Social Disunity Approaches

a Tipping Point

 

Among the 18 advanced economies analyzed in a 2021 Pew Research study, the United States stands out as the most conflicted when it comes to questions of social unity.

According to Pew, an amazing 90% of U.S. adults perceive strong or very strong conflicts between people who support the two major political parties. By comparison, the median average across all advanced economies Pew surveyed was just 50%.

Similarly, about 70% of Americans perceive strong or very strong conflicts between people with different ethnic or racial backgrounds in the U.S. That’s a higher level than for any of the other societies surveyed. Notably, only about a quarter of the people living in Singapore or Taiwan say the same, and in Spain it’s about one-third.

When it comes to religious conflicts, the U.S. has the third-highest share of people reporting strong or very strong conflicts. The same is true for urban-rural conflicts. For reference, the only places with a larger share of the population reporting strong or very strong religious or urban-rural conflicts are France and South Korea.

 

Meanwhile, racial and ethnic discrimination is seen as a larger problem in the U.S. than in most of the other 17 countries studied. Specifically, 74% of Americans say that racial and ethnic discrimination is a serious problem in the U.S. By comparison, a median of 67% say racial and ethnic discrimination is a serious problem in the other 17 advanced economies. Only France and Italy are higher on this metric, with 82% calling it a serious problem.

Notably, Pew reports that in the U.S., those on the political left tend to see racial, religious and urban-rural conflicts as far more serious than do those on the political right. This is consistent with conclusions previously reported in Trends and it helps to explain why the so-called “social justice issues” dominate the Democrat party platform.

 

Importantly, this conflict is based on more than differing values and experiences. About 60% of U.S. partisans on both the right and left say that Americans disagree not just about policy solutions, but about the basic facts regarding what is happening. Notably, 68% of liberal Democrats, say most Americans disagree on basic facts compared to only 52% of moderate and conservative Democrats.

Meanwhile, 62% of conservative Republicans say most people disagree on basic facts, versus only 54% of moderate and liberal Republicans. Most likely, this difference in perception is due to the fact that conservative Republicans and liberal Democrats are far more media-savvy than their more moderate associates.

The post-war American consensus was formulated during the mass production era, which relied upon a unified mass media. As a result, it depended on a common set of basic facts, understood by everyone. The recent break-down of social unity is different from anything we’ve experienced in living memory, because the two Americas acknowledge two different sets of basic facts.

The fragmented media of the digital era creates a torrent of customized message streams. So, while an underlying set of basic facts still exists, people’s understanding and awareness of them depends on which of the myriad media alternatives one chooses to access. Those who get their facts filtered through Steve Bannon see a world that is unrecognizable to someone who gets their facts filtered through Joy Reid, and vice versa.

 

This creates a different context from the one into which the Silent, Boomer, X-er and even Millennial generation was born. With different views of the facts, it’s not surprising that those on the right and left respond differently to failures of the status quo.

Looking across this political chasm, people in the United States have begun to lose confidence in their political system much the way they did during the American Revolution, the American Civil War and the depths of the Great Depression. In our deeply interconnected world, many of the same symptoms are emerging in other advanced economies.

In part, the current moment of anxiety about liberal democracy is linked to frustration with how democratic societies are functioning. Pew Research Center surveys have found increasingly large shares of the public in many countries saying they are dissatisfied with the way their democracy is working

 And for many, this dissatisfaction is leading to a desire for political change. A median of 56% across 17 advanced economies surveyed in 2021 say their political system either needs major changes or complete reform. Two-thirds or more express this opinion in Italy, Spain, the U.S., South Korea, Greece, France, Belgium and Japan.

Not surprisingly, Pew’s research confirms what Trends has been observing over the past decade: Americans as well as people in other advanced societies increasingly believe that their political and economic systems need reform. In the case of the United States,

- 42% say the political system needs to be completely reformed,

- 43% say the political system needs major changes,

- 12% say it needs minor changes, and

- only 2% say that it doesn’t need to be changed at all.

That’s right. 85% of Americans say that major or complete political change is needed!

Importantly, this sentiment is higher in the U.S. than in any of the other countries studied, other than Spain and Italy, with South Korea just behind the United States. So, it’s quite possible that the BLM and January 6 protestors are simply two manifestations of a growing antiestablishment anger.

 

The growing discontent and disillusionment with the political status quo are tied to many factors, including economic performance, governmental competence and the overall fairness of the political and economic system. Research over time has shown that when people think their countries are performing poorly on these dimensions, confidence in democracy often slips.

