(The Chart That Proves) Why Trump is Winning, How Societies Collapse, and Biden’s Biggest Mistake

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Hi! How’s everyone? I hope you’re doing ridiculously well and you had a fantastic weekend. A Big Thanks to everyone who’s joined us so far, welcome new readers, and many thanks again for all the superb discussions we’ve been having lately.

Today we’re going to talk about…politics, economics, social collapse, how it all happens, by way of…

Why Biden’s Losing, or, the Chart That Shows Us Why Trump’s Winning

It’s not exactly a secret right about now that Biden’s losing, and he’s beginning to lose badly. Trump’s ahead in all the swing states—though the Democrats “don’t believe” the polls, which is hubris writ large—and so if the election were held today, it’d be a Trump…landslide. Go ahead and shudder if you like.

How did this happen? I predicted it, as you probably know by now, and the way I predicted it was…through looking at well-being. And now we’re beginning to have stark, vivid, brutal confirmation that my little prediction was…right on the money. Not just in its outcome, but more crucially, because I want you to understand this stuff at a deep level, in the “why.”

See that chart above? It shows us well-being. In this case, financial well-being, and we’ll come back to that in a moment. What do you see? It craters, and its shape more or less precisely matches Biden’s fortunes. So it’s pretty easy to see that here we have a powerful explanatory variable.

That chart should make the Democrats shudder—and then shudder again, because it should make them think twice. What’s their big mistake been? Leaving Gaza aside, it’s been going out there and proclaiming how “well” the economy’s doing. Only nobody really believes that. Outside say the liberal establishment of White Guys With Ivy League Degrees Named Matt—people think the economy’s doing really, really badly. Just somewhere between 20-30% of Americans rate the economy as good or excellent. Worse, the inverse, 70%, say the economy’s getting worse.

So the Dems are out there telling an entire country of people who think the economy’s in dire shape that…it’s not. Not exactly a recipe for credibility, is it? 

Now let’s come back to the chart. What does it tell us? It tells us that people are hurting. You probably already know that, on an intuitive, maybe even a personal, level. Things are rough out there. What the chart tells us is that financial well-being is in pretty catastrophic shape.

It’s lower than before the pandemic.

Just a minority of people now say they feel financially well.

And that’s a recipe for disaster, when it comes to politics, society, and the future.

Well-Being 101, Or, Why We Need to Know When People’s Lives Begin to Crater

So Biden’s fortunes are in steep, sharp decline for an interlinked set of reasons. Let me summarize them here.

• The economy’s doing dismally, in real terms, in terms of well-being.
• People are hurting at a social scale, well-being plummeting, with just a minority of people say they’re financially well.
• Meanwhile, the Dems have made a catastrophic mistake, sort of denying this obvious reality, and thus blowing their credibility and legitimacy, even within their own constituencies (which of course again happened with Gaza.)

How do you even make that set of mistakes?

What is “financial well-being,” anyways? This is important for everyone to learn, so though you’ve heard me sort of teach you elements of this before, let me try to distill it as clearly as I can this time.

• In orthodox, old-school economics, we look at macro indicators, which usually include GDP and unemployment. If those are going in the right direction, we conclude all is well.
• But the new paradigm of economics and social science looks deeper, at this thing called well-being, which is…how people’s lives are actually doing.
• That’s because macro indicators more and more get it wrong—economies “grow,” but the growth is snatched by those at the top, or mega-corporations, or what have you, or unemployment can be “low,” but only because dead-end jobs abound, or people are working multiple jobs just to get by.

Now. This research was done by Bank of America’s Institute. And they didn’t really delve into well-being too deeply—it appears they just sort of asked people about their levels of financial wellness. And that’s fair enough, because we don’t have to treat this like physics—we’re just looking for signals about how people feel about their lives. 

And so we could easily reality check this research with, for example, some done by the Fed. And that shows us exactly the same thing. People’s financial well-being has plummeted, and it’s lower than just before the pandemic. So the research checks out, and it’s sort of easy to replicate. But I don’t want you to get bogged down in the Matt level dorky details—they’re almost irrelevant. It’s the principle I want you to understand.

What's a really good definition of financial well-being? Retirement, savings, a stable income, etcetera—we could decompose this notion into three sort of components: financial stability, financial security, and the ability tor rise up the socioeconomic ladder. Pretty simple and powerful stuff, no?

That’s a great definition. And really good research would sort of go out there, and measure these various components, We don’t have such research yet—what we have is Bank of America’s, which is pretty good, and the Fed’s, which is sort of OK. But if we did have that research, we already know of know what it’d tell us—people are feeling seriously bad. Remember that statistic, for example, about 70% feeling “financially traumatized,” or money being a significant source of stress for the vast majority? On and on such statistics go, and they kind of tell us what a full-blown measure of financial well-being would probably say, which is that people’s has plummeted in recent years, thanks to inflation, skyrocketing interest rates, debt, and so on.

See how insightful this way of thinking can be? None of this says that financial well-being means something sophomoric, like getting rich, becoming a billionaire, or owning three mansions in every city. Rather, it means understanding that people just want the basics of a good life…

And if we don’t deliver those basics, things fall apart, fast.

