Alastair Crooke
The golden age of America, if it ever was golden, is no longer to be found.
The starting gun for the U.S. 2026 Midterms was fired this week with three consequential elections and a key re-districting poll held in California. The Democrats swept three major races (NY, NJ, VA) and won the re-districting proposition in California. Californian re-districting could give the Democrats a further five seats in the House.
But the lens by which to understand these events perhaps is better that of the last British general election: The governing party was both discredited and widely disliked. The British electorate wanted to deliver to it a resounding slap - which they duly did. The problem was that electors did not like the alternative parties so much either. But to send the message, they had to vote for something. The Labour Party won a thumping majority, but no real mandate. The new Prime Minister, and his party (as it turns out), is as widely disliked as his predecessor.
Politics in the UK are broken for now. It is largely the same in France.
So, when the headlines say the Democrats 'swept' the races in the U.S., it likely reflects the same double-dislike that is evident in Europe. American Populists do not care for either Party's ruling Establishment, seeing them as Tweedle Dum and Tweedle Dee - a plague on both your houses is their riposte. (The Democrats have their Populists too.)
This impasse is not susceptible to a quick fix. The ruling stratum is deeply embedded and owned by mega-donors precisely to keep it that way.
Nonetheless, the populist dynamic in the U.S. is irrefutable, and may soon evolve beyond the reach of donor speech repression structures.
The primary reasons for this impasse are deeply structural, as well as ideological.
Structurally, there is a crisis affecting all but the top 10% or so of households. The U.S. stock market has entered a fantasy euphoria: Fundamentals do not matter; data does not matter; only the meme of the day and how to trade it matters. (The top 10% of households oowns 87% of all stocks).
The bottom tier of society however, is further 'punished' by price rises (inflation) that have resulted in a crisis of consumer confidence not seen in decades. Even regular staples are being left unsold on supermarket shelves.
But criticism of Trump policies and especially tariffs (for their effect on prices) has been notably muted since this summer - the Financial Times writes - when Trump called for Goldman Sachs to fire its Chief Economist, who had penned a level-headed note on trade tariffs that drew the President's ire. Cold water. Only two gurus seem licensed to speak their mind - Bridgewater's Ray Dalio and JPMorgan's Jamie Dimon, the FT opines.
The key structural shift sending shivers of anxiety at prospects of coming social unrest down the spine of the financial panjandrums however, is a simple chart showing vertically soaring U.S. stock market prices for its up-vector, crossing at a certain point with a sharply downward trajectory of job-openings. It is being widely termed a 'death cross'.
This chart explains a lot of what hides in the background to western election outcomes.
The crossover point - where the vectors divide so explosively - is given as the launch date of the AI tool Chat GPT. The chart thus foreshadows a social time bomb. Are big companies anticipating that AI will bring massive job replacement?
Is such an outcome probable? A recent MIT study by contrast found that 95% of companies that had invested in AI tools were seeing zero return, and concluded that today's AI doesn't understand 'environments' - It just pattern-matches inside them.
Either way, the prospect is dour: It is either a crucial market misjudgement by the U.S. AI giants - one that might trigger a market crash - or else, the U.S. AI majors correctly are foretelling a coming tsunami of job replacements. Whichever it is has huge political implications.
Whether their judgement is right or wrong, the reality is that, with the top 4 U.S. AI spenders planning on investing $420 billion on infrastructure next year, the "Godfather of AI", Geoffrey Hinton, says this level of spending can only be justified by replacing humans: "I think the big companies are betting on it causing massive job replacement by AI, because that's where the big money is going to be... I believe that to make money you're going to have to replace human labour".
Just to be clear, Trump has made his bet on the U.S. dominating global AI: "If you go a couple of years out, you're gonna see numbers like you've never seen. We're building some of the biggest buildings ever built anywhere in the world: The AI buildings".
Yet the CEO of Nividia told the FT that China will overtake the U.S. in AI, and Open AI has been angling for a government loan guarantee.
