Peter Schiff has suggested only half-jokingly that the current administration could go down like the Carter administration -- a one-termer that gets blown out by a whole new movement from the rival party, akin to the Reagan Revolution only with the parties and values switched.
He's talking mostly about the effects of the financial crash that will happen sometime before Trump's first term is up. It will be far worse than anything we've experienced so far, because it has had far more air blown into it than previous bubbles. The Obama bubble was inflated by 0% interest rates for 8 straight years, plus trillions of toxic debt off-loaded from commercial banks' balance sheets and onto the central bank's balance sheet. If the coming crash is far worse than the 2008 recession under a Republican, it will propel a far more left-wing Democrat than Obama into the White House.
Although that dynamic may play out, it does not mirror what happened under Carter. However, there are a lot of similarities between the Carter and Trump administrations. To summarize, they are attempts to re-unite an old band for a tour with a whole new sound. The winds of fashion have shifted since their heyday, and they sense that and respond to it -- but they just can't pull off the new sound very well, and they quickly get replaced by a different band to whom the new sound comes more naturally.
In other words, they were the initial terms of a society-wide re-alignment, but they were not the natural party to execute this re-alignment, so they were quickly switched out for their rival party, who were more natural fits into the new zeitgeist.
For Carter, the shift was away from the New Deal coalition of Democrats, in which the Deep South was a constant, and the Northeast was the next most reliable member. The split stemmed from the Civil Rights movement, which the Northeast favored but the Deep South opposed.
After the Deep South had drifted away from the Democrats during the '60s and early '70s, the winner of the Democrat primary in '76 was a Deep Southerner himself who was conservative on social-cultural issues and wanted to deregulate the private sector from the government. He was a joke to serious observers at the outset of the primary, but overcame a very crowded field of more experienced candidates on a campaign of being an outsider untainted by Washington corruption (in the wake of Watergate).
In the 2016 GOP primary, the Rust Belt states had long left the Republican coalition that they had belonged to under the party's heyday during Reagan. The winner of the primary hailed from one of these states, who campaigned against his party's stereotype on social-cultural issues (ignoring them mostly, and being liberal on the major hot-button topic du jour -- homosexuals).
He went strongly against the economic orthodoxy of his party, preferring to re-industrialize through strong tariffs and exiting free trade deals, and favoring single-payer healthcare. He began as a joke candidate in the eyes of the serious people, but overcame a crowded primary field full of governors and senators, owing to his outsider status and promise to "drain the swamp".
In the general election, both '76 and '16 were close races in the popular vote and Electoral College, with Carter winning 297 and Trump winning 306. Re-alignments will not necessarily be wipe-outs, as the population may be cautious about shifting gears too fast. Carter did in fact win back the Deep South and the big prize of Texas, while Trump won back the Great Lakes states and the big prize of Pennsylvania.
For a brief moment on election night, it seemed like a long-lost chunk of the FDR coalition was back for Carter, and that a long-lost chunk of the Reagan coalition was back for Trump. By the very next election, most of those won-back states for Carter would be stolen back by the Republicans, and it seems likely that the Rust Belt states will be stolen back by the Democrats in 2020.
Even more promisingly, both administrations began with unified control of the White House and both chambers of Congress. The party looked invincible, and the possibilities endless!
But the honeymoon was soon over. Really, their second honeymoon, as these administrations were more like a re-marriage among members who had already divorced awhile ago. Quickly they remembered why they got divorced in the first place.
The following evaluation borrows from Allan Lichtman's 13 Keys to the White House, an election prediction model that has been right since it began in the '84 election, and fitted retrospectively back to 1860. It was one of the two historical models that I relied on to correctly predict that Trump would win in 2016, along with Helmut Norpoth's primary model.
The incumbent party's mandate in the House of Representatives fell in the '78 mid-terms compared to the previous mid-terms, and compared to the recent presidential year. No one believes that the Republicans will come out of the '18 mid-terms with more Representatives than they had in the previous mid-terms of '14, nor compared to the recent presidential year.
In the Senate, there were fewer Democrats after the '78 mid-terms compared to either the previous presidential or mid-term election. The Republicans will be lucky to come away with more Senators after the '18 mid-terms than either of the two previous years, since they've already lost one in one of their safest states during a special election (Alabama). They may not hemorrhage, given a map more favorable to them, but they won't pick up big numbers, if any.
The election of the re-alignment candidate reflected a dissatisfaction with the party as a whole, so while the presidential candidate scored a shock victory for his change-of-pace platform, the entire party in Congress suffered losses since not all of them were change agents.
The contradictions that came from re-marrying an old partner during a new stage of life -- trying to base something novel on something traditional -- led to a breakdown in the party's ability to get the government to work on a basic level. The Carter administration was wracked by multiple failures to fund the government, for the first three out of his four years -- despite the party controlling the White House and Congress. The Trump administration has been hit by its own funding failure during its first year, and the way things look going forward, there could be more in store for its second, despite Republican control of the White House and Congress.
