Financial, Economic and Social Mood Update (January 2, 2026)
The subject of this month’s blog is about the political history of the United States going back to the time before the USA declared its independence from the British Empire in 1776. The USA is among a few modern day nation states which has a parliamentary system largely inherited from England. This system is called a “first past the post system” in the modern day UK where seats in parliament are contested by individual districts across the entire country and not awarded according to “proportional representation” as they are in much of the rest of the world. This latter system traces historical roots to the French Revolution of 1789. Many authoritarian governments around the world have representative parliaments with governments of “national unity” which do allow for multiple political parties – but these parties are not allowed to go against the will of the national government – examples here include the People’s Republic of China, North Korea and the former German Democratic Republic (1949 to 1990).
Modern democracies with a “first past the post” parliamentary electoral or voting system include the UK, the USA, Canada, Australia and New Zealand. Most democratic electoral and voting systems in the rest of Europe, Latin America, Africa and Asia use proportional representation or even a hybrid system using some of each of the two described systems. The political system of the modern day UK traces much of its parliamentary origins to the “Magna Carta” of 1215 in which the nobility obtained concessions from the ruling monarch (king).
It is much more difficult to have third or multiple political parties in a “first past the post” system whereas in a parliamentary system we often see many smaller political parties who are represented in parliament. The two large political parties in the USA trace their historical roots to the founding of the USA in 1776 and even before that. The modern day Republican Party or GOP (“Grand Old Party”) grew out of the former Whig Party (before the American Civil War), the National Republican Party of John Quincy Adams (the son of John Adams) and the Federalist Party of George Washington. The modern Day Democratic Party has used its current name since the time of Andrew Jackson. Before 1828 it was known as the Democratic-Republican Party and before that as the Anti-Federalist Party (both names used during the time of Thomas Jefferson. Federalists (such as George Washington, John Adams and Alexander Hamilton) or their predecessors ruled the USA for much of the time of the Continental Congress (1774 to 1781) and the Congress of the Confederation (1781 to 1789) which preceded the current Constitution of the United States (March 04, 1789). The colonial government of the 13 colonies which became the USA on July 04, 1776 can trace their history in North America to the settlement of Jamestown, Virginia in 1607. The largest number of American Presidents (8 in total) came from Virginia including George Washington, Thomas Jefferson, James Madison, James Monroe, William Henry Harrison, Zachary Taylor, John Tyler and Woodrow Wilson. 7 Presidents came from Ohio, 5 from New York, 4 from Massachusetts and two each came from North Carolina, Pennsylvania, Texas and Vermont.
Political loyalties and party affiliation go much deeper than national politics. Generational loyalties are more often than not formed on the State, local (County and City) and on even more local levels where people vote on issues related to school districts, police, fire, libraries, hospitals, judges and public infrastructure.
I chose this interesting subject for my first monthly blog of 2026 because there appears to be a major generational shift in process. This can be seen in the “small” midterm elections of late 2025 which nevertheless encompassed more than 57,000 races across America and in which the Democratic Party “flipped” 21 percent of GOP held seats to themselves due to shifting popular opinion. The shift in the popular vote in Miami, Florida’s mayoral election is massive. The GOP won 85.81 percent of the popular vote as recently as 2017 and they won just 40.54 percent in December 2025. Furthermore, the incoming mayor will be Miami’s first female mayor. She is not a Cuban-American – she was born in Dayton, Ohio and was raised in Albuquerque, New Mexico. The shift in the popular vote in 8 years is a massive 45.27 points away from the Republican Party. This comes upon the heels of the election for Tennessee’s district 7 for the US House of Representatives. The district includes part of suburban Nashville, TN in what was considered to be a “deep red” state. The GOP won just 53.9 percent of the popular vote in December 2025 which is down from 72.2 percent in 2016 – a net loss of 18.3 percentage points.
The Republican Party has been in the driver’s seat especially on the State and local levels of government across America due to the long coattails of Ronald Reagan going back to 1980. Before this the Democratic Party had been the majority party going back to the midterm election of 1930 in the midst of the Great Depression (Wall Street stock market crash of October 1929). The GOP had been in the driver’s seat for much of the period in between the American Civil War (1861 to 1865) and the Great Depression – one short exception was the time period when America entered the First World War on the side of the western Allies in 1917.
The modern day Democratic Party and its direct historical predecessors had been in the majority for much of the time since the election of 1800 (when Thomas Jefferson defeated the incumbent John Adams) and the start of the American Civil War in 1861.
George Washington and John Adams belonged to the Federalist Party, a predecessor of the much later Whig Party and ultimately the new Republican Party of John Frémont and Abraham Lincoln.
Trends have already appeared in public opinion polling for both the midterm election of 2026 and for the US Presidential election of 2028. With respect to the US Presidential election of 2028 the names which stand out on each respective side are those of Gavin Newsom (current Governor of the State of California) on the Democratic side and J.D. Vance on the Republican side with Gavin Newsom already having a lead of more than 7 percentage points in the general nationwide election – polling statistics going back to late 2024. Gavin Newsom is in his second term as Governor of the State of California and Proposition 50 which he backed in response to what is being attempted in Congressional redistricting in the State of Texas (Republican Governor Greg Abbott) won by a margin of 64.4 to 35.6 percent in California winning in all large metropolitan areas (Los Angeles, San Francisco-San Jose Bay Area, San Diego and Sacramento), almost all coastal counties and even in a good number of the inland counties in the southern and central parts of the state. The GOP had lopsided majorities only in the very remote and rural counties in the northeastern part of California largely bordering rural parts of Nevada and Oregon.
