The 21st Century’s Greatest, Ghastliest Showman. by Megan Garber

/ Nov 10, 2024 at 12:33 AM

In early 2017, just after Donald Trump took residency in the White House, the New York Times technology columnist Farhad Manjoo engaged in an experiment. He spent a week doing all he could to ignore the new president. He failed. Whether Manjoo was scrolling through social media or news sites, watching sitcoms or sports—even shopping on Amazon—Trump was there, somehow, in his vision. In those early days of his presidency, Trump had already become so ubiquitous that a studious effort to avoid him was doomed. “Coverage of Mr. Trump may eclipse that of any single human being ever,” Manjoo observed. Trump was no longer a single story; he was “the ether through which all other stories flow.”

This week, the former president made himself inescapable once more. He will have another four-year term in office, the Trump Show renewed for a second season. And his political power has been ratified, in part, by a dynamic that Manjoo observed at the start of Trump’s first presidency: His celebrity changes the politics that surround him.

Trump is a showman above all, which has proved to be a major source of his omnipresence. He is image all the way down. He is also narrative shed of its connection to grounded truth. He has endeared himself to many Americans by denigrating the allegedly unchecked power of “the media”; the irony is that he is the media.

The book that best explains Trump’s dominance may well have been published in 1962. In The Image: A Guide to Pseudo-Events in America, the historian Daniel J. Boorstin described the image as a medium—a photograph, a movie, a representation of life, laid out on pulp or screen—that becomes, soon enough, a habit of mind. The image doesn’t merely replicate reality; it also surpasses it. It normalizes spectacle so thoroughly—life, carefully framed and edited and rendered in Technicolor—that reality itself can seem boring by comparison. Images, in Boorstin’s framework, are intimately connected to many of the other phenomena that shape so much of American culture: celebrity, fantasy, all that gives rise to the “thicket of unreality which stands between us and the facts of life.”

In describing imagery in action, Boorstin pointed to Phineas T. Barnum, the famous peddler of spectacular hoaxes and lustrous lies. Barnum was a 19th-century showman with a 21st-century sense of pageantry; he anticipated how reality could evolve from a truth to be accepted into a show to be produced. Barnum turned entertainment into an omen: He understood how much Americans would be willing to give up for the sake of a good show.

Trump is Barnum’s obvious heir—the ultimate realization of Boorstin’s warnings. The difference, of course, is that Barnum was restricted to brick-and-mortar illusions. The deceptions he created were limited to big tops and traveling shows. Trump’s versions go viral. His humbugs scale, becoming the stuff of mass media in an instant. Trump lost the 2020 election, and his refusal to accept the defeat became known, in short order, as the Big Lie. His resentments become other people’s anger, too. In the introduction to his 2004 book Trump: Think Like a Billionaire, the future president includes a quote from a book about the rich—a classic Trumpian boast doubling as an admission. “Almost all successful alpha personalities display a single-minded determination to impose their vision on the world,” it reads, “an irrational belief in unreasonable goals, bordering at times on lunacy.”

The assertion was borrowed from the writer Richard Conniff, who would later profess his shock that the line—he had intended it as an insult—had been used by Trump to bolster his own brand. Trump: Think Like a Billionaire was published not long after the premiere of The Apprentice, earlier in 2004; the show, as it reimagined reality as a genre, also transformed its host into a star. When Trump announced his first presidential candidacy, he staged the whole thing in the gilded atrium of the New York City tower emblazoned with his name, a building that was real-estate investment, brand extension, and TV set. Many, at the time, assumed that Trump was running, essentially, for the ratings—that he might try to channel his campaign into an expansion of his power as an entertainer.

In many ways, it turns out, Trump has done precisely that—despite, and because of, his ascendance to the presidency. Barnum, too, converted his fame as a showman into a second life as a politician. While serving in the Connecticut legislature, he crusaded against contraception and abortion, introducing a law that would become infamous for its repressions of both. Trump’s neo-Barnumian status has not only allowed him to exercise similar power over people’s lives; it has also enabled him to convince a large portion of the American electorate of the supreme rightness of his positions.

In 2015, during Trump’s first presidential campaign, HuffPost announced that it would not report on him as part of its political coverage; instead, it would write about his antics in its Entertainment section. “Our reason is simple: Trump’s campaign is a sideshow,” the publication declared. “We won’t take the bait.”

That category confusion explains a lot about Trump’s durability. He defies the old logic that tried to present politics and entertainment as separate phenomena. He is a traditional politician, and he isn’t at all. He is a man—a person shaped by appetites and whim and spleen—and a singular one, at that. But he has also styled himself as an Everyman: an agent of other people’s resentments, fear, and anger.

It didn’t matter that Trump lost the presidency in 2020. It didn’t matter that he was impeached and impeached again, held liable for rape, convicted of fraud. In another time, with another figure, any one of those developments would have meant a culmination of the narrative, the disgraced politician slinking into obscurity. The end. But Trump has used his remarkable fame—its insulating power—to argue that he is not a politician, even as he has become an über-politician. Each of his might-have-been endings, as a result, has served for him as a new beginning. Each has been an opportunity for him to reset and begin the narrative anew, to double down on his threats and hatreds. The effect of attempting to hold Trump accountable, whether in the courts or in the arena of public opinion, has been only to expand the reach of the spectacle—to make him ever more unavoidable, ever more inevitable.

“It’s probably not a good idea for just about all of our news to be focused on a single subject for that long,” Manjoo wrote in 2017. He was absolutely correct. But he could not foresee what Trump had in store. “Politics is downstream from culture,” the old Breitbart saying goes. But Trump’s reelection is one more piece of evidence that politics and culture mingle, now, in the same murky water. Both seethe in the same dark sea. Trump once again has carte blanche to impose his vision on the world. And his audience has little choice but to watch.

The Cumulative Toll of Democrats’ Delusions. by Michael Powell

The Cumulative Toll of Democrats’ Delusions. by Michael Powell 

The Atlantic - Politics by Michael Powell / Nov 9, 2024 at 10:27 PM

Representative Ritchie Torres, a New York Democrat, cut me off before I even finished my question: Congressman, were you— “Surprised? No, I was not surprised,” Torres, who represents a poor and working-class district in the Bronx, told me. “Much of my side in politics, and much of the media, was in a state of self-deception. We confused analysis with wishful thinking.”

Which is to say, too many in Torres’s party assumed that they were heralds of virtue and endangered democratic values and that Americans would not, as a despairing New York Times columnist put it this week, vote for an “authoritarian grotesquerie.”

