As the shock of Donald Trump’s victory sinks in, pundits and politicians are mulling what it means for the future of the United States and global politics. Understanding why such a divisive, unqualified figure won again is crucial for the Democrats. Did they go too far left and lose the moderate Americans who make up a majority? Or did centrist neoliberalism -- pursued by Democratic presidents since Bill Clinton -- fail to deliver, thus creating a demand for change?

To me, the answer is clear: 40 years of neoliberalism have left the US with unprecedented inequality, stagnation in the middle of the income spectrum (and worse for those below), and declining average life expectancy (highlighted by mounting “deaths of despair”). The American Dream is being killed, and although President Joe Biden and Vice President Kamala Harris distanced themselves from neoliberalism with their embrace of industrial policies, as representatives of the mainstream establishment, they remained associated with its legacy.

The economics of the moment mattered, but monthly employment and inflation indicators need to be understood in a broader historical context. As the Biden administration stressed on the eve of the election, the economy looks strong, especially compared to others in the G7. But this wasn’t good enough. Americans haven’t forgotten that the Democrats let loose the financial sector (Clinton), then bailed out the banks while homeowners and workers who lost their jobs in the Great Recession carried the cost (Barack Obama). Moreover, it was Clinton who unleashed globalization, tacitly believing in a trickle-down economics that would ultimately benefit everyone. The only real difference between Democrats and Republicans on this score is that Democrats claimed to feel the pain of those who were losing out.

The tragedy is that Americans seem to have voted for mere disruption more than anything else. Stalked by economic precarity and the specter of downward social mobility, tens of millions of Americans voted for Trump as a way of “sticking it to the establishment,” and because many seem to believe that he has their back.

He doesn’t. Trump’s first term and his 2024 election campaign made it abundantly clear that he has no intention of enacting the types of policies that ordinary Americans need. He favors tax cuts for billionaires and corporations; an end to the Affordable Care Act (Obamacare); and sweeping tariffs, which are effectively a tax on US consumers and businesses. Most likely, the tariffs will be riddled with corrupt exceptions bought by campaign contributions; and in any case, they are sure to provoke retaliatory measures and a loss of American jobs.

Trump will also generate massive budget deficits, which will lead to high interest rates and less investment in America’s future. If he and congressional Republicans follow through on repealing the Inflation Reduction Act (which includes provisions to reduce prescription-drug prices) and Obamacare, Americans will find themselves with less access to medical care and higher costs.

This is all worse than neoliberalism, which at least purported to promote competitive, undistorted markets. Trumponomics is ersatz capitalism, run for and by the powerful, and according to the principle that money matters above all else. Americans, it seems, have lost trust in their institutions and the belief that government will deliver for them. It is the predictable result of 45 years of Republican (and neoliberal Democratic) campaigning, starting with Ronald Reagan’s famous quip that “the nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”

The culture wars also played a big role in Trump’s victory. His campaign successfully pushed the message that Democrats are obsessed with gender, race, and other social issues at a time when most Americans are just trying to get by. Many voters concluded that Trump would reverse or at least slow the pace of disorienting changes that have challenged long-established social hierarchies and roles.

Like nationalists everywhere, Trump blames America’s problems on outside forces, from immigration to “unfair” trade. But while it is true that neither issue has been managed very well, his proposed solutions would be disastrous for the US economy and the world. The extent to which his voters understood this is unclear. Most seem to have been drawn to the political theater. They wanted to send a message of dissatisfaction, and now they have done so.

For the Democrats, that message should be clear: abandon neoliberalism and return to your progressive roots in the presidencies of Franklin D. Roosevelt and Lyndon B. Johnson. The party needs to provide a new vision of a society that offers education and opportunity to all; where markets compete to produce better products that enhance living standards, rather than to devise better ways of exploiting workers, customers, and the environment; where we recognize that we have moved on from the industrial age to an economy oriented around services, knowledge, innovation, and care. A new economy needs new rules and new roles for government.

There is a big difference between this new vision and the tweaks offered by the Harris campaign (a little more education funding here, and a few dollars to help first-time homebuyers there). Articulating a robust program will not be easy, and implementing it would be harder still. But the future of America depends on it being done.

Joseph E. Stiglitz

Joseph E. Stiglitz, a professor at Columbia University, is a Nobel laureate in economics. The views expressed here are the writer's own. -- Ed.

(Project Syndicate)