Grasping Reality on TypePad, by Brad DeLong

Now that Mr. Trump has been elected president, the Berlusconi parallel could offer an important lesson in how to avoid transforming a razor-thin victory into a two-decade affair. If you think presidential term limits and Mr. Trump’s age could save the country from that fate, think again. His tenure could easily turn into a Trump dynasty.

Mr. Berlusconi was able to govern Italy for as long as he did mostly thanks to the incompetence of his opposition. It was so rabidly obsessed with his personality that any substantive political debate disappeared; it focused only on personal attacks, the effect of which was to increase Mr. Berlusconi’s popularity. His secret was an ability to set off a Pavlovian reaction among his leftist opponents, which engendered instantaneous sympathy in most moderate voters. Mr. Trump is no different.

We saw this dynamic during the presidential campaign. Hillary Clinton was so focused on explaining how bad Mr. Trump was that she too often didn’t promote her own ideas, to make the positive case for voting for her. The news media was so intent on ridiculing Mr. Trump’s behavior that it ended up providing him with free advertising.

Unfortunately, the dynamic has not ended with the election. Shortly after Mr. Trump gave his acceptance speech, protests sprang up all over America. What are these people protesting against? Whether we like it or not, Mr. Trump won legitimately. Denying that only feeds the perception that there are “legitimate” candidates and “illegitimate” ones, and a small elite decides which is which. If that’s true, elections are just a beauty contest among candidates blessed by the Guardian Council of clerics, just like in Iran.

These protests are also counterproductive. There will be plenty of reasons to complain during the Trump presidency, when really awful decisions are made. Why complain now, when no decision has been made? It delegitimizes the future protests and exposes the bias of the opposition.

Even the petition calling for members of the Electoral College to violate their mandate and not vote for Mr. Trump could play into the president-elect’s hands. This idea is misguided. What ground would we then have to stand on when Mr. Trump tricks the system to obtain what he wants?

The Italian experience provides a blueprint for how to defeat Mr. Trump. Only two men in Italy have won an electoral competition against Mr. Berlusconi: Romano Prodi and the current prime minister, Matteo Renzi (albeit only in a 2014 European election). Both of them treated Mr. Berlusconi as an ordinary opponent. They focused on the issues, not on his character. In different ways, both of them are seen as outsiders, not as members of what in Italy is defined as the political caste.

The Democratic Party should learn this lesson. It should not do as the Republicans did after President Obama was elected. Their preconceived opposition to any of his initiatives poisoned the Washington well, fueling the anti-establishment reaction (even if it was a successful electoral strategy for the party). There are plenty of Trump proposals that Democrats can agree with, like new infrastructure investments. Most Democrats, including politicians like Mrs. Clinton and Bernie Sanders and economists like Lawrence Summers and Paul Krugman, have pushed the idea of infrastructure as a way to increase demand and to expand employment among non-college-educated workers. Some details might be different from a Republican plan, but it will add credibility to the Democratic opposition if it tries to find the points in common, not just differences.

And an opposition focused on personality would crown Mr. Trump as the people’s leader of the fight against the Washington caste. It would also weaken the opposition voice on the issues, where it is important to conduct a battle of principles.

Democrats should also offer Mr. Trump help against the Republican establishment, an offer that would reveal whether his populism is empty language or a real position. For example, with Mr. Trump’s encouragement, the Republican platform called for reinstating the Glass-Steagall Act, which would separate investment and commercial banking. The Democrats should declare their support of this separation, a policy that many Republicans oppose. The last thing they should want is for Mr. Trump to use the Republican establishment as a fig leaf for his own failure, dumping on it the responsibility for blocking the popular reforms that he promised during the campaign and probably never intended to pass. That will only enlarge his image as a hero of the people shackled by the elites.

Finally, the Democratic Party should also find a credible candidate among young leaders, one outside the party’s Brahmins. The news that Chelsea Clinton is considering running for office is the worst possible. If the Democratic Party is turning into a monarchy, how can it fight the autocratic tendencies in Mr. Trump?

Luigi Zingales: [Dodging the Trump Bullet][]: "Donald Trump’s announcement that he will not run in the Republican presidential primaries after all is great news for the Republican Party and for the country...

...The only thing more frightening than Trump’s running for president would be Trump’s getting elected president. From a party perspective, while losing an election is bad, winning one with the wrong candidate for the party and for the country is worse. I know something about this: I come from Italy, a country that has elected as prime minister the Trumplike Silvio Berlusconi.

Trump and Berlusconi are remarkably alike. They are both billionaire businessmen who claim that the government should be run like a business. They are both gifted salesmen, able to appeal to the emotions of their fellow citizens. They are both obsessed with their looks, with their hair (or what remains of it), and with sexy women. Their gross manners make them popular, perhaps because people think that if these guys could become billionaires, anyone could. Most important is that both Trump and Berlusconi made their initial fortunes in real estate, an industry where connections and corruption often matter as much as, or more than, talent and hard work. Indeed, while both pretend to stand for free markets, what they really believe in is what most of us would label crony capitalism.

Berlusconi’s policies have been devastating to Italy. He has been prime minister for eight of the last ten years, during which time the Italