Democratic leaders appear to be betting Trump and his MAGA Republicans will infight and mess up so badly over the next four years that the 2028 Presidential election will be a cakewalk. Proof for this conjecture? Democrats are sticking with the old guard in the new Congress. Mostly based on seniority and not competence, the same tired old faces are reassuming the reins.
But not so fast.
They made the same bet in 2020 and barely won. This year they and the campaign advisors they keep hiring lost to a party that spent most of the last two years fighting itself, and to a man who screwed up so badly he was indicted four times.
He even was convicted of sexual abuse by a jury. *Edited, see comments for why.
If you can’t beat a convicted sex abuser . . .
Trump is a one-off, they must be telling themselves. The MAGA party will surely fracture apart once Trump is gone. Then the coast will be clear to resume politics as usual.
Don’t bet on it. And that’s what investing is: a bet on the future.
Investors often look to the past to guess what could happen in the future, whether it’s a company, an investment sector, or a country. So for this end of 2024/beginning of 2025 article we are looking back in order to try to figure out what might lie ahead. And if you want to review previous articles in this series for investors trying to survive the second coming of Trump, they are here: parts one, two, three, four and five and six .
We can expect if Democrats lose the 2028 Presidential election to a MAGA Trump wannabe, things will go from bad to worse. Things certainly did the first time the US experienced a radical break in its history similar to the one we are now experiencing.
That break came in 1828 with the election of Andrew Jackson.
The Army of Darkness arises
There are many direct historical parallels between Trump and Andrew Jackson, whose portrait Trump hung in the Oval Office during his first term. Jackson unleashed long term historical forces that still exist. What’s worse, Trump has deliberately reignited these dark forces in American history we thought we had finally begun to extinguish.
What are those forces?
1. Pushing male supremacy, and particularly white male supremacy. The lion’s share of Trump’s appointees in both his terms have been white males. Due to his Supreme Court appointees, women no longer have the right to control their own bodies. Trump also has cultivated religious fundamentalists of all kinds—all of whom preach and practice patriarchalism and female submission. Jackson emphasized universal white male suffrage instead of the various property and educational barriers to voting common at the time. Before Jackson, voters had to prove they were tax payers, and had paid their taxes, prior to voting. Jackson and his followers argued all white males regardless of any other status should have the vote. Besides being a slave owner and vociferously protecting it, Jackson disregarded treaties with Native Americans, and despite Supreme Court rulings, treated them as obstacles and less than human. Jackson’s speeches were full of praise for white Americans and American exceptionalism. Just as Trump treats DEI and trans and gay people as less than human, Jackson demeaned Native Americans, African-Americans, and non-whites in general. He suppressed the abolitionist movement and supported the capture and return of runaway slaves, just as Trump has supported states restricting the travel and privacy rights of runaway women seeking abortions.
2. Attacking the financial establishment. Jackson denounced the Bank of the United States as the very symbol of corruption and elite power. Trump attacks the FED, threatens its independence, and wants to change its reserves policy to accept crypto currencies. Jackson finally managed to kill the Bank of the US, throwing open the door to a flood of unbacked state and private bank currencies that brought about the crash of 1837 and global economic disruption. Trump’s moves are still in progress, but his intent seems clear. The legacy of distrust in central banking institutions fostered by Jackson allowed repeated bank runs and economic crashes until finally addressed in 1913 with the creation of the FED. Now, many of his followers want to abolish the FED and many other regulatory agencies protecting investors. (See last week’s article.)
3. Presidential imperialism. Jackson pushed the boundaries of executive power, and took unilateral action without consultation with advisors. Jackson ignored Supreme Court decisions he didn’t like, and undercut the rule of law. He notoriously disregarded advice from his cabinet, particularly in vetoing the extension of the charter for the Second US Bank and in withdrawing Federal funds from that bank and depositing them in friendly state banks. A number of Jackson’s cabinet resigned in anger at their treatment over various issues. Trump has the same disregard of his advisors; has seen the same kind of resignations and angry denunciations by former appointees, and threatens to do much more, promising to be a dictator on day one.
4. Exacerbating racial tensions. Jackson supported the expansion of slavery, the expulsion of Native Americans, and subjugation of Hispanic territories. While he was cautious about Texas joining the union, and his Vice President Martin Van Buren continued the policy, the belligerently “Jacksonian” President James K. Polk dropped all caution and, claiming Mexico had attacked across the border, launched the Mexican-American War that resulted in nearly 60% of what had been Mexico becoming part of the US.