This, Torres argued, was purest delusion. Inflation and steeply rising rates on credit cards, car loans, and mortgages may not have been President Joe Biden’s fault, but they buffeted Americans. The immigration system was broken, and migrants swamped shelters in big cities. There’s no need to assume—as some commentators have after Donald Trump’s sweeping victory Tuesday—that the United States has a uniquely fallen electorate; across the globe, voters have tossed out governments on the left and right over the disruptions of the past five years. “A majority of Americans disapprove of Biden’s performance and felt they were worse off,” Torres said; Vice President Kamala Harris, the Democratic nominee, “was not responsible for the inflation, but objectively, that was a near-insurmountable disadvantage.”

[Thomas Chatterton Williams: What the left keeps getting wrong]

Torres pointed as well to the cumulative toll taken by progressives who for at least a decade have loudly championed cultural causes and chanted slogans that turned off rank-and-file Democrats across many demographics. “Donald Trump had no greater friend than the far left,” Torres told me, “which alienated historic numbers of Latinos, Blacks, Asians, and Jews with absurdities like ‘Defund the police’ or ‘From the river to the sea’ or ‘Latinx.’”

The result is the reality that Americans woke up to on Wednesday. The overwhelming majority of counties in the nation, even some of the bluest of blue, had shifted rightward. The Republicans had broken down the door to the Democrats’ house and were sitting in the living room drinking its beer (or wine, as the case might be). On the day after the election, I clicked through a digital election-results map of New Jersey. Biden in 2020 took New Jersey, a Democratic Party bastion, by nearly 16 percentage points over Trump; Harris won the state by a more parsimonious five points. Everywhere, Republicans sanded down Democratic margins. In the state’s northeast corner, across from New York City, Biden had taken prosperous Bergen County by 16 percentage points in 2020; Harris took the same county by three points. Far to the south, in Atlantic County, which includes the deteriorating casino capital of Atlantic City, Biden had won by seven points; Trump took it by four points.

Torres emphasized that in his view, Harris ran a vigorous and effective campaign, given the circumstances. He did not discern many missteps. Although she sometimes tossed up clouds of vagueness when asked about past positions, she was disciplined and avoided mouthing the buzzwords of the cultural left during her 2024 campaign. But she could not sidestep her previous concessions to liberal cultural fevers, as she discovered when the Trump campaign bludgeoned her with endless commercials highlighting her decision, during her bid for the 2020 Democratic presidential nomination, to champion state-funded gender-transition surgery for prisoners.

In recent election cycles, Democrats have invested much hope that “people of color”—the widely varied and disparate peoples long imagined to be a monolith—would embrace an expansive list of progressive causes and rearrange American politics.

Politics, alas, is more complex than simply arranging virtuous ethnic and racial voting blocs, and Trump’s gains this year among nonwhite voters are part of a longer trend. Four years ago, even as Biden triumphed, a majority of Asian and Latino voters in California rejected a ballot proposition that would have restored affirmative action in education and hiring.

For some anti-Trump and progressive commentators, the leakage of Latino, Black, and Asian voters from the Democratic column this year registered as a shock, even a betrayal. This week, the MSNBC anchor Joe Scarborough and his guest, the Reverend Al Sharpton, both upset with Trump’s triumph, suggested that Harris’s race and gender worked against her. “A lot of Hispanic voters have problems with Black candidates,” Scarborough opined; Black men, Sharpton said, are among “the most sexist” people.

To accept such stereotypes requires ignoring piles of contrary evidence. In 2008 and again in 2012, to cite an example, Hispanic voters up and down the Rio Grande Valley in Texas delivered huge electoral margins to President Barack Obama, who is Black. Many millions of Black men, nearly 80 percent of those who cast a ballot, exit polls suggest, voted for Harris this past Tuesday.

Black and Latino voters are not the only demographics drawing blame for Trump’s victory. Some commentators have pointed an accusatory finger at white women, suggesting they bear a group guilt for selling out women’s rights. This fails as a matter of fact. Nearly half of white women voted for Harris. But more to the point, telling people how to think and not to think is toxic in politics. Yet many liberal commentators seem unable to help themselves.

A week before the election, Marcel Roman, a Harvard government professor, explained on X that he and a Georgetown colleague had discovered that Latino voters deeply dislike being labeled Latinx, a gender-neutral term now widespread in academia. This term also came into use by Democratic politicians eager to establish their bona fides with progressive activists. Alas, voters liked it not so much.

[Josh Barro: Democrats deserved to lose]

This problem seems easily remedied: Refer to voters by the term they prefer—Latino, say, or Hispanic. Roman drew a different conclusion, calling for “political education meant to root out queerphobia in Latino communities.”

Professors might heed the words of Representative Ruben Gallego, a Latino Democrat who is currently wrapped in a tight race for a Senate seat in Arizona. Four years ago, I spoke with him about identity politics in his party. A progressive, Gallego is a favorite of Latino activists, who flock from California to work on his campaigns. He told me that he appreciated their help but warned them that if they used the word Latinx when talking to his Latino constituents, he would load them onto the next bus back to Los Angeles.

“It’s just important that white liberals don’t impose their thoughts and policies on us,” he told me.

And nonwhite liberals too, he might have added.

Having lost twice to Trump in three election cycles, and this time watching Republicans reclaim control of the Senate, Democrats might do well to listen carefully and respectfully to the tens of millions of Americans whom they claim to want to represent. This need not entail a turn away from populist economics so much as remaining clear-eyed about self-righteous rhetoric and millennialist demands.

The party might pay some heed to Torres, the Bronx representative. A veteran of political wars, he is a progressive Democrat on economic issues and has taken much grief of late from left activists for his vigorous support of Israel. He noted in our conversation that he is strongly in favor of immigration, and his majority-Latino district has many hardworking undocumented residents who need his aid.

But he recognizes that the national electorate, not least many Latino and Black voters, now seeks to at least partially close the door and tighten restrictions. He accepts that reality. “You have to recognize that in a democracy, public opinion matters,” he said. “We cannot just assume that we can reshape the world in a utopian way.”

In an election year that fell decisively, disastrously short of utopian for Democrats, such advice registers as entirely practical.

Why Did Latinos Vote for Trump? by Xochitl Gonzalez

Why Did Latinos Vote for Trump? by Xochitl Gonzalez 

The Atlantic - Politics by Xochitl Gonzalez / Nov 9, 2024 at 10:27 PM//keep unread//hide

Donald Trump called Latino migrants rapists, murderers, and drug dealers. After one of his final rallies, at which a comedian described Puerto Rico as “a floating island of garbage,” many people, myself included, thought Latinos would decisively turn against him. We were wrong. Exit polls show that 46 percent of Latinos voted for him, and among Latino men, he won 55 percent of the votes—a huge increase from 36 percent in 2020.

Many Americans are baffled. How could Latinos—many of whose family members could be targeted by the mass deportations that the Trump team is promising—make this choice? But seeing the results—and hearing from Latino Trump voters—it made perfect sense to me. This was, simply, a vote for capitalism.