These are the only two modern administrations to suffer from funding failures despite single-party control of the White House and Congress.
In the Carter funding failures, the contentious issue was federal funding for abortion (via Medicaid). The House wanted more stringent restrictions than the Senate did, and the House's stance reflected the change in the party owing to Carter running as a born-again evangelical Christian. In the Trump funding failure, the sticking point was immigration, with the House in favor of more restrictions than the Senate, and the House reflecting Trump's campaign as a hardliner on immigration.
Being pulled in two different directions, old and new, also meant there were no major changes to national policy under Carter. He did kick off the deregulatory mania that has reined since his term, but it was fairly limited in scope (targeting mostly transportation). But there were too many of the old school New Deal Democrats in his coalition to permit an unfettered pursuit of laissez-faire policies. That would have to wait until Reagan.
Given the schizophrenia of the current government, we can't expect to see major changes of a populist or nationalist sort either. Trump will probably score a noteworthy change here or there in the new populist zeitgeist, like Carter kicking off the deregulation craze, but nothing major. There are too many old school corporatist Republicans in Trump's coalition to permit a full-throttle populist transformation. That will have to wait until Bernie after him.
During their re-election campaigns, Carter and Trump benefit from being the sitting president (assuming Trump runs again, but his replacement would also enjoy incumbent party advantage). But that's as far as the incumbent president's advantage would go -- there will be major disruptions from other candidates, reflecting the schizophrenia of the initial term of a re-alignment based on a re-marriage.
The first disruption to Carter was a bruising primary challenge from a major figure of the old school, namely the New Deal Northeastern liberal Teddy Kennedy. He didn't like the strange new direction that Carter was taking the party in. Trump will certainly face a brutal primary challenge in 2020, from some major figure of the old school of Reaganite conservatism -- let's just say Mitt Romney -- who cannot sleep at night knowing the perverse direction that the president is steering his party in. These primary battles severely damage the incumbent during the general.
The second disruption will take place in the rival party, also falling along old vs. new lines. In 1980, Reagan was even more of a socially conservative deregulator than Carter. That provoked a third-party run from a member of the old school of Reagan's party -- John Anderson, who was a social moderate and not a hardliner toward government influence over the economy. His third-party run gave Carter's rival a boost, because now there were two choices splitting the non-Reagan vote. Reagan was the pure example of the new direction, so if you didn't want the new thing, you had two choices. That vote splitting was enough to give Carter's rival a victory in several states that he never had a chance at in a heads-up match (like New York and Massachusetts).
In 2020, Bernie will be even more of a pure populist than Trump, who by that time will have a far less populist appeal after the lackluster track record of his schizophrenic, start-and-stop term. Bernie's social-democrat campaign could provoke a third-party run from a Democrat in the older neoliberal elitist mold -- let's just say Joe Lieberman. If you want the novel thing, populism, you have a pure choice in Bernie, and if you don't want that, you have two choices -- a neoliberal Lieberman, and a quasi-populist but more conventional conservative in Trump. That would split the non-Bernie vote and make it not only easier for him to win, but to win states that a Democrat should never win. For example, if Texas gave 25% to Lieberman, 35% to Trump (for 60% non-populist), and the remaining 40% to Bernie, who wins a safe red state due to the splitter effect.
The triumph of the pure examples of the new zeitgeist will come as vindication to candidates who had previously run in their party's primary (and when it was incumbent) but lost to a business-as-usual candidate. Reagan ran in the '76 primary but lost to conventional Ford, and Bernie ran in the '16 primary but lost to conventional Hillary. They were both just a little bit ahead of their time.
Why doesn't the natural party for the new zeitgeist go with it right away? Probably because a major change is more likely to come from a party that is more desperate for a win, especially its voters. They're more willing to take a high-risk high-reward gamble -- Democrats on Carter in '76, and Republicans on Trump in '16. After being jolted awake from their laurel-resting complacency by these shock victories, the more natural party learns which way the winds are clearly blowing, and takes over its comparative advantage issue.
Deregulation was more fitting of the business-oriented Republican party, but it began with a desperate change election for an against-type Democrat deregulator. And populism is more fitting of the working-class-oriented Democrat party, but it began with a desperate change election for an against-type Republican populist.
So Trump supporters who voted for populism should not worry too much if little is achieved on that measure during his term. The larger winds of change are clearly blowing in a populist direction, and it will be no big deal if the other party is the one who ends up delivering the goods. It is a more natural fit for them, after all.
Like Carter -- or at least, Carter's administration -- Trump, or at least his administration, will probably be remembered as one of the worst due to the schizophrenia, paralysis, and general malaise that comes during the necessary initial shifting of gears during re-alignment. Neither will get credit from the general public for giving the first push in the new direction, although historians will point that out. In general, though, it will be the pure example who will command the most contemporaneous admiration, and nostalgia after the fact.
Carter was Reagan's opening act, and Trump will be Bernie's.