This article (HT: Mark Thoma) is very interesting as regards the role of the "decline of manufacturing" in the 2016 presidential election. Caroline Freund argues that manufacturing in fact played a minor role:
"Education and race were far bigger factors in determining the change in voting results from the 2012 election. These two factors alone explain more than 70% of the variation in the Republican vote share across counties, as compared with the last election, and more than 80% in the swing states."
Social norms are typically thought to be persistent and long-lasting, sometimes surviving through growth, recessions, and regime changes. In some cases, however, they can quickly change. This paper examines the unraveling of social norms in communication when new information becomes available, e.g., aggregated through elections. We build a model of strategic communication between citizens who can hold one of two mutually exclusive opinions. In our model, agents communicate their opinions to each other, and senders care about receivers' approval. As a result, senders are more likely to express the more popular opinion, while receivers make less inference about senders who stated the popular view. We test these predictions using two experiments. In the main experiment, we identify the causal effect of Donald Trump's rise in political popularity on individuals' willingness to publicly express xenophobic views. Participants in the experiment are offered a bonus reward if they authorize researchers to make a donation to an anti-immigration organization on their behalf. Participants who expect their decision to be observed by the surveyor are significantly less likely to accept the offer than those expecting an anonymous choice. Increases in participants' perceptions of Trump's popularity (either through experimental variation or through the “natural experiment” of his victory) eliminate the wedge between private and public behavior. A second experiment uses dictator games to show that participants judge a person less negatively for publicly expressing (but not for privately holding) a political view they disagree with if that person's social environment is one where the majority of people holds that view.
"The richest large economy in the world, says Temin, is coming to have an economic and political structure more like a developing nation. We have entered a phase of regression, and one of the easiest ways to see it is in our infrastructure: our roads and bridges look more like those in Thailand or Venezuela than the Netherlands or Japan. But it goes far deeper than that, which is why Temin uses a famous economic model created to understand developing nations to describe how far inequality has progressed in the United States. The model is the work of West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics. For the first time, this model is applied with systematic precision to the U.S. The result is profoundly disturbing. In the Lewis model of a dual economy, much of the low-wage sector has little influence over public policy. Check. The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses. Check. Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration - check. The primary goal of the richest members of the high-income sector is to lower taxes. Check. Social and economic mobility is low. Check."
All this adds up to a pessimistic conclusion -- recessions just aren’t very predictable from economic data. The reason economists couldn’t foresee the Great Recession isn’t that they’re blinkered or closed-minded or arrogant or stupid -- it’s because no one could predict it, at least not with the kind of macroeconomic data that now exist.
So the future of macroeconomic forecasting -- and of macroeconomics itself -- might lie in a different direction than the one most researchers have been pursuing. Instead of focusing on consumption, investment and other easily measurable things, economists might try thinking more about subtle, long-term buildups of problems in financial markets.
While Smith doesn't put it this way, this is a pretty good argument for why we should pay more attention to economic history (one cannot do much better than reading Kindleberger to understand the dynamics of financial crises - even with no DSGEs in sight).
This is from an interesting Jennifer Rubin article (I would just add that the GOP has not been "conservative" for a very long time - they are all for intrusive government as long as it intrudes in ways they like):
Trump has indeed taken over the GOP, scrubbed it of principle, responsibility and decency and left its “leaders” nodding like bobble-heads as he runs through a list of rotten economic policies, which if they came from a Democrat, would be condemned. Those looking for some fiscal discipline, a market approach to trade, a pro-growth immigration policy, reasonable education and training ideas, respect for individual rights and a responsible, cogent foreign policy will need a new party.