Will income inequality be a decisive factor in this year’s election?
The hot button issues in this year’s presidential election would make it seem as if it could all be decided by the middle-class vote. While many of these controversial middle-class issues involve both foreign and domestic policies, they begin and end with income inequality.
This is what’s currently fueling the middle-class revolt and it’s a movement that’s been years… decades… in the making. But who will this revolt favor come November 8?
Donald Trump sees the writing on the wall. He sees the shift coming, and he’s using it to further his cause. All of this is far more predictable than anyone would assume.
Whether it’s from unfair wage competition from Asian nations, or the outsized gains in income and wealth going to the top 1% (or really the top 0.1% as my analysis shows), one thing is blatantly obvious – extreme wealth inequality has been a major issue since the Great Recession and for good reason.
So it’s not surprising these issues have taken center stage in this year’s presidential elections. And Trump is doing his best to make them a focal point of his campaign and appeal to the plight of the middle class.
Despite this, history shows that Hillary may still have the odds in her favor.
I’ve spent my career studying large, economic cycles that have allowed me to predict booms and busts years, even decades in advance.
And the clearest correlation with income inequality stems from my 80-Year, Four Season Economic Cycle.
See the chart below:
There is also a correlation with cycles in political moods.
Right now, we’re moving through the economic winter season, when rampant deflation occurs with a sharp fall in consumer prices and generational spending. But with that also comes a steep decline in income inequality, from the peak following the fall bubble boom season.
What happens next? The bubble bursts, and it disproportionately affects this high-wealth sector as they own over 90% of financial assets.. As we have seen since 2008, there are natural populist movements that favor higher incomes for everyday workers, and higher taxes on the rich.
Look at the red and blue lines at the bottom of that chart. They roughly correlate with income inequality trends and the four seasons. The winter shake-out and spring boom favor the democratic party (innovations trickling down).
While it seemed inevitable that the issues of income inequality would once again become prevalent, predicting how decisive the middle-class vote will be, could be a little more tricky. Will ‘The Donald’ win the voters over with his focus on job creation and bans on outsourcing, or will history repeat itself, favor the democratic party, and put Hillary in the oval office?
This one may come down to the wire…