American values are especially powerful in groups with large immigrant populations; those values are what draw people here. Though many of America’s earliest immigrants came here seeking relief from famine and poverty, our freedoms—to worship freely, to speak freely—are what we became famous for. The promise was mythologized on the Statue of Liberty: our welcome to the tired, poor, huddled masses, who yearned not to grow filthy rich, but to be free. In the 20th century, immigrants fled religious persecution and political oppression to find in America freedoms that they, and their descendants, cherished and took seriously. I was raised by my grandfather, a Puerto Rican veteran of World War II. We didn’t have a lot of money, but I was taught that our political freedoms and our moral obligation to democracy mattered more.

At the same time, from the very beginning, the land of the free has also been about the freedom to make and spend money. America put God on our money, but for many Americans, money is God. This nation put profit over morality through centuries of slavery. Individual expediency in the name of capitalism is as American as the right to bear arms. Around the world, no idea has been marketed more effectively than the American dream. America: where even corporations can be people! And when we talk about someone living “the American dream,” we aren’t referring to their trips to the voting booth or the way they utilize their freedom of assembly. We are praising people who have achieved financial success and accumulated material things.

[Read: Why Democrats are losing Hispanic voters]

We deify and elevate these people in the media, in social settings, and online, and we rarely question the ethical price that may have been paid to get them there. Just look at Trump, the “self-made man” whose father’s real-estate fortune launched his career. Until Trump became a political villain, he was an American success story. He was regularly on Oprah and sung about in hip-hop songs, and he had that cameo in Home Alone 2. And the truth is, for many Americans—Latinos included—he still is that man. He is living the dream; he has buildings with his name on them.

Latinos broke for Trump for many complicated reasons, including sexism, religious conservatism, racism (or a desire to assimilate into whiteness). But the simplest answer is often the best: To many, Trump represents prosperity. And the ability to financially prosper is what America is all about. People believe this, because America told them so.

In polls, Latinos consistently put economic issues at the top of their list of concerns. After the election, the media was full of voters reaffirming this. As one Pennsylvania voter of Puerto Rican descent told NBC News, he wasn’t bothered by Trump’s comments about the island: “For me, it’s work. It’s the economy. It’s groceries.”

Why, one might ask, was this narrative so much more persuasive to Latinos than to Black Americans? Perhaps because the American dream wasn’t created with Black people in mind. The civil-rights movement was painstakingly built by exploiting America’s political rights to assembly and free speech. When Black Americans in the North couldn’t buy homes because of redlining, many could still—despite obstacles—vote. Perhaps Black voters understood better than many Latino voters an essential truth: Access to the American dream is elusive, but America’s freedoms are indispensable.

One of the great takeaways of this election is that the narrative of America as the land of the free has ceased to be many voters’ top priority. This election was a battle for the soul of the nation—but the fight wasn’t between American ideals and un-American ones. It was between our best and worst selves.

Blue Cities and States Need to Get Their Act Together. by Ned Resnikoff

Blue Cities and States Need to Get Their Act Together

Urban dysfunction is eroding our last bulwark against Trumpism

Author

Ned Resnikoff

November 08, 2024 • Estimated Reading Time: 5 minutes

Three and a half years ago, I delivered a warning to California officials in The New York Times:

California’s continual failure to make inroads against widespread homelessness risks fomenting anger, cynicism and disaffection with the state’s political system. A state that appears powerless to address fundamental problems does not make a very persuasive case for its own survival. As such, state and local policymakers need to take homelessness seriously as not only a humanitarian disaster, but a threat to liberal democracy.

Since then, homelessness in California has only gotten worse. So have housing costs in much of the state. And while violent crime levels have dropped off again after a brief spike during the pandemic, that hasn’t done much to change public perceptions of crime. Those perceptions are driven more by the abundant signs of low-level urban disorder: the encampments, the open air fentanyl use in places like San Francisco, the maximum security treatment that CVS still gives to deodorant bars and tubes of toothpaste.

And that anger, cynicism, and disaffection? Just take a look at the election results. California voters elected, by a 40 point margin, to undo elements of the state’s 2014 sentencing reforms. They rejected proposals to raise the minimum wage and make it easier to raise public funds for affordable housing construction. Most disconcerting of all, 55 percent of California voters rejected a proposal to ban forced prison labor.

As I write this, Kamala Harris is running about 7 points behind Joe Biden’s 2020 lead in California — about 57 percent to roughly 64 percent. You can see a similar rightward shift in other blue parts of the country, and especially in New York City, where Harris ran a full 16 points behind Biden’s 2020 margin of victory. That should alarm anti-Trump activists everywhere.

I do not think we can blame urban dysfunction in cities like New York, Los Angeles, and San Francisco for Trump’s return to the White House. But it probably contributed at least a bit to the narrowing Democratic margin in those places. And it certainly contributed more than a bit to the overall rightward trajectory in American urban and blue state governance.

That urban dysfunction is the result of larger tectonic shifts in American political economy, some of which state and local policymakers have no ability to control: COVID, post-COVID societal trauma, and post-COVID inflation are all global phenomena. But some of the other political headwinds that Democrats now face in cities are a direct result of their own mismanagement.

We have a housing and homelessness crisis because blue cities and states have, for decades, accepted a status quo under which it is effectively illegal to meet rising demand for more homes. We have inadequate and decaying public transit because of underinvestment, alongside rules and bureaucratic procedures that stymie any attempt to build ambitious public infrastructure projects. And power in many blue cities is badly fragmented—within the public sector, yes, but also between the public sector and a sprawling network of largely unaccountable nonprofits and advocacy organizations.

A number of blue state leaders have stepped forward to promise they will resist the worst depredations of the second Trump administration. That is good and necessary. But they will need popular support and popular mobilization in order to effectively push back against Trumpism. And they will not be able to maintain that support unless they get their own houses in order.

A strategy of resistance to Trumpism needs to be paired with efforts to renew blue state and blue city governance. Democratic mayors and governors need to prove that anti-authoritarian liberalism is capable of solving problems. They need to make real progress on ground-level, meat and potatoes issues like rent inflation, unsheltered homelessness, and decaying public infrastructure. The governments they run are often sclerotic, slow-moving, and captured by outside interests; they need to become muscular, efficient, and directly responsive to the needs and preferences of residents.

In addition to creating political room to maneuver against the Trump administration, more competent administration in blue states and cities will enable them to serve as sanctuaries for people fleeing oppression elsewhere. Many immigrant communities in red states are now in great danger; queer people in those regions and women seeking reproductive health care may also need somewhere to go. Abundant housing and improved public services would enable the anti-MAGA parts of the country to open their arms to new residents.

