nativist (at least in

the US/UK)

So, to finally confront the rise in RWA, fight its causes:

inequalities (through higher redistribution investment in human capital?)

but also household debt(with exceptional one-off debt relief?)

this would converge with the need for a return for some sort of Keynesian

economics, as per The Economist in February 2016.
http://www.economist.com/news/leaders/21693204-central-bankers-are-running-down-their-arsenal-other-options-exist-stimulatehttp://www.economist.com/news/leaders/21693204-central-bankers-are-running-down-their-arsenal-other-options-exist-stimulate