Dan White is a senior economist at Moody's Analytics in West Chester and an adjunct professor of economics at Villanova University
The 2016 election season officially came to a close with the inauguration of Donald Trump as our 45th president. What a season it was. Even before the primaries were over, we were already grasping at historical precedents from previous elections just to come to grips with what was happening before our eyes, and what our collective future could look like.
This is especially true among economists, as we have the unenviable task of trying to predict the economic future based upon this election.
Some pundits pointed to examples as recent as Ronald Reagan's victory in 1980, while others go back as far as 1828, when Andrew Jackson won what probably stands as the ugliest mudslinging match of the pre-Twitter era. What most of these previous examples have in common with each other and with 2016 is a healthy dose of populism.
In fact, you could even say that 2016 had a double dose of populism, with both Trump and Vermont Sen. Bernie Sanders running decidedly antiestablishment campaigns fueled by underlying populist sentiments.
Granted, these are two very distinct movements, but they both speak to the same truth, just in different ways. After all, what makes populist movements so popular in the first place is that in most cases they are based in at least some truth. Often it's an incomplete truth, but truth all the same.
The truth underlying these movements in the 2016 campaign was that the gap between the haves and have-nots has grown larger, and too many Americans feel left behind. What the 2016 election reminded us, though, was that you can have two very different reactions to the same truth.
For the Trump movement, the reaction was protectionism.
For the Sanders movement, the reaction was socialism.
The question remains, however: Is populism ultimately good or bad for the economy, and what will it mean to America over the next four years?
My go-to answer as a two-handed economist is: It depends.
The results of unadulterated populism can be very bad, including a devolution into any number of other "isms" incompatible with liberal democracy. At its extreme, populism is essentially mob rule.
It's what the Founding Fathers hoped to avoid when they established a republican government in which the people were represented by wise, learned representatives advocating and governing on behalf of the people. To head off autocracy, the opposite of unadulterated populism, the Founding Fathers made those same representatives directly answerable to the people.
American government is designed so that those two groups cannot operate independently of one another, at least not for very long. The representatives need the people, and the people need their representatives. When that relationship breaks down, bad things can happen. Particularly, when the establishment loses its ear for the concerns of everyday Americans, populist movements can arise.
But does that make populism good or bad? Certainly unadulterated populism is bad, but so is unadulterated elitism. Both a $15-per-hour federal minimum wage and a trade war with China would be damaging to our economy. But the fact that both of those populist proposals from opposite ends of the political spectrum are even making their way into everyday conversation is a sign to the more moderate political mainstream to refocus their efforts onto the concerns of the average American.
Populism is a check on elitism in the same way that the people are a check on their elected officials. The 2016 election reminded us of too many ugly truths still prevalent in the United States. Those truths have manifested themselves in populist movements that have garnered the attention of every elected official in the United States. The encouraging thing about 2016 is that it reaffirmed the ability of everyday people to get the establishment's attention, even with all the money in the world working against them.
So even if none of the specific policy measures put forth by the more extreme populist movements on both sides of the political spectrum are actually enacted, the fact that they are being discussed is a victory for the populists, and America, in and of itself.
President Trump, as a newcomer the likes of which the Oval Office has never before seen, has the potential to play a unique role in reconciling populist aims with establishment means. Establishment forces in Congress, of both parties, have the potential to refocus mainstream political arguments toward the most pressing concerns of everyday Americans. If the so-called political establishment can use 2016 as a wake-up call instead of a call to arms, it might be just what we needed to awaken us from the floundering status quo.