How Societies Collapse, or the Power of Understanding Well-Being

In this respect, the parallels between Weimar Germany and modern-day America are sort of eerie. The garden-league pundit, the poor thinker, denies those parallels, because of course, America hasn’t had “hyperinflation.” But what they overlook is that hyperinflation is just a means to an end—the end is a catastrophic fall in well-being. And that’s happening before our eyes in America today, and it has been over the years. In that regard, the deeper one, an implosion in well-being is producing in America today what it has throughout history—destabilization and collapse.

Falling well-being is why Trump is winning.

Now, that’s all kind of boring. So let’s spice it up a little. Financial well-being, yawn, it’s the kind of thing that “wealth advisors” maybe talk about. So let’s expand that to the many other kinds of well-being. 

Just imagine we did the same kind of thing for, say, emotional well-being. How are people feeling these days? Not good, and that’s an understatement. Levels of pessimism have soared off the charts, as have depression, rage, and anxiety.

What about social well-being? There, social bonds have sundered and ruptured, yielding everything from mass distrust in institutions, and among social groups, to a loneliness epidemic.

How about, say, civil well-being? That’s not exactly in good shape, either, with norms shattering, threats and intimidation becoming commonplace, and leaders generally regarded with contempt.

What about what we might call structural well-being, as in social structure? The middle class is dying, the Dream is dead, and the working class is barely getting by, if that.

I could go on—there are many, many dimensions of well-being, and I haven’t talked, say, about ecology and nature. But the point is that if we looked at them, they’d all probably be plummeting these days. I can’t think of a single dimension along which well-being is rising—can you?

And that, to underscore the point, is why Trump is winning.

I often say that well-being is the most powerful explanatory variable in social science. Now perhaps you see why. Why am I able to predict stuff months, years, even decades out, while garden-variety pundits and so forth are perpetually “shocked” and “surprised,” like the Dems not quite believing Trump’s winning again, to the point they “don’t believe” polls anymore? Because this is sort of my thing, I honed and pioneered aspects of understanding well-being.

And as I did so, I realized just how powerful a predictor it really is. Way back when I predicted Trump would rise the first time, it was through looking at well-being, like the health of the middle class, levels of pessimism, rising stats about despair, and so on. And when I made that prediction, I was sort of met with this thing that bewildered me—fury, rage, disbelief, and so on. But I was right, and they were wrong. Yet they haven’t learned much, despite it all, and that’s the worrying part.

If We Don’t Grasp Well-Being as a Paradigm for Transformation, the World Keeps On Burning

It’s not about me. It’s about understanding the world. You see, we need leaders, institutions, and organizations to get well-being. Why? What happens when they don’t? They’re left flat-footed like the Dems, and that’s after they make the mistake of talking down to people and denying their reality. Or they go out there and are just unable to connect in the same way that demagogues, like Trump do, who sort of intuitively emotionally understand people in this weird way.

If we don’t have institutions and leaders that can grasp well-being, what do we have? Not much. Because increasingly, those that don’t aren’t trusted, aren’t believed, and can’t forge coalitions anymore, and win power, which is exactly what’s happening to Biden and the Dems. 

The same’s true in the corporate world, by the way—these days, corporations are doing two things, jacking up prices, and laying people off, all of which decimate well-being, and while they might be smiling about it now, that’s costing them dearly in brand equity, in terms of how much people trust and respect them, which is a more long-term asset, and almost impossible to rebuild. I’ll write about that more this week.

So. Now you know. Now we know. Why Biden’s losing. And Trump’s winning. It’s hardly a coincidence, after all, that falling well-being predicts, time and again, throughout history, the rise of tyranny, the loss of democracy, social instability and collapse. That’s been true from Rome to Weimar Germany to the Soviet Union…and now it’s true in America, too.

And the reason’s pretty easy to grasp, too. Leaders and institutions exist for a reason. To deliver gains in well-being. That is what the entire point of this thing called political economy is. If they can’t do that, pretty quickly, they earn distrust, scorn, and contempt. People call for sudden, dramatic change, even if they fail to grasp the long-term consequences, don’t gather that the price will be even higher than they’re paying now. They turn to demagogues, from Caesar to Hitler, who scapegoat innocents, or dream of building thousand-year empires and Reichs, and provide them a flimsy explanation for their shattered lives, woes, broken dreams.

This is what’s happening in America today. Trump will be a dictator, just as he promised. But Biden isn’t trusted, because he hasn’t not just delivered the goods—he doesn’t even appear to understand the goods he was supposed to deliver. Those goods aren’t metaphorical—they’re the most basic ones of all, good lives.

Whatever our differences, this is what we want from our leaders and institutions. And this desire can invert on itself, in the end, if people are pushed too hard, far, and fast, into penury and despair, as well-being implodes. They can fall for the demagogue’s line that stealing, destroying, annihilating their well-being—those people who aren’t people at all—will increase yours, the true of faith and pure of blood.

Alas, that’s not how it works. You can steal a lot of things—money, possessions, even time, in a way. But you can’t steal well-being. It’s something that’s created, and not just in an individualistic sense, but collectively, which is why when well-being plummets, it rarely just does so for you or me, but for the majority of a society, all together, all at once, save perhaps its elites.

Just the minority of Americans feel financially well now. Ignore the financially. I bet we’d see exactly the same results if we expanded that to any other dimension of well-being. If I had a kazillion-dollar research budget, I’d do it, but we don’t need to, because, well…

Trump wouldn’t be winning otherwise.

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