5. Creating a cult of personality. Jackson cultivated a public persona and created a cult of personality and a propaganda channel by using the press to his advantage. Jackson recognized and took full advantage of the spread of partisan newspapers and growing literacy among the masses by giving favorable treatment to supportive editors and publishers. Trump also recognizes the power of propaganda, using the new social media as a channel of direct communication with the public that lacks the institutional mechanisms of the old media to correct his lies and errors.
6. Cultivating partisanship. Jackson brought about the Democratic Party, made in his image and filled with his supporters. It was the MAGA movement of the day, and was far removed from the Democratic Party of today but very close in policies and character to today’s Republican Party. There was even an American Party that arose to support Jacksonian candidates in the 1840s. It opposed immigration and advocated American dominance of the Western Hemisphere and Manifest Destiny (territorial expansion). When it dissolved in rancor, most members became Democrats. Democrats went on to drive secession when their policies began to meet increasing resistance in the Free Soil states. Trumpers in Texas and elsewhere threatened secession and civil war when Biden won in 2020, and his followers even attempted to overthrow the government. Now Trump is pushing expansionism, demanding control if not ownership of Greenland, the Panama Canal and Canada.
7. Attacking government and institutions. Denouncing elites and claiming to represent common folks against the political establishment, both Jackson and Trump attacked what Washington D.C. had come to represent. Both acted as outsiders and challenged the status quo in institutions and political norms. Jackson packed the government with partisan appointees. Trump wants to replace up to 50,000 non-partisan civil servants with political appointees. Both emphasized loyalty over competence, and both took pride in their anti-intellectualism and lack of deferment to expertise. Jackson’s loyalty tests and the Project 2025 vetting of nominees for appointment via literal tests of their loyalty (who won the 2020 Presidential election is one question asked; and the answer better be Trump) are of a kind.
Back From the Dead
Project 2025 envisions a series of Trumpian policies that advocates expect to become core policies of any Republican candidates in future—a type of movement very similar to Jackson’s version of the Democratic Party. And, it is based on many of those same dark motives bulleted above.
Lessons from the Jackson era provide warnings about Trump and the dangers of MAGA Trumpist successors in future. Investment in the US following Jackson went through repeated upheavals and disruptions driven by presidents pushing Jacksonian policies. Any Trumper getting elected after Trump would likely be compelled to follow Project 2025 type policies. And upheavals will follow.
Caveat Emptor. Investors should beware the lessons of the past.
If a manager of a company has a record of fraud and failure, putting him in charge of anything you are invested in should be an alert for you to act to protect your investment.
History gives us some idea where that kind of partisanship and disruption of political norms and the rule of law might lead.
All we need do is review what Jacksonianism led to.
Almost every president after Jackson followed many of Jackson’s policies and even more of his partisanship. That is what we will have to look out for after this second, more decisive and more divisive, coming of Donald Trump as President.
What Jacksonianism did and Trumpism may Spawn
Martin Van Buren, Jackson’s VP, served from 1837 to 1841. He spent most of his term trying to deal with the economic crash Jackson left behind. But one crisis he dealt with foreshadowed much that followed. African slaves revolted and took over a Spanish ship, the Amistad. Instead of allowing the slaves to return home, or stay in the US in the states without slavery, Van Buren supported returning the rebel slaves to Spain and slavery.
Van Buren was succeeded by the Whig William Henry Harrison from the opposing Whig party, who died after a month, and then by Harrison’s VP John Tyler, a Whig who was expelled by his own party because he largely followed Jacksonian policies. Tyler strongly supported annexation of Texas and vetoed attempts to establish a new national bank. Jackson was the first president threatened with impeachment, and Tyler, regarded as a turncoat by his former party, ended up being the second president threatened with impeachment.
Similarly, we can expect some Democrats in future to adopt certain Trumpian policies and attitudes, for example on the border and immigration. We have already seen Biden continue with Trump’s tariffs on China and, after a drumbeat of right wing criticism, we saw Biden adopt Trump’s policy of virtually closing the border to immigration, even of refugees with human rights claims.
James K. Polk, a fervent Jacksonian who presided 1845-1849, vastly expanded slave territories and exacerbated sectional tensions. His unjust war with Mexico left a lasting legacy of ill will between neighboring nations. If Trump betrays Ukraine, leaves NATO, or starts trade wars or even actual wars with allies, expect a similar long-lasting legacy of ill will and distrust.