Many state and local Democratic officials will be tempted to navigate this perilous time using the tools they know best: delaying actions in the courts and symbolic displays of solidarity. I don’t mean to denigrate either approach, since we’ll need them both. But these are short-term, defensive tactics. In the long term, there’s no hope for a durable, anti-Trump Democratic coalition if Democrats can’t prove their ability to govern the places where they already hold power.

The Case for Treating Trump Like a Normal President. by Conor Friedersdor

The Case for Treating Trump Like a Normal President

The Atlantic - Politics / by Conor Friedersdorf / Nov 8, 2024 at 10:19 PM

After Donald Trump won the 2016 presidential election, Barack Obama dutifully carried out the peaceful transfer of power. But a large faction of Americans declined to treat Trump as a president with democratic legitimacy. In their telling, he lost the popular vote, urged foreign actors to interfere in the election, broke laws, and transgressed against the unwritten rules of liberal societies. So they fancied themselves members of the “resistance,” or waged lawfare, or urged the invocation of the Twenty-Fifth Amendment. Immediately after Trump’s inauguration, liberal groups started to push for his impeachment and removal from office.

Now Trump is returning to the White House. But history isn’t quite repeating itself. This time, Trump’s case for democratic legitimacy is far stronger. He won the Electoral College decisively, and he appears likely to win the popular vote. No one believes that a foreign nation was responsible for his victory. Although he still has legal problems stemming from his past actions, no one alleges illegality in this campaign. For all of those reasons and more, a 2016-style resistance to Trump is now untenable. He will begin his term as a normal president.

A small faction of Trump detractors may continue to say that he is illegitimate, because they believe that he should have been convicted during his impeachment, or because they see his attempts to overturn his election loss in 2020 as disqualifying, or because they believe he is a fascist.

[Read: What can women do now?]

But that approach will be less popular than ever, even among Trump opponents, because an opposition that purports to defend democracy cannot deny legitimacy to such a clear democratic winner; because the original resistance oversold enough of its allegations to diminish its ability to make new ones without proof; because some in the resistance are exhausted from years of obsessive, at times hysterical, focus on Trump; and because unaligned Americans who don’t even like Trump are tired of being browbeaten for not hating him enough.

Maybe voters made a terrible mistake in 2024. But that’s a risk of democracy, so we must live with it. I have strong doubts about Trump’s character, his respect for the Constitution, and his judgment. I worry that his administration will engage in reckless spending and cruelty toward immigrants. Having opposed government overreach and civil-liberties abuses during every presidency I’ve covered, I anticipate having a lot of libertarian objections to Trump in coming years.

Yet a part of me is glad that, if Trump had to win, the results are clear enough to make Resistance 2.0 untenable, because that approach failed to stop Trump the first time around. It deranged many Americans who credulously believed all of the resistance’s claims, and it foreclosed a posture toward Trump that strikes me as more likely to yield good civic results: normal political opposition.

The American system makes effecting radical or reckless change hard.

As a Never Trump voter who thought January 6 was disqualifying but who respects the results of this election, I urge this from fellow Trump skeptics: Stop indulging the fantasy that outrage, social stigma, language policing, a special counsel, the Twenty-Fifth Amendment, or impeachment will disappear him. And stop talking as if normal political opposition is capitulation.  

Everyone should normalize Trump. If he does something good, praise him. Trump is remarkably susceptible to flattery. Don’t hesitate to criticize him when he does something bad, but avoid overstatements. They are self-discrediting. And know that new House elections are just two years away. Focus on offering a better alternative to voters, not ousting the person they chose.

Meanwhile, oppose Trump’s bad ideas by drawing on the normal tools Americans use to constrain all presidents. Our constitutional and civic checks on executive power are formidable, frustrating every administration. So be the John Boehner to his Obama. Even if ill intent exists in Trump’s inscrutable mind, his coalition does not wish to end democracy. Some will turn on the president when he merely has trouble fulfilling basic promises.

And in America, power remains dispersed––the left never succeeded in shortsighted efforts to end the filibuster, or to destroy federalism and states’ rights, or to strip the private sector of independence from the state, or to allow the executive branch to define and police alleged misinformation.

Until 2028, normal checks can constrain Trump. Then he will term out. Yes, he will almost certainly do some troubling things in the meantime: impose tariffs that will harm Americans with rising prices or carry out excessive deportations that needlessly harm families and communities. But he has a mandate for some lawful parts of his agenda, including parts that I personally hate.

[Thomas Chatterton Williams: What the left keeps getting wrong]

Amid the give-and-take of democratic politics, I hope that Trump will normalize himself too. Through what he says and does, he could reassure voters who regard him as a fascist with dictatorial aspirations, rather than deploying rhetoric—let alone taking actions—that elicit reasonable concern or fear. He may even try reassurance, if only because it would be in his own self-interest.

A Trump who reassures the nation that he will adhere to the law, the Constitution, and basic human decency—and then does so—will inspire a lot less opposition than a Trump who indulges the excesses of his first term and reminds Americans why they rejected his bid in 2020.

“We’re going to help our country heal,” Trump promised on Election Night. He has all the power he needs to make good on that promise, which will require restraining his worst impulses. If he succeeds, he will earn a historical legacy far better than the one he has today. I doubt that he has it in him. Typically, his word is not his bond. But I hope that he proves me wrong.

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The Trump Trades Worked. By Matt Levine

The Trump Trades Worked. By Matt Levine

Trump Media, crypto, the CME and farmer’s market pricing bylaw loopholes.

November 6, 2024 at 6:02 PM UTC

By Matt Levine

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

Hmm

I wrote what I think eight years ago, and I think it holds up pretty well. We live in a society of rules, of fundamental principles of freedom and due process and limited government, but that is all contingent:

Those principles can’t automatically enact themselves; they only work if the human actors in the system choose to follow them and to demand that others follow them. They persist because the people constrained by them believe themselves to be constrained by them. The Constitution, separation of powers, religious liberty, freedom of the press, an independent judiciary, the rule of law, equality of all citizens: There is a complacent sense in America that these things are independent self-operative checks on power. But they aren't. They are checks on power only as far as they command the collective loyalty of those in power; they require a governing class that cares about law and government and American tradition, rather than personal power and revenge. Their magic is fragile, and can disappear if people who don't believe in it gain power.

Maybe it’s fine though.

The Elon Musk connection this time is also interesting. I think of Musk as the great legal realist of our time, a guy who is unusually strong-willed and clever about seeing rules he doesn’t like and saying “well what can they really do about it?” I was driven somewhat insane by his efforts to get out of his merger agreement with Twitter because he didn’t feel like doing it anymore. His reported drug use would seem to violate federal policies about SpaceX’s government contracts, but what are they gonna do, cancel the contracts? Tesla Inc. gave him a pay package that, a judge ruled, violated Delaware law, so he moved Tesla to Texas to get a more congenial law. Most people do not get to choose which laws apply to them, but Musk is evidence that, with enough money and willpower, maybe you can. And now he has a more congenial president.