Over the past decade-and-a-half, people around the world have experienced a global financial crisis and more recently a pandemic-driven global disruption. Coupled with the uncertainty created by the on-going techno-economic revolution, many people have grown pessimistic about the long-term economic future.

And, as history shows, economic pessimism feeds dissatisfaction with the way democracy is working and this can weaken people’s commitment to democratic values.

In 2019, Pew analyzed data from 27 countries to better understand what was driving dissatisfaction with the way democracy is working. They found that the strongest predictor of being dissatisfied with the political system was being unhappy with the current state of the national economy. Another significant predictor was how someone feels about economic opportunity. 

People who said that the statement “most people have a good chance to improve their standard of living” did not describe their country, were more likely to be dissatisfied with the way democracy was functioning.

And it’s not simply a question about how things are going today; it’s also about the economic prospects for the next generation. The spring 2021 Pew survey conducted across 17 advanced economies found that dissatisfaction with the way democracy was working was much more common among people who expected that when today’s children grow up, they would be worse off financially than their parents. 

The economic pessimists were especially likely to think their country’s political system needed major changes or needed to be completely reformed.

For example, in the United Kingdom, 61% of respondents who were pessimistic about the next generation’s financial prospects believed their country needed significant political reform, compared with just 34% of those who were optimistic that the next generation would do better financially than their parents.

However, this wasn’t true everywhere; economic optimists in the United States were almost as eager for dramatic political change as economic pessimists.

 

The same survey highlighted the impact that the COVID-19 pandemic has had on attitudes toward democracy in various countries. People who believe their country is doing a poor job of dealing with the pandemic are consistently more likely to say they are dissatisfied with the way their democracy is working and that they want significant changes to the political system.

For instance, 73% of Germans who feel their country is handling the crisis poorly say they believe their political system needs major changes or should be completely overhauled, while just 32% of those who think the country is handling it well, expressed this view. This should frighten the Biden administration which has seen it’s COVID-related performance plummet in recent months.

Beyond the state of the economy and public health, opinions about whether the country was living up to basic principles of fairness and justice affected how people feel about the political system. For example, “are political elites able to manipulate the system to their own advantage?”

In many countries, large shares of the public said yes. Across 27 nations Pew polled in 2018, a median of 54% said that most politicians in their country are corrupt. This sentiment was especially high in Greece (at 89%) and Russia (at 82%). 

However, when Pew asked Americans a similar question in the fall of 2020, a surprising 67% said, “most politicians are corrupt.” In the same survey, 56% of Americans said that “elected officials don’t care what ordinary people think” and only 54% said they trusted the government, even “somewhat,” to do what was right for the country. Meanwhile only 44% of Americans said they were satisfied with the functioning of democracy.

Perceptions of fairness, or unfairness, in the judicial system also shape how people feel about their democracy. For example, in Pew’s 2018 survey, 68% of those Hungarians who felt the court system in their country did not treat everyone fairly were dissatisfied with democracy. Meanwhile, only 32% of those who said they had a fair judiciary were similarly dissatisfied.

What’s the bottom line?

The United States is unique among the world’s major countries because it’s primarily the product of an ideological consensus rather than a dominant ethnicity or geography. Furthermore, there is substantial evidence that this country has succeeded largely because its “national consensus” has successfully evolved in a series of waves, beginning almost 250 years ago and continuing today.

Ninety percent of the people on both the right and the left recognize that strong conflict exists between those who lean Republican and those who lean Democrat. They also recognize that this is not simply a question of policy preferences; it’s a matter of which facts they choose to consider. Furthermore, that distrust has only been exacerbated by rapid changes in the economy, responses to the pandemic and increasing political turmoil.

It’s becoming increasingly clear that fundamental change is required, but it’s far from certain what that change should look like and it remains especially difficult to assess the timing of the radical change.

As with other great inflection points in history, investors, managers, consumers and others must strive for resiliency and flexibility, being ready to seize opportunities and respond to threats as they arise.

 

Given this trend, we offer the following forecasts for your consideration.

First, a new American consensus will emerge during the 2020s which will address the enormous conflicts of 21stcentury life.

It’s becoming increasingly clear that the consensus which emerged from the Great Depression and World War II is no longer meeting the needs of most American. And more importantly, surveys indicate that Americans are no longer willing to accept the status quo.

In fact, research shows that 85% of Americans believe our political system needs major change or complete reform. As with prior renewals, this one will leave America stronger and better, but it will not necessarily benefit everyone equally and there will be sub –stantial resistance from entrenched interests.

