Ruchir Sharma’s column- Anti-incumbency wave is visible in politics all over the world. Ruchir Sharma’s column: Anti-incumbency wave is visible in politics all over the world

Ruchir Sharma Global Investor and Bestselling Writer

Seeing Donald Trump’s victory in the White House race after securing votes in his favor from every corner of almost 50 states, it seems that the popularity of the right wing has increased among all types of population groups. But America is just another country where protest-voting has taken place – whether for the right or the left.

There is an anti-government wave going on all over the world and there has been a lot of discussion on it, but an important fact is being forgotten. This year, among the 50 most populous democracies, incumbents won 14 percent of elections in developed countries, while they won 73 percent of elections in developing countries.

The same difference is visible in the approval ratings. Ruling leaders are increasingly disliked in the developed world, but remain popular in the developing world. It is a rebellion against the evils of post-capitalist economies, of which America is the biggest example.

This is the first time since the late 1800s that the party in power has lost three consecutive US presidential elections (including Trump’s defeat in 2020). The anti-incumbency sentiment is so strong that it is too early to draw any conclusions about the strength of the mandate given to Trump.

The natural electoral advantages enjoyed by those in power have ended. A century of government expansion has turned capitalism into a state system that benefits everyone, but it has benefited the rich and powerful far more than the average American.

Trump joins the same list of opponents of global populism that dates back to President William McKinley in the 1890s. But since McKinley, Trump is the first person on this list to reach the White House, which shows that frustration with populism is now at the highest level since the 19th century.

Those in power may or may not get victory due to rapid growth, but rising inflation definitely increases the risk of defeat. Still, there are fears that even if inflation had not increased under Biden’s rule and a new candidate had not taken his place, the Democrats would still have lost.

A major reason for the increase in opposition votes is the decreasing confidence in the economic future. Whereas nine in ten Americans born in the 1940s grew up to earn more than their parents, fewer than four in ten today expect to do so.

Homes are now less affordable for young people. Trust in many institutions is at an all-time low. At the same time, trust in the President has fallen to less than 20 percent and in big companies it has fallen below 15 percent. Antipathy toward big government and big corporations, and the nexus between them, has fueled the rise of the ‘third force’ in American politics.

The number of voters calling themselves ‘independent’ was small in the late 1990s, but according to Gallup they now represent a strong 37 percent. This number is continuously increasing more than that of Democrats and Republicans.

Still, there is no doubt that Trump-style populism fuels a nostalgia for the past. The past before the flow of jobs to China due to globalization, the past before the influx of illegal immigrants into America, and the past before the expansion of government under Biden. Now Trump will have to act on the passion he has stoked.

Despite attacks on the ‘deep state’, it seems Trump’s plans threaten to make this happen even more. His fiscal policy, based on pop-up tax cuts, promises to inject more government money into the system and financial markets.

Only big corporations and billionaires will benefit from this. No matter how much you analyze the new ‘Trump Trade’, American asset prices are rising in the same way as they did under Biden’s rule. For the Republican Party to break the anti-incumbency pattern in the next round of elections, Trump needs to be a true change-maker and shift the balance of power away from big corporations and the established rich. The mandate should be interpreted for what it is – a strong protest-vote.

This year, among the 50 most populous democracies, incumbents won 14 percent of elections in developed countries, while they won 73 percent of elections in developing countries. The same difference is visible in the approval ratings. (These are the author’s own views)