DJT

What is the Trump Media and Technology Group trade? Trump Media, which is usually called by its ticker, DJT, is the social media and streaming video company with Donald Trump’s name on it; he owns about 52.9% of the stock. Its main product is Truth Social, Trump’s social media site. With incredible timing, DJT announced third-quarter earnings yesterday; it lost $19.2 million on $1 million of revenue. That revenue is down 6% year-over-year and also, I mean, the social media site owned and used by the voluble winning candidate in a US presidential election managed to make $1 million of advertising revenue in the summer leading up to that election? Recently Elon Musk has been paying $1 million per day to individual pseudorandom voters to advertise for Trump, but somehow Truth Social only sold $1 million of ads between July 1 and Sept. 30.

Anyway DJT’s market capitalization was about $7.4 billion at yesterday’s close, and it’s up this morning. What makes it worth more than $7 billion? I can think at least five possible answers:

1.Pure meme stock. DJT goes up based on Donald Trump’s power and newsworthiness, and those are up, so the stock is up. DJT’s stock was a bet that Trump would be elected president, and he was elected president, so now the bet pays off. And this can continue indefinitely, so that “Donald Trump is the president” will be enough for $7 billion or so of market capitalization for the foreseeable future. This is not a very financially sophisticated theory but, this far into the meme stock era, it strikes me as totally plausible.1

2.Business case. Right now DJT’s business is tiny, but Donald Trump is about to be president and will have ways to steer business to DJT. For one thing, he can keep posting his thoughts on Truth Social, and those thoughts will be newsworthy, so Truth Social will attract a lot of users and advertisers. “In fact, I have just set up a Truth Social account just to make sure we don’t miss anything,” an institutional sales trader told Bloomberg News. If everyone needs to be on Truth Social to do their jobs or keep up with the news, surely it can sell a lot more than $1 million of ads per quarter. I don’t think we’ve ever had a situation where the president of the United States makes official pronouncements on a platform where he also sells ads.2

3.Merger case. If you are a very rich person or government and you want something from Donald Trump, one way to get it might be to give Trump a lot of money. One plausible-seeming way to give him a lot of money would be to acquire DJT in a merger. I linked yesterday to a Charlie Gasparino story about speculation that Elon Musk — who is rich, backs Trump, and owns a social media company — could buy Trump Media. One flaw in this case — from the perspective of public shareholders of DJT — is what I think of as the Paramount problem: Donald Trump owns 52.9% of DJT, but he owns 100% of the shares with the “giving Donald Trump money” property. You could just buy his shares, rather than all the shares.

4.A vaguer “give Trump money” case. Actually acquiring DJT in a merger, or buying Trump’s stake from him, might raise eyebrows and would also cost billions of dollars. But people with lots of money (but not many billions of dollars) who want something from Trump could go in for a lighter version of this trade: Buy a 1% stake in DJT, disclose it, say “see I’m a co-investor in DJT,” and indirectly push up the price and make Trump richer. This sort of loops around to the meme-stock case: The idea is something close to “people who like Trump and want to be on his good side will buy the stock, so the stock will go up.”

5.Reverse merger case. A reader suggested a better idea than Musk buying DJT: Why not use DJT’s public listing to take X public again? Musk bought Twitter Inc. in 2022, took it private and renamed it X; it then seems to have lost value as its advertising business softened. But a public X would probably be worth more, because of its meme-stock, Musk-fan potential. I wrote last year: “If Twitter is a private company and you own almost all of the equity, you are mainly exposed to its cash flows, not the meme potential of its stock. If you take it public and sell a bunch of stock to your ardent fans, the business results matter less, and your ability to attract attention matters more.” That was a case for an initial public offering, but another thing Musk could do would be to merge X with DJT (with him, Trump, and their co-investors splitting the ownership in some negotiated way). The combined public X/DJT would trade on Musk’s and Trump’s meme-stock powers and would be pretty much unstoppable.

Lots of options. By the way, Ben Thompson writes today about Musk and the election:

What is fascinating is how this fundamentally transforms any attempt to evaluate the Twitter acquisition. From a business perspective it’s a massive failure, and might always be: Musk paid too much for Twitter as it was, and in the intervening years the flight of advertisers from the platform has made it worth even less. From a Musk Inc. perspective, however, X played a pivotal role in ensuring that the incoming administration will do whatever Musk needs at the exact moment that SpaceX is gaining the capabilities to actually make a trip to Mars, if only the FAA in particular will give him the freedom to do so. That alone is almost certainly worth $44 billion to Musk!

So, yes, arguably another case of one part of the Musk Mars Conglomerate helping out the other parts. I think it’s also a good case for overpaying for DJT?

Elsewhere in memes, here’s a roundup of Trump trades that includes stocks (up), Bitcoin (up), the Mexican peso (down), the yuan (down), Treasury bonds (down3), but also this:

Trading for a Chinese software company, whose name, “Chuan Da Zhi Sheng,” can be literally translated as “Trump Big Wisdom Win,” was halted after its Shenzhen-listed shares rose 10%. Meanwhile, a China-based thermo-flask manufacturer with a name that phonetically sounds similar in Mandarin to “Harris” declined more than 7% before recovering some losses.

Makes as much sense as anything else.

Crypto

I guess a counterargument to what I said at the top is, if you like the rule of law, and you work in crypto, you have some reasonable complaints about the last four years. To some extent I sympathize with the US Securities and Exchange Commission, which under Chair Gary Gensler has brought a lot of cases against crypto companies: Many crypto tokens are pretty clearly “securities” under established US law, so the SEC can insist that they follow existing rules about registration and disclosure of securities sales and about registration of securities brokers and exchanges. And there’s a lot of bad stuff in crypto — crypto token issuers who are fleecing investors and not building anything, and also occasionally unregulated crypto exchanges who are misusing their customers’ money — so it makes sense for the SEC to want to enforce the investor protection rules of the securities laws.

Still it sure looks to me, and everyone, like the SEC’s goal is not to protect crypto investors but to prevent crypto investment. The big crypto exchange that was in the news most recently for misusing customer money was of course FTX, which the SEC did sue, after it went bankrupt. Meanwhile the SEC is pursuing Coinbase Global Inc. for operating an illegal securities exchange, but Coinbase (1) is a US public company with good disclosure and audited financial statements, (2) seems to basically be trying to comply with the law as best it can, conditional on being a crypto exchange, and (3) doesn’t seem to be doing risky stuff with the customer money.