Franklin Pierce, President from 1853 to 1857, was another Jacksonian Democrat who supported slavery, removed more Native Americans, and wanted to expand US territories including the purchase of Cuba from Spain, or if refused, its acquisition by force. He invented “gunboat diplomacy” when he sent a fleet of ships into Tokyo Bay and forced Japan to sign a treaty opening up trade with that hitherto forbidden nation.
His foreign policy behavior was probably closest to the way Trump conducts foreign policy. Who knows how long the current Trumpian noise about Greenland and the Panama Canal will echo, especially if the post WWII taboo (stated in Article 1 of the UN Charter agreement) against territorial expansion by force stops being respected by even more states. Already Russia, Iran, China and N. Korea are actively supporting the violent change of UN member Ukraine’s borders.
James Buchanan, another Jacksonian (Democrat) and President from 1857 to 1861), supported the Dred Scott decision that ruled African Americans could not be citizens (he opposed birthright citizenship, as did Andrew Johnson and as Trump does today). He also supported the seizing of Cuba. His inaction in the face of secessionist declarations crippled Federal responses and defenses, permitting the Confederate states to successfully prepare for civil war without hindrance.
That civil war erupted in 1861.
Another civil war may be in our future as a consequence of Trump’s reascension.
You may have noted that almost every president after Jackson followed many of Jackson’s policies and even more of his partisanship. That is what we will have to look out for after this second coming of Donald Trump. And that partisanship, particularly over white supremacy and whether African Americans were equal human beings deserving of human rights, is what led to the civil war. Today that battle is over whether gays, trans, and other minorities deserve equal protection and equal human rights to the white, particularly white, male, hetero “majority”.
There is even a battle over whether women have equal rights with men over their own bodies.
As you can imagine, the Civil War significantly affected the US economy. Mississippi, which had been the richest state in the union, became the poorest, and stayed that way right to the present day. South Carolina, where the rebellion started, did not achieve the same level of per capita income in 1861 until 1961.
There are serious dangers in compromising with Trumpism, just as there were dangers in compromising with Jacksonianism.
Again, history gives us lessons.
We Cannot Let Trumpism Fester
The Democratic Party of today needs to take note. Compromising with Republican extremism can have fatal consequences, just as such compromises led to disaster with key elements of Jacksonianism such as white supremacy and the patronage system. The filibuster (first record of use was in 1837) and seniority system (begun after the civil war at the instigation of Southern senators) were key steps by change resistant Southerners to resist efforts to truly achieve equal civil rights for all. And the filibuster and seniority system still are used for that purpose as well as to stymie all other improvements in the lot of most Americans.
One final lesson from the past: Abraham Lincoln (who would be considered a Bernie/AOC type Democrat today) chose Andrew Johnson, a “Union Democrat” as VP in an attempt to reach across the aisle during the Civil War.
It backfired, horribly.
When Lincoln was assassinated, Johnson took over and promptly began to undermine Emancipation and unravel the newly granted suffrage of African-American men. He rescinded land grants to former slaves. He sowed the seeds of Jim Crow, turned a blind eye to the rise of the KKK, and began the pattern of repeated Northern attempts to placate implacable Southern white supremacists and secessionists.
Learning from the past in order NOT to repeat it
The Democratic Party of today needs to take note. Compromising with Republican extremism can have fatal consequences, just as such compromises led to disaster with Jacksonianism.
There are still more lessons from this period that apply to us, and particularly to the future.
Jackson’s mismanagement of the currency and the banking system (culminating in the Panic of 1837) contributed strongly to global upheavals in the 1840s that eventually resulted in the revolutions of 1848. Jacksonian Presidents Van Buren, Polk and Andrew Johnson contributed significantly to American upheavals all through the 1840s and into the 1860s.
The worldwide revolutions of 1848, born in part out of the suffering caused by Jacksonian currency crashes, were also sparked by the rise of economic liberalism and globalization and, like today, accelerating technological change. There were also new plagues (on potatoes) and massive waves of immigration during the 1840s that led to the first anti-immigrant movement in the US (the American Party or Know Nothings).
This context seems achingly familiar today. Trumpism is largely a reaction to economic neoliberalism, globalization and migration fueled in part by climate change.
