The election is far from over, and given the pattern of this election, nothing can be taken for granted. So while (at the moment) Hillary Clinton appears to be winning, less than two weeks remain.
Dov Gertzulin's DG Capital has had a rough start to the year. According to a copy of the firm's second-quarter investor update, which highlights the performance figures for its two main strategies, the flagship value strategy and the concentrated strategy, during the first half of 2022, both funds have underperformed their benchmarks this year. The Read More
First, shifts in the behavior of the US affect geopolitics globally. Second, this election has revealed some profound changes in the underlying dynamics of American politics.
The New Deal shaped an unlikely coalition
The frame for thinking about this issue lies with the two major political parties. I want to begin with the Democrats because it is the party that has undergone the most profound change. It is also the party in which change is least discussed.
The framework of the Democratic Party was set in the New Deal. It was an unlikely coalition of Southern whites, Northeastern industrial workers, and African Americans. Its core was based on poverty.
The Civil War ended 67 years before the New Deal, and the South remained impoverished. In the north, the Great Depression had crushed both the ethnic industrial class (many of whom were just a generation or two away from immigration) and those African Americans who moved north after the Civil War.
The Democratic Party won the election of 1932 because it cast itself against the economic and social disruption of the Depression. It created a coalition of those who had been most affected.
The Republican coalition was focused on small businesses, small towns, the more prosperous farmers, professionals, and the upper class. It was the party of both wealth and culture. It held a disdain for the South that dated back to slavery. It also felt an unease about the waves of Eastern and Southern European immigrants and massive industrial urbanization.
This was the coalition that had ruled the country since the Civil War. But its power had been broken by the Depression.
The Republicans argued that the Depression was caused by the reckless consumption and lifestyle of the 1920s. Their solution was a dose of austerity. The Democrats’ view was that this was a systemic failure of capitalism… one that required state intervention.
The two coalitions lasted until 1964 when Barry Goldwater took the South away from the Democrats. Goldwater was crushed in the election, but he led a coalition shift that reshaped American politics.
The Democrats retained Northeastern ethnic workers and a growing black voting bloc. The Republicans retained the wealthy, the professionals, farmers, and a shrinking small town base.
But in 1964, Southern Democrats shifted to the Republican party. This move resulted in 28 years of Republican presi