Is America's Republican Party Collapsing?

This question is the focus of fiery debates at Republican Party headquarters, big battles on the campaign trail, and hush-hush discussions in the back rooms of the U.S. Congress. If the answer is yes, the ensuing shock waves will not be limited to just one party. Nor will they be strictly political. If it’s true that the party of Abraham Lincoln, Theodore Roosevelt and Ronald Reagan is truly splintering, it could threaten America’s two-party democracy … radically change the government’s economic policies … and shake Wall Street to its core.

A GOP collapse is precisely what many pundits are predicting …

Senator Lindsey Graham of South Carolina says Republicans are in a “demographic death spiral.”

The New York Times writes, “the Republican Party is facing a historic split over its fundamental principles and identity.”

The Huffington Post goes even further, comparing it to the fall of the Berlin Wall. Their own words:

“The Soviet Union seemed permanent and invincible, until it didn’t. When it fell, far more suddenly than anyone thought it would or could, the festering rot of decades was exposed to the world. We’re seeing this happen, in real time, with the Republican Party.”

Who’s to blame?

Some among the party elites say it’s mostly Donald Trump’s fault.

Others blame themselves for not attacking Trump sooner.

Still others insist that the truly big blunder is neither of the above: It’s the fantasy of the establishment that they can somehow find a new base of voters as easily as the base can find a new establishment.

The crux of the dilemma, as seen from the perspective of party elites:

  • If the Stop Trump movement succeeds, they fear they’ll lose his voters in mass and forfeit the 2016 election in a landslide defeat. And …
  • If the Stop Trump movement fails, they fear a similar outcome.

What many pundits seem to be missing, or deliberately ignoring, is a bigger, more durable reality — namely that …

Republicans have made huge gains, and the GOP establishment won’t give them up without a massive fight.

To understand why, look at America’s 50 states, and ask this simple question:

How many state governments are fully controlled by Republicans, including the governor’s mansion, the state senate and the state house?

And how many are fully controlled by Democrats?

The map below, from Ballotpedia, gives you the answers:

 

 

Republicans control 23 states; Democrats control only 7.

In other words …

In the battle for state governments, Republicans are winning by a margin of better than three-to-one.

Or consider these two landmark changes:

  1. Nearly every region: In the past, Republican control was often limited primarily to the nation’s midsection, while Democrats dominated on the East and West coasts.

     

    Today, at least on the state government level, that dichotomy is mostly gone. Nearly all regions have swung heavily toward Republicans.

    Indeed, with the exception of four of the nation’s smallest states — Vermont, Connecticut, Rhode Island and Delaware — Republicans have full control or shared power in every state government east of the Mississippi.

  2. The most populous states: Also in the past, most of the red states were those with smaller populations, while blue states typically had larger populations, a big advantage for Democrats.

But now, among the 10 most populous states in the nation, Republicans have full control in SIX states —

  • Texas, the nation’s 2nd largest
  • Florida, the 3rd largest
  • Ohio, #7
  • Georgia, #8
  • North Carolina, #9, and
  • Michigan, #10.

In contrast, Democrats control only ONE — California.

Thus …

In the battle for the 10 biggest demographic state prizes, Republicans are winning six-to-one.

Does this state-level dominance guarantee a parallel dominance in presidential elections? Obviously not. Otherwise, John McCain or Mitt Romney would be in the White House today.

What it does guarantee, however, is GOP control over the infrastructure of American politics — who votes where.

The key is redistricting, whereby district borders are moved, voting maps are redrawn, and election results can be impacted for years to come.

A nonpartisan process? Rarely.

Want proof? Then check out the next map …

 

 

In 37 states, redistricting is controlled by the state legislatures (dark yellow on the map), which almost inevitably favor the dominant party of the state.

Meanwhile, only six states (green) have independent commissions — official bodies designed to make redistricting decisions that favor neither party.

So why is this such a big deal for Republicans? The answer becomes immediately obvious when you compare the two maps side by side …

 

 

See how the red areas in the first map roughly match the yellow areas in the second?

Meaning: Republicans control the legislatures in most of the same states where legislatures control redistricting.

Similarly, see how some of the blue areas in the first map match the green (or gray) areas in second?

Meaning: Even in states where Democrats control the government, they still don’t control redistricting.

In fact, among those last seven states that are still under full Democratic control, the legislature controls redistricting in only three of them.

In sum, among all 50 states in the Union, Democrats are down to just three where they still exert control over this critical process.

All this translates into a huge GOP asset: An unending series of small victories for Republicans; death by a thousand cuts for Democrats.

It gives the GOP powerful and enduring leverage not only over electoral redistricting, but also over control in Congress and, possibly, over the fate of future presidential elections for generations to come.

More Valuable Than the White House

This is a political bonanza for establishment Republican officials all across the USA. They have fought tooth and nail for it. They won’t give it up easily. And they will do whatever it takes to retain it.

Indeed, most feel that this kind of control is more valuable than any single national election, including the 2016 contest for the White House.

From their perspective, nothing could be worse than losing it. Not even four years under Hillary Clinton. They’ll accept defeat in that battle — as long as they can continue victorious in this bigger war.

What does this mean for 2016?

First, it means that, if push comes to shove, the Republican elite will dig an even deeper line in the sand to defend this hard-won turf.

Second, it means that a Democrat in the White House in 2017 may now be even more likely than most pundits think. I repeat: The Republican establishment cares less about this one battle (which many fear may already be lost) than about the big war (which they’re convinced they can continue winning).

Third, it could mean an end to America’s two-party system. If Trump wins the majority of Republican delegates but is denied the nomination, odds are strong that he will launch a third-party run. Similarly, if Trump wins the nomination, odds are also strong that at least some Republican leaders will flee to a third party.

War Cycles on Steroids

My colleague Larry Edelson, who long ago predicted this kind of turmoil in American society, recently sent me an email explaining it this way:

“What’s happening in the United States is more evidence of what’s happening right before our very eyes all over the world. It’s evidence of powerful long-term economic cycles that are calling for a massive sovereign debt crisis, geopolitical stress and revolution, civil wars, hoarding of money, and deflation.”

Even if the GOP remains unified for the presidential campaign, he’s right. As I showed you here last week, political and social polarization in the United States is already greater today than at any time since the Civil War. (Skeptical? Click here for a blockbuster chart that nails it.)

And if the GOP fractures at the presidential campaign level, the cycles of war that he’s forecasting — both civil and international — will be pumped with steroids.

Our two-party system of democracy, heretofore one of the most stable among modern industrial powers, would be in jeopardy.

Fiscal policy initiatives, already gridlocked, would be next to impossible.

The world’s largest central banks, already stuck in an Eight Trillion-Dollar Trap, would be even more impotent. (For the proof, go here.)

And in the event of a new debt crisis, which could be worse than 2008, the entire country could ultimately fracture.

Larry adds: “Third parties are rising in strength all over Europe. New Neo-Nazi groups. Separatist groups. Secession parties. Terrorist groups. And more.

His main point: This is a global trend. And no matter how bad things may seem in the United States, it’s far worse overseas. 

For investors, that means more turmoil ahead, a bull market for gold, silver and other hard assets, plus a continuing flight of capital to U.S. shores.

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