We may expect similar social upheavals if Trump and the MAGAs screw things up as badly as expected. Bird flu hits both the food supply and us. It and climate change accelerating under Trump could lead to the potato famine of our time and even more massive waves of immigration and reaction as crops fail and climates turn deadly. Trumper’s fantasies about paying off the national debt by making crypto currencies part of the reserves could lead to global economic chaos.
Economic disruption is a cradle for radicalism, rebellion and revolution.
Jackson and Trump fostered disruption, fanned dissent, and curried conflict.
The wounds from Jackson’s reign were further deepened by those who followed Jacksonian policies and who cultivated partisan populism in the bid for power. The US entered a period of chaos and calamity that culminated in civil war and impoverishment that lasted decades in large parts of the country.
We Have Invested too Much in America to Cede its Future
The Civil War left bitter seeds that Trump and Project 2025 are cultivating as hard as they can. It is no surprise he wants to rename military posts after Confederate traitors. After all, his own betrayal was awarded with re-election.
Take that as a lesson in the troubled times ahead. And perhaps, a forewarning if we Democrats do not act to oppose Trumpism in all its manifestations.
We must not throw away the future in the name of burying the past. We have invested too much in this country to let those who want to “burn it all down” like Bannon does get away with it. If Democrats regain power, they must, this time, pursue all those who collaborated with those who are truly the enemy of America.
“Reaching across the aisle” in this case like Amy Klobochar and other Quisling Democrats want to do is betraying all who sacrificed so much to preserve and promote our union and its founding promise of liberty, justice, and equality for all. And we cannot any longer tolerate those who like Merrick Garland, dither and delay in the enforcement of justice on those who delight in destroying our hard won freedoms or our hard won prosperity.
We need more American representatives like this one:
Democrats we need more of.
*A note on compromising with the dishonorable: My disdain of Jackson and the racism of his Democratic Party long kept me from re-registering as a Democrat. One of my ancestors is buried on the battlefield at Vicksburg. He served as Captain of US Grant’s Battery No.1. My grandfather, born in 1858, said his earliest memory as a boy was watching the Grand Army of the Republic marching home in victory. When Ronald Reagan declared his candidacy in a graveyard full of Confederate “heroes” in Mississippi, I knew then the Republican Party of my ancestors was dead. And having grown up around Southern Democrats and having seen them switch wholesale over to being registered as Republicans, I knew what the Republican Party had become. But until the Democratic Party finally stopped celebrating “Jefferson-Jackson” day and claiming these two slavers as founders, I hesitated.
To this day I hate carrying 20 dollar bills around, and welcomed with delight Obama’s decision to put Harriet Tubman on the $20.
Where is the Tubman Twenty? And why haven’t Democrats finally ceased honoring Jackson by putting his portrait on the very currency he disdained and destroyed? Will we permit the same travesty with Trump? I am sure Republicans will want to put his ugly mug on the $50, replacing hero of the Union US Grant with this Neo-Confederate traitor.
And I still refuse to call National airport in D.C. anything else.
Next Week:
A deeper look at inflation prospects and technical aspects of crypto currency risks to the banking system and the dollar. Hint: What would happen to crypto currency as a medium of exchange if Russian or Chinese hackers brought down the power grid or crippled internet access to crypto currency “wallets”? What if P=NP instead of, as currently is believed, but is unproven, that P ≠ NP? And how secure from hacking or breaking, even if P ≠ NP were proven, are the cryptographic algorithms controlling the creation, storage and transfer of crypto currencies? Specifics on the dangers crypto poses to the dollar as the global reserve currency.
Disclaimer and disclosures:
I am not a CFA (chartered financial analyst). This article and comments are not investment advice from a fiduciary. They are discussions among investors with varying levels of experience. For over 30 years I taught state-market interactions at under-graduate and graduate level, focusing mainly on economic history and thought as well as specialized classes on international trade structures (WTO) and dynamics, and public administration as it relates to economic policy making, taxation and regulation, mainly in China. I was an area political-economic risk analyst for a decade for an internationally known risk assessment firm. I have technical degrees (and experience) as well as academic degrees, including a certification in Military History from West Point which would have let me teach ROTC classes if I had not gone overseas. I also started two small businesses (one a B-corporation type) and currently farm (organically and sustainably) in WA state. I have managed my own investment portfolios for at least 25 years. All advice is offered freely and from this context.
