Thread by @EconTalker

This is going to a long thread on two issues I think are related, the challenge of having a national shared narrative in America and the nature of the political landscape that led to Trump's victory.

I'm 70 years old and lived in America until three years ago. I have a PhD 1/

in economics. I've been interested in American foreign and domestic policy for 55 years. For much of that time, the central domestic policy issue was the size of government. This was the divide between left and right. The left wanted higher taxes, bigger government and more 2/

regulation. The right wanted lower taxes, smaller government, and less regulation. The resulting level of taxes, spending, and regulation that emerged from that political battle was something close to what the median voter wanted. Inevitably, the extremes of both sides did 3/

not like that political result. The more free-market types tried to push the outcome closer to their preferred position. The more interventionist types did the same but in the opposite direction. Overall, the outcome over my lifetime moved to the left. There was some 4/

deregulation in the Carter and Reagan years. Reagan shifted the mix of spending toward guns and away from butter. But on the three big issues that dominated the policy discussions of my lifetime, the left made progress and the right retreated.

During the first part of this 5/

era, the central foreign policy issues were also over intervention vs. leaving things alone but the sides were reversed. In foreign policy the right wanted more intervention and a bigger defense budget. The left wanted the US to do less meddling in foreign affairs and to have 6/

a smaller defense budget. Just as in the case of domestic policy, the outcomes in this area that emerged were generally close to the middle of the two extremes. Hawks wanted more. Doves wanted less. But like domestic policy, neither extreme got its way and change was slow. You 7/

can debate over whether the long-term trend was toward the right or the left--certainly American foreign policy remained anti-communist more or less from 1945-1989. But generally over this time period, as it was with domestic policy, while one side may have gotten the upper 8/

hand from time to time depending on which party was in the White House or controlled the House or Senate, change was slow and mainly incremental toward the right or left but never far from the middle. And the system of checks and balances inherent in the Republic made it hard 9/

for either side to move dramatically toward its preferred outcome. There was a stability that made radical change unlikely. This led people like me through most of the last part of the 20th century and the first part of the 21st to argue that who was in office wasn't so 10/

important. Political forces pushed both Rs and Ds toward the middle. So while Reagan (or either Bush) might sound like a free-marketer, in practice they were not pure free-traders for example and certainly were not particularly interested in using their political capital to 11/

make government smaller or do something dramatic like get rid of the Department of Education even though they might rail against its influence on the campaign trail. So for most of my lifetime, the two political parties waged a much more dramatic rhetorical war than a 12/

practical one. The way I have summarized it is that both parties liked to give money to their friends. They just have different friends. Neither really wanted small government. And despite the egalitarian rhetoric of the Ds, they were very happy to reward their 13/

friends in the financial sector just as the R's did. During this time, changes in actual political outcomes were small though over time, small changes do add up. That's why I say that the left won the domestic policy fight over most of my lifetime. But there was no radical 14/

transformation. And the major disagreements between the left and right and the Rs and Ds were basically on the same axis with one axis for domestic policy and one for foreign. More or less government intervention domestically. More or less government intervention abroad. 15/

Something changed in the last 10 years or so. We just had an election where the three most important issues were inflation, lliegal immigration, and what we can call identity politics--the DEI agenda. Inflation? Both Harris and Trump were against it. The issue hurt Harris 16/

because it happened under her Administration's watch. But the other two issues--immigration and DEI were not like the past issues that dominated my lifetime. The parties weren't disagreeing over whether we should have more or less illegal immigration or more or fewer rights 17/

for trans people. These were 1/0 variables. The right wants zero illegal immigration and Trump campaigned on deporting illegal immigrants. I don't know if he intends to actually do that or whether he can. But this is not a question of more or less. The left generally doesn't 18/

want to do much about illegal immigration. The right wants zero. Similarly, the right doesn't want less DEI in the workplace or on college campuses. They want zero. This means that there's no real opportunity for the normal give and take of politics that would exist, say, 19/

around the size of the government budget or defense spending. You either win or you lose. There's no middle ground that pleases most people even though it might displease the extremists. More importantly perhaps, these two issues get at the heart of how people see their 20/

identity as Americans. Think for a moment how weird and empty is the slogan, Make American Great Again. Who would be against that? How could that possibly galvanize the conservative base? And yet, there are people who are against the idea of making America great again. There 21/

are people who are galvanized by it who think America needs to return in some way to the past. And it unites those on the left who have come to see that past as shameful at best, evil at worst. What I am suggesting is that most of the post-mortems about the failures of the 22/

Harris campaign are missing the real point. Americans have two narratives about how they see themselves and the future. If one side sees the country as needing atonement and one sees it as a force for good, there's no middle ground. There's no compromise. There's no unity. 23/

And it's really hard to respect your political opponent. You and I can debate whether government should be smaller or bigger. Whether the US should send weapons or money to Ukraine and how much. And that question has many gradations that make compromise possible. But where's 24/

the compromise over whether the US's past failures (slavery, for starters or the treatment of Native Americans, take your pick) make America irredeemable? How do you compromise on how many genders there are? Some want 72. Some want two. Somehow, 36 isn't going to work out as 25/

a compromise. So even though every election is billed as the most important election of our lifetime, when the issues are more binary than continuous, it's inevitable that it feels like more is at stake. Trump isn't going to move policy a little to the right. He's going to 26/

change the sign, the direction of the policy 180 degrees. Or at least he's going to try to. He's not going to try to reduce illegal immigration, he's going to try to end it and maybe even reverse what has happened over the last four years. He's not going reduce the influence 27/

of DEI on American college campuses. He's going to try to end it. So a lot *was* at stake in this election because generally Trump does try to do what he campaigned on at least the last time. And while it's tempting to think this is about Trump, that can't be the case 28/

because it's happening all over the world. Look at England. Or France. Or the Netherlands last night. In England, some people are proud of England's past. Some are ashamed. There's no compromise. Politics which has always been ugly and a blood sport, gets uglier.

Maybe 29/

there is a way forward that is less polarized. Could a nation come to a narrative that its past is full of shameful episodes but its ideals are great? And to make a nation great again means not to return to the past but to fulfill its ideals? That may be too nuanced.

There 30/

is much more to say on this and I wish this were more coherent. What is clear to me is that politics took a strange turn in America over the last 10 years and it's not going back. Social media has ratcheted up the outrage but I don't think it's the root of the problem. What 31/

I am trying to get at here is that the central political issue of the West is a more fundamental set of questions that goes way beyond "It's the economy, stupid." It's wrapped in how we see ourselves as citizens of our nation states, particularly in a post-Soviet world after 32/

1989. Our tribalism will find ways to express itself. The cosmopolitan/nationalist fight is going to continue and it's not a question that admits to much compromise like the issues of the past. It's going to be hard to unite a nation like the US even if you want to. Rocky times ahead. 33/33