Coinbase, that is, is pretty much the exact sort of crypto exchange that US regulators should want — a US-based, publicly listed, audited, compliance-focused, not-particularly-leveraged one — if US regulators wanted any crypto exchanges. Oh you could quibble; you could imagine some list of improvements that Coinbase could make to protect customers more. You could imagine an SEC that made a list like that, took it to Coinbase, and tried to negotiate for an approved, regulator-blessed exchange. The current SEC, under Gensler, just wants to shut it down.

Or recently the SEC sued a couple of brokerage firms, including eToro USA LLC and Cumberland DRW LLC, for brokering crypto trades for customers without a securities license. The SEC’s theory is that these brokers let their customers trade crypto tokens that count as securities, so they should have registered with the SEC as securities brokers, and they didn’t, so they violated the law. But this theory is plainly wrong: eToro and DRW are registered with the SEC as securities brokers, or rather, they have entities that are SEC-registered broker-dealers. eToro is a retail stockbroker! But they do their crypto trades out of different, unregistered entities, because the SEC won’t let them do crypto trades in their registered broker-dealers. From Cumberland DRW’s statement last month:

The SEC asserts these transactions required us to register as a broker-dealer. While we strongly disagree, we took that step and acquired a registered broker-dealer in 2019. Only then — despite Chairman Gensler’s call to “just come in and register” — were we told we could only use our broker-dealer to trade BTC or ETH (both commodities and not under the jurisdiction of the SEC).

More generally, a lot of people in crypto would like clear US rules about what sorts of registration, disclosure and investor protections are required in crypto. The current SEC position seems to be roughly “the rules are clear perfectly, you can’t trade crypto.” This strikes me as (1) a plausible interpretation of the law and (2) not a crazy policy position, but I can see why crypto traders find it frustrating.

And now obviously Donald Trump has promised to be more crypto-friendly, and his SEC can’t possibly be less crypto-friendly than the current one, so the crypto industry is thrilled. The Information reports:

Investment bankers from top Wall Street firms including JPMorgan, Goldman Sachs and Morgan Stanley have been meeting with crypto executives, according to industry participants, hoping to get a foot in the door for lucrative initial public offerings that crypto companies might pursue after the election.

The new enthusiasm reflects optimism that improving market and regulatory conditions after a Donald Trump victory in the U.S. presidential election could clear a way for companies like Kraken, Fireblocks and Chainalysis to go public. Bankers’ interest in meetings is also a shift from much of the past two years, when many investment banks saw crypto companies as too risky to do business with, advisers say.

I have two questions here. One is: What will crypto regulation look like under Donald Trump? There are two main possibilities:

1.Someone — Congress, the SEC, the Commodity Futures Trading Commission, some new crypto regulator, Donald Trump by executive order, etc. — writes new disclosure and investor protection rules tailored to crypto, with public notice and comment and some input from the crypto industry. And the result is that there is a path to registration for crypto token issuers, exchanges and brokers, and that path does protect investors and give them useful disclosure, and being a US-registered project/exchange/broker is helpful for raising capital. Basically the US government does to crypto what it did to the stock market in the 1930s: Impose requirements that are somewhat costly and restrictive, but that increase investor confidence in the market and so allow it to grow and become more institutional.

2.Nobody will do that, but the SEC will stop trying to enforce securities laws against crypto, and everyone will be able to do whatever they want? That is sort of the simplest outcome: It is hard for the SEC or CFTC or Congress to write new rules for crypto, but pretty easy for the SEC to just stop bringing cases. And while a lot of people in crypto probably do want clear rules for market-confidence and/or incumbent-protection reasons, others don’t. Because, uh, part of the case for crypto sometimes is “this is a way to raise money from investors for dubious projects without any regulation”? Here it is worth noting that Donald Trump himself has some involvement with a crypto project called World Liberty Financial that is, uh, I mean, it’s not Coinbase, you know?

The other question is: What will crypto do with its new freedom? It is possible to overstate how bad Gensler’s SEC has been for crypto. Right now I think it’s fair to say:

1.Bitcoin is fine. Bitcoin is not regulated by the SEC, you can trade it in lots of retail brokerage accounts, the SEC doesn’t object to Coinbase trading it, there are Bitcoin exchange-traded funds (over the SEC’s objection) and derivatives, there are rules for institutional custody, it’s all pretty integrated into the mainstream financial system.

2.Stablecoins are where a lot of the action is in crypto, in terms of using crypto as payments infrastructure, and the SEC has not really done much to stop stablecoins, in part because it’s harder to argue that they are securities. A different SEC might make it easier to pay interest on stablecoins, and a friendlier crypto regulatory environment might be better for stablecoin development, but stablecoins do kind of work under the current rules.

3.Meme coins are also fine under the current rules, for the most part: If you’re not making any promises about building the decentralized future of whatever, but just issuing a token like “this token is named after a dog,” the SEC can’t really argue that it’s a security, so they can’t stop you.

Instead, what the Gensler SEC particularly prevents is tokens of the form “we are building a new decentralized infrastructure for ______, and we are raising money for it by selling tokens that allow users to participate in _____,” where you fill in the blank with like “file storage” or “WiFi” or “derivatives trading” or “political prediction markets” or whatever. And here the tokens are arguably investment securities, and the SEC cracks down on them. But these are arguably the good projects, where the innovation is happening: Building the future of _____ is arguably more useful than trading coins named after dogs.

But you hear less about those projects than you used to: The idea that crypto would build the decentralized future of work or the internet or whatever was more popular a few years ago; now when people talk about real-world use cases for crypto they tend to default to “stablecoins for payments.” And when they talk about world-changing technological paradigm shifts they tend to talk about artificial intelligence, not crypto.

Possibly that’s because all the crypto stuff was vaporware and people have moved on to the next, more actually promising thing! Or possibly it’s because the SEC stifled crypto innovation and now, freed from those bonds, crypto actually will build the future of the web. I suppose now we’ll find out.

CME

Speaking of crypto exchanges. One thing that the SEC does not like about crypto exchanges is that they tend to combine the roles of (1) a customer-facing broker, (2) an exchange that matches trades and (3) a clearinghouse that moves tokens to settle trades. In traditional finance, and thus in the structure of the securities laws, these functions are done by different entities; crypto exchanges tend to combine all of them. There is a lot to be said for the crypto model, in terms of giving customers easy and open access to exchanges, but to be fair FTX would probably have been in better shape if there was a separate clearinghouse for its trades.

Anyway traditional markets are moving a bit in the crypto direction. The Financial Times reports:

Customers of CME Group have strongly criticised the US futures exchange after it was given the green light to become one of their main competitors.

