Recent Posts

Archive

Tags

Identity Politics and the Inability to Identify

The Democratic party sits in tatters and blames forces beyond their control, however, their strategic failures were of their own making. The strategic choices were more limited for the Trump and the Republican party, nonetheless, they achieved their objective. The essence of the Democratic defeat was the inability to identify the voters, focus their strategy, and respond strategically. In an election campaign hallmarked by identity politics, the first strategic failure of Clinton and the Democratic party was the inability to identify the electorate.

“Such has been the patient sufference of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government.

– Declaration of Independence of the United States of America

The United States voted for a change that appears unprecedented in its history. The rebuke of the current establishment in Government was not one of ideals, but a voice of frustration. This election, if not unprecedented, does echo the events that brought Nixon to power in 1968. As then, a leader sold a dystopian nightmare to an electorate wearied by war, scandal, and geopolitical uncertainty. Even Reagan´s movement in 1980 is viewed as a parallel, however, without the sunny optimism. No matter the vessel, change has arrived.

Listen. Mind your manners. Maxims were told to live by as children. In an election, listening to the people and understanding their important issues is critical to success. Whereas Trump could overcome not minding his manners, Clinton’s campaign was unable to overcome not hearing the electorate. Listening is difficult when you are focused on measuring the drapes in the White House.

There is little doubt that change was in the making. It began with Obama in pushing aside the Clinton establishment in 2008, continued with the turnover of Congress in 2010, rejecting Romney in 2012, and finished with the ousting of Boehner in 2014. Some patterns are unmistakable, and Trump recognized the common theme that people, mainly white rural America were angry, distressed, and needed change. These voices were largely ignored (or feared) by both the Republican and Democratic parties. Like a child who has been ignored too long, it takes extreme actions to be noticed.

Voicing Change. Trump is an oligarch of the economic establishment; however, he is not part of the political establishment. This critical distinction enabled him to upset the Republican nomination because he gave voice to their concerns while being viewed as independent because he was perceived as not needing the money or the fame. Bush and the other pretenders to the Republican wreath never heard their voice and thus were unable to mount a credible rebuttal to Trump’s claim of independence.

The voice for change was also heard in the Democratic primaries with Bernie Sanders. Close to half the party showed their discontent with the status quo and another Clinton presidency. The response of the Democratic Party and the President was to suppress the voice by asking Bernie Sanders to step aside in order to coronate Clinton.

It’s the economy, stupid! While economic measures from GDP growth and unemployment show progress for the nation, it belies the truth. The fallacy of division led the strategists astray. Most growth has occurred on the coasts with the technology and financial sectors leading. Even with strong consumer growth, their products are increasingly sourced from foreign shores or the subject of continual advances in technology. Reliable middle-class jobs have turned into contract jobs driving for Uber and packing boxes for Amazon. As the labor force participation rate indicates: large swaths of the country are in despair and have given up. This tragedy is evident by catastrophic levels of drug abuse and a decline in life expectancy for rural, white America.

Strategy Risk. The failure to hear the plight of the people who were not sharing in the economic growth is hard to understand in retrospect. Trump was able to grasp the message, and it propelled him to the Republican nomination; a person whom the political prognosticators said did not have a path to the Presidency. Any political campaign, or business, would find it difficult to overcome the failure to identify the issues or the strategic priorities correctly.

The success of Trump, however, was not foretold alone by the inability to identify the message. The razor thin margins in three swings States belie the outcome. Like a child rabidly browsing the toy store for a birthday present, the focus of Clinton´s campaign wandered among the many possible gifts among the Republican States, while Trump's focus never wavered from the biggest gift, winning the election. Strategic priorities are usually easy to identify; the larger challenge is focusing the strategy. Despite Trump´s personal failings, his campaign delivered unrelenting focus on the strategy necessary to succeed.

This is the first article in a three-part series on the 2016 US Presidential election.

San Francisco  |   Los Angeles  |  415-373-7152

 

©2003-2020 Capital Risk Management LLC

 

Capital Risk Management is a Registered Investment Advisor in California and may transact business there and in other states where it is notice filed or exempt.

Please note that although Capital Risk Management LLC is a Registered Investment Adviser, readers should be aware that registration with any state securities authority

does not imply a certain level of skill or training. Additional information about Capital Risk is available on the SEC’s website at www.adviserinfo.sec.gov or

through the Broker Check at FINRA.

Strategy | Investing | Asset Allocation | Liability Driven Investing | Pensions | Endowments | Enterprise Risk Management | Financial Planning | Wealth Management

Disclosures     Terms of Use     Privacy Statement      Form ADV