Second, the realignment of political parties which became apparent in the 2016 election will continue through the 2020s resulting in what we’ve called America’s Sixth Political Party System.

Like each of the prior political realignments, beginning with Jefferson & Hamilton, this one will enable and support a new “national consensus.” To understand why this is necessary, think back to the last such change. The Republican-dominated era that emerged from the American Civil War and provided direction through the Roaring 20s was ideal for continental expansion and private sector hegemony.

When the Great Depression and World War II ushered in an era of mega-programs, the United States entered a Democrat-controlled era, in which big government dominated and most struggles were over how big and invasive that government would be. FDR and LBJ were able to create a huge shift toward centralization. The de facto political consensus was amenable to these changes and consistent with the zeitgeist of the mass-production techno-economic revolution.

And until recently, the competition between America’s political parties pivoted around a point near the center of the political spectrum. For instance, even when Republicans won a huge midterm victory over Democrats in 1994, Pew Research Center assessed the median position for both parties near the center of the ideological spectrum, with Democrats at 4.5 and Republicans at 6.5.

And by 2004, median Republican had moved somewhat to the left, approaching the median Democrat. But that’s all changed with Democrats moving dramatically to the left by 2017 and certainly even further to the left since then.

Now, as the recent elections in Virginia highlight, this radical shift to the left, particularly on issues related to education, crime and taxes, is alienating moderate white, Hispanic, and black voters who had formed the bedrock of the Democrat constituency since World War II. Doing so could permanently shift the formerly Democrat voters to an increasingly populist Republican party creating a new political party system aligned with the new consensus.

 

Third, just as the New Deal directly addressed the crisis of the Great Depression, the “Make America Great Again” agenda will address the disappearing American Dream for most Americans.

Just as many parts of the New Deal were declared unconstitutional, we can expect serious push-back against MAGA from state governments and the courts. However, as the 1934 election validated America’s embrace of the New Deal agenda, the 2022 election will validate its embrace (or rejection) of the MAGA agenda, which will be encapsulated in 11 differentiating platform planks:

1. Ending racial politics and building a color-blind government.

2. Treating Socialism as a foreign adversary and using all force necessary to stop it from destroying our country.

3. Ending our economic relationship with communist China.

4. Term limiting government bureaucrats as well as politicians.

5. Ending woke policies related to gender and abortion.

6. Ending voter fraud and protecting the integrity of our elections.

7. Ending soft-on-crime policies that are destroying our cities and killing innocent Americans.

8. Securing U. S. borders, including finishing the southern border wall.

9. Maximizing freedom of speech and religion, while limiting and regulating “big tech.”

10. Maximizing America’s energy & supply chain independence, while minimizing counter-productive regulation. And,

11. Enabling a cultural renaissance by teaching patriotic values and facilitating school choice.

Fourth, in 2022 and 2024 Democrats will suffer from embracing so-called “Democratic Socialists” like Bernie Sanders and members of the “squad.”

Historically, Democrats have succeeded by rhetorically distancing themselves from the term “socialism.” That’s because, despite the blurred definitions taught in schools, Americans still have a visceral aversion to a “collectivist economy.” 

When asked about their impressions of “socialism” and “capitalism,” 32% had a very negative impression of socialism, while only 10% of Americans had a very negative impression of capitalism. On the flip side, 24% had a very positive impression of capitalism, while only 9% of Americans had very positive impression of socialism.

More importantly, 33% of “Democrat-leaning voters” say they have a negative or somewhat negative view of socialism, while only 15% of Republican-leaning voters say they have a positive or somewhat positive view of socialism. By explicitly welcoming those marching under the banner of “socialism,”

Democrats risk writing-off 33% of their traditional voters, while standing a relatively small chance of attracting the 15% of Republican voters who are not hostile to socialism. And,

Fifth, in 2022 & 2024, American voters will reject the Globalist left’s Great Reset Agenda, setting up decisive adoption of the MAGA agenda.

The World Economic Forum has been promoting the “Great Reset,” which was previously critiqued in Trends. Among the likely voters surveyed by Rasmussen, only 29% were familiar with the Great Reset and 52% of those were opposed to it.

Meanwhile, 53% of voters don’t believe international institutions like the United Nations, World Economic Forum, and International Monetary Fund should be influential in creating regulations governing U.S. businesses.

The survey also found that 45% believe the highest priority for businesses should be providing individual consumers with high quality products and services at the lowest prices, while only nine percent of voters think trying to stop climate change should be the top priority for business, and a mere one percent think using business resources to pursue social justice causes should be a top priority.