Banks and small brokers have sharply criticised the Chicago group after it won approval last week to also act as a futures broker — blurring the traditional dividing line between operating an exchange and being a member of it. ...

CME is the world’s largest derivatives exchange, handling an average of 28.3mn contracts a day during the third quarter on futures tied to interest rates, Treasuries, energy and equities.

Its new licence will allow it to offer trading directly to investors and ask for the margin that is the insurance for futures trading. It also means the exchange can bypass banks and brokers, which normally do the job as part of their membership of the exchange.

“Only a monopolist would brazenly attempt to disintermediate its clients,” said Lou Scotto, chief executive of FMX, part of billionaire Howard Lutnick’s interdealer broker BGC Group, which recently launched interest rate futures in direct — and fierce — competition with CME.

It doesn’t seem like the CME is actually moving to the crypto model. (“We remain committed to the FCM model and believe in the time-tested risk management benefits it continues to provide,” said CME Chief Executive Officer Terry Duffy, referring to the futures commission merchants who normally provide customers with access to the exchange.) But it is keeping its options open: Perhaps it would be more convenient for the CME to just have a website where retail customers could trade futures, and to collect margin from them directly rather than making them go through a broker. Perhaps crypto really has pointed the way to the future of, uh, centralized finance.

Farmer’s markets

We talked yesterday about possible algorithmic collusion among farmers at farmer’s markets, in the form of a Cornell project that uses point-of-sale data to aggregate prices and tell farmers how much they should charge. I was being somewhat tongue-in-cheek describing this as “algorithmic collusion”: Some variations on this — services that collect pricing data from many sellers and share it with those sellers so they can set prices — do raise antitrust concerns, and we have discussed a Justice Department lawsuit against RealPage, which does it for rental apartments, but it is hard to see anyone getting mad at the farmers.

Or so I thought, but then I got an amazing email from a reader:

I wanted to bring your attention to the Ottawa Farmers’ Market, which was investigated for anticompetitive practices by Canadian authorities a few years ago. At that time I was a farmer selling strawberries in this market. Each day before the market opened all vendors would gather for a mandatory “price meeting” and collude on prices for each type of produce that was available that week. Adherence to these prices was even codified in the market bylaws! I found a loophole by sourcing unique container sizes so I could set my own prices and undercut the competition. Everyone else had 1 qt and 4L baskets of strawberries but I found non-standard 2.5L baskets and sold them for half the price of the 4L baskets.

Now I’m a data scientist at [a large tech company] where I design ad auctions to align advertiser incentives with business goals of the platform.

Perfect story, perfect kicker. I hope a tech company recruiter was shopping at the farmer’s market and saw this reader’s non-standard strawberry baskets and thought “now this is the person we need designing our ad auctions.”

Things happen

Betting Markets, Vindicated by Trump Win, Set to ‘Run the World.’ AI Startup Perplexity to Triple Valuation to $9 Billion in New Funding Round. China Hack Enabled Vast Spying on U.S. Officials, Likely Ensnaring Thousands of Contacts. Super Micro says review found ‘no evidence’ of fraud after auditor resigned. ADM Discloses More Accounting Issues, Cuts Profit Outlook. “We are here by an accident of birth, but it provides a nice mix of perspectives.”

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What Swayed Trump Voters Was Bidenomics. by Ronald Brownstein

What Swayed Trump Voters Was Bidenomics. by Ronald Brownstein 

Nov 8, 2024 at 5:33 AM

Donald Trump’s decisive victory may proclaim an unpredictable new era for American government and society, but it also reaffirmed an enduring political truth: It is virtually impossible for the incumbent president’s party to hold the White House when Americans are discontented with that president’s performance.

Americans provided Trump with a sweeping victory after a campaign in which he had darkly promised “retribution” against a long list of enemies and offered an agenda centered on mass deportation of undocumented immigrants. Trump seems within reach of winning the popular vote, becoming the first Republican to do so since 2004. Republicans, exulting in winning at least three Senate seats as well as the White House, instantly called the magnitude of the victory “a mandate”—and Trump seems sure to treat it as a license to pursue his most aggressive ideas.

Vice President Kamala Harris and her team, recognizing the threat of widespread disillusionment with President Joe Biden, tried to transform the Democratic campaign from a retrospective referendum on the performance of the administration in which she served into a prospective choice about the agenda and style of leadership she and Trump would bring to the next four years. Ultimately, she could not overcome the widespread unhappiness over the country’s current conditions. Biden’s approval rating among voters never exceeded 43 percent in any of the major swing states, according to exit polls. At least 55 percent of voters in each of those states said that they disapproved of Biden’s performance, and Trump typically won four-fifths or more of them.

Overall, despite any expectation to the contrary, the gender gap was not especially large. Harris’s inability to amass a greater advantage among women likely reflected the fact that they were at least as dissatisfied with the economy and Biden’s performance as men were, according to exit polls. Just 44 percent of women in exit polls said they approved of Biden’s performance, and nearly seven in 10 described the economy in negative terms—a view even more emphatic than the one men expressed.

Disapproval of Biden’s record and disaffection over the economy proved a headwind that Harris could not overcome. Exit polls showed that Americans remained concerned about the possible excesses of a second Trump presidency. But in their deep frustration over current conditions, they placed less weight on those worries.

As Doug Sosnik, the top White House political adviser to Bill Clinton, wrote in an email yesterday: “The 2024 election marks the biggest shift to the right in our country since Ronald Reagan’s victory in 1980.” The New York Times calculated that nine in 10 U.S. counties moved at least somewhat toward Trump in this cycle. A striking sign of that change was his dramatic improvement in big urban centers with large populations of Black and/or Latino voters, including the counties encompassing Philadelphia, Detroit, and Las Vegas. But Trump also improved (compared with 2020) in communities dominated by working-class white voters, such as Macomb in Michigan, Luzerne in Pennsylvania, and Kenosha and the small cities around Green Bay in Wisconsin.

Harris maintained the Democratic hold on the prosperous, well-educated inner suburbs around major cities. But in most of them, her party’s margins declined relative to its 2020 results. She slipped just slightly in predominantly white-collar areas such as Montgomery and Delaware Counties outside Philadelphia, and Oakland outside Detroit, and failed to improve on Biden’s deficit in Waukesha, around Milwaukee. The result was that in Michigan, Pennsylvania, and Wisconsin, Harris’s margins in these big suburbs were closer to Hillary Clinton’s in 2016 than Biden’s in 2020. That wasn’t enough to withstand what I’ve called the “pincer” move of Trump’s concurrent gains in the smaller, mostly white, blue-collar places and the much more diverse urban cores.