The 'geological' fault line here is that there is not one American (or European) economy, there are two quite separate economies: A financialised cornucopia as one, and structured privation as the other. The two do not meet. The West has invested too heavily in the 'cornucopia' model to be able to change it at short notice. It would mean turning deep 'architectural structures' inside out.
If this is so, Trump is in peril and the November U.S. Midterms may be fraught. The outlook is inherently unstable. The AI bubble may anytime pop and trigger a sell-off in markets. And the U.S. Supreme Court too, possibly might rule that Trump's heavy reliance on tariffs - both as a weaponised geo-political tool, and as a source of revenue to plug deficit holes in the Federal budget - be deemed to be partly or wholly unconstitutional.
Trump has said that, were the Supreme Court to rule his tariffs unconstitutional: "We would be defenceless, leading perhaps even to the ruination of our Nation".
The outlook is unstable too at the level of Trump's base: MAGA supporters backed away from the ballot this week, either staying home, or flipping to Democrat.
At the root of the MAGA disenchantment is both the 'split economy', but also - in the wake of the killing of Charlie Kirk - a growing breach between MAGA 'America First' supporters and the pro-Israel mega-donor cadre. Trump's close identification with Netanyahu and Israel has been demonstrated to be a losing issue electorally. Yet, this is the sphere in which - uniquely - Trump is not simply transactional. He acts and speaks - and 'walks-the-walk' - of a zealous Zionist.
The big question therefore, is can Trump re-define himself in the wake of a clear signal that the Midterms are his to lose? If he cannot recalibrate, he faces a year, after which he may find himself facing House investigations or even impeachment - and with the U.S. entering into political and economic turmoil.
Trump's options are limited: He will not be allowed to row back on the donor-financed deep foreign policy architecture that has been in place for four decades: i.e. unqualified support for Israel and the unconstrained open resort to U.S. military action wherever actors decline to align with U.S. and Israeli positions, or refuse to defer to dollar trade primacy.
Backstopping AI, which is viewed by much of MAGA as 'Orwellian', is no vote winner too. The key to the future (whether for the U.S. or Europe) is who can persuade voters they can, and will, provide solutions to the 'bread-and-butter' structural contradictions ruining their electors' wellbeing.
Were Trump to be hammered in next year's mid-terms, there will be no returning to the neo-liberal ways of the last 40 years. No candidate in the U.S. or Europe can any longer expect to win on a pro-globalisation or a DEI platform. That much is obvious. And if political solutions are disallowed (or gerrymandered) by the ruling strata, then insurrection becomes possible.
The bottom line? Trump's foreign policy will face disruptions from both Israel (exacerbating MAGA disquiet) and from Europe. The European élite technocracy is still in denial that they are widely seen by their electorates as dysfunctional failures. Complacency that somehow a return to 'normal' will follow Trump's expected loss at the midterms permeates their otherwise sealed technocratic retort.
To insulate themselves politically from imminent defeat in Ukraine, the European Establishment is sanguine that it can succeed in repressing dissent forcibly, and further control media narratives. 'Russophobia' is their only rallying cry and we may expect further provocations aimed at Russia. They (still) hope to prove that they were right, all along - that Russia is indeed the threat. The Élites may believe that, but their electorates do not, despite the prevalence of 'Estonia-itis' as the 'Baltic tail wagging the EU dog' has occasionally been termed.
The Trump 'Order' is inherently unstable. Facing evident western decline, Trump sails 'heroically' against the tide - trying to revive the golden age of America. But that age, if it ever was golden, is no longer to be found. It has passed away; MAGA is finding its values more with the Pat Buchanan legacy, rather than from the Bush-Cheney world.
When the fundamental balance of an 'order' has become disrupted beyond a certain point; when the young turn against illusion and begin to search for something fresh to supplant the tired patterns of the old... this is known as waiting for the new moon.
That's where we are. Waiting.