by Bill O’Grady
Last week, we defined important terms that shape the political alignments and examined the coalitions that mostly define the political sphere.[1] This week, we make some general observations of how the coalitions interact, discuss the “natural” pairings of the coalitions and examine historical examples. We will conclude with market ramifications.
Observations
There is a division between class and identity. This is probably the greatest cause of confusion among political pundits and the general public alike. Sometimes voters will select a candidate who is detrimental to their economic interests. They usually do this because, at the time of their vote, identity was a stronger factor than class. Because it is more emotional and tribal, identity makes it hard to project outcomes. Class is fairly easy to observe; one can use wealth as a proxy. But identity, because it is multi-dimensional and somewhat fluid, can turn elections in unexpected ways. Our “laundry list” of surprises, the anti-establishment political outcomes noted in Part I of this report, were partly due to decisions based on identity.
Political leaders tend to use identity to woo voters outside the coalition of their class. This is done by either claiming affiliation to a group or by warning against the negative outcomes if another group takes office. Nearly every campaign story has some “origin myth,” where the candidate (usually RWE or LWE) harkens back to some period of their lives when they were living a hardscrabble existence so they can claim affinity to the populists to attract their vote. In some cases, the candidate is so removed from struggle that they have to cite the origin myths of their parents, grandparents or great-grandparents.
The other tactic often deployed is to suggest that if the other establishment candidate wins he/she will support policies that will undermine a populist group’s identity. For example, if a LWE candidate is trying to gain support from LWP voters, he will cite the threat to immigration or reproductive rights if the other candidate wins. A RWE may use similar tactics on the RWP, suggesting a LWE candidate will undermine gun ownership or religious liberties.
[1] A refresher on the coalitions—RWE: right-wing establishment; RWP: right-wing populist; LWE: left-wing establishment; and LWP: left-wing populist.