The geographic pattern of actual vote tallies for Trump captured the magnitude of the red shift more vividly than the two major surveys that try to measure voters’ behavior for media organizations: the exit polls conducted by Edison Research and the VoteCast survey done by NORC. Neither found any increase from 2020 in the national level of support for Trump among white voters; nor did the exit polls show more than minimal improvement for him among white voters in the Rust Belt states. The exit polls recorded modest improvements for Trump among Black voters, with his gains coming entirely from men, and a big improvement among Latinos. (VoteCast found solid advances for Trump among both Black and Latino voters.) In each survey, Trump made his most dramatic gains with Latino men but scored notable improvements among Latina women as well. Young voters, in both data sets, moved notably toward Trump as well.

The exit polls showed Harris winning women (of all races) by eight percentage points and losing men by 13 points. The VoteCast study similarly showed Harris winning women by seven points and Trump winning men by 10 percentage points. At that level, Harris’s lead with women was much smaller than Biden’s in 2020, and even smaller than Clinton’s advantage in 2016.

The story on the economy was similar. Two-thirds of voters in the national exit polls described the economy as only fair or poor; roughly that many expressed negative views in each of the three former “Blue Wall” states and Arizona, with discontent rising to about seven in 10 in North Carolina and Nevada, and beyond that in Georgia. Solid majorities of those economically discontented voters backed Trump in each state. So did a big majority of the roughly 45 percent of voters who said they were worse off than four years ago.

Harris did win handsomely among those who said they were better off, but they constituted just one in four voters. She also won the narrow backing of those who said their condition was unchanged. But none of that was enough to overcome Trump’s preponderant advantage among those who thought their condition had deteriorated under Biden.

Working-class voters without a college degree—many of them living paycheck to paycheck—were especially down on the economy. More than three-fourths of white voters without a college degree nationwide described the economy in negative terms—as did seven in 10 Latino voters. (An even more telling eight in 10 Latinos did so in the Sun Belt swing state of Nevada.)

The issues that Harris and the Democrats had hoped would offset economic discontent simply did not have enough bite. Two-thirds of voters in the national exit polls said that abortion should be legal in all or most circumstances, but about three in 10 of those voters supported Trump anyway. More than a quarter of women nationwide who supported legal abortion backed Trump.

The muting of the abortion issue was especially dramatic in the former Blue Wall states that ultimately settled Harris’s fate. In 2022, the first election after the Supreme Court rescinded the constitutional right to abortion, Democratic gubernatorial candidates Gretchen Whitmer in Michigan and Josh Shapiro in Pennsylvania each won about four-fifths of voters who supported legal abortion, while Tony Evers in Wisconsin carried about three-fourths of them. But, in a crucial erosion of that pro-choice support, Harris won only about two-thirds of those voters in Michigan and Wisconsin and about seven in 10 in Pennsylvania. A much smaller share of voters in each state said abortion should be illegal most of the time, but Trump won about nine in 10 of those.

Harris did not entirely fail at raising alarms about Trump. In the national exit polls, 54 percent of voters agreed that Trump was “too extreme.” But about one in nine voters who viewed Trump as too extreme voted for him anyway—a striking measure of their willingness to risk an uncertain future over an unacceptable present. Likewise, in the VoteCast survey, 55 percent of voters said they were very or somewhat concerned that Trump would steer the U.S. in a more authoritarian direction; yet nearly one in six of those voters supported him.

“I think that Trump has been helped by this sense that things are careening out of control at home and abroad, and it makes people more willing to contemplate the smack of authority,” William Galston, a senior fellow at the center-left Brookings Institution, told me.

Jackie Payne, the founder and executive director of Galvanize Action, which studies moderate white women, told me that according to her research, many female voters who believed Trump would improve their economic situation simply brushed aside rhetoric and proposals from him that they found troubling. “They were choosing to believe a vision of him that was aligned with what they wanted to get out of him—a strong economy—and they were absolutely discounting anything that felt extreme as disinformation or hyperbole, even if he said he would do it,” she said.

Voters around the world have reached similar judgments this year in the aftermath of the inflation that followed the coronavirus pandemic: As a Financial Times analyst pointed out this week, incumbent parties have lost ground, or lost power altogether, in all 10 major democracies that held elections in 2024. The priority voters gave to current economic conditions in their decision making followed a long U.S. tradition too. Incumbent presidents with low public-approval ratings almost never win reelection—as Jimmy Carter in 1980, George H. W. Bush in 1992, and Trump himself in 2020 demonstrated. The similar but less discussed scenario is the difficulty facing a party seeking to hold the White House even when its unpopular president isn’t running. That applied when Harry Truman in 1952, Lyndon B. Johnson in 1968, and George W. Bush in 2008 were off the ballot; their party lost the race to replace them in each case. Biden now joins that dour procession.

But the most apt precedent for this election may be 1980. Laboring under widespread discontent, including over a raging bout of inflation, Carter tried to use his campaign to shift attention to the risks he said his right-wing rival, Ronald Reagan, represented, with some success: Doubts about Reagan did keep Carter close in the polls. But in the campaign’s final days, voters decided that continuity with Carter represented a greater risk than change with Reagan—and flocked to the challenger in crushing numbers.

Voters were willing to take an even greater leap this time. Trump made almost no accommodation for voters uneasy about him. Instead, he intensified his false accusations, inflammatory racist rhetoric, and profane personal attacks. Trump has surrounded himself with extreme figures who promise a revolution in government and society.

His senior immigration advisers have promoted plans for a militarized mass-deportation operation, complete with internment camps, and the possible removal of U.S.-citizen children of undocumented adults. His party is likely to control both chambers of Congress—and in any case, the president has broad unilateral authority to set immigration policy, as well as to impose the large tariffs Trump has pledged. The Supreme Court’s conservative majority has already rendered him virtually immune to criminal prosecution for any action he takes as president. Trump is returning to the White House unbound.

Reagan’s victory in 1980 solidified a realignment in American politics that began under his Republican predecessor, Richard Nixon. Reagan cemented working-class white voters into the conservative movement’s electoral coalition—both white southern evangelical Christians and northern industrial workers in places such as Michigan’s Macomb County—who became lastingly known as “Reagan Democrats.” Those voters remain a cornerstone GOP constituency: Even four-plus decades later, they were the two groups that supported Trump in the largest numbers on Tuesday.

Many Republicans believe that Trump now has the chance to secure an equally significant shift in the party allegiance of Black men and Latino voters of both genders, who voted for him in historic numbers this week. That opportunity surely exists. But realizing it in a lasting way will require Trump and the Republican Party to maintain the support of millions of voters of color and justify their faith in him on the economy over any concern about policies such as mass deportation and more aggressive law enforcement.

Now those communities, along with all of the other Americans disappointed in Biden over the past four years, will learn whether Trump can deliver the economic benefits he promised without plunging the country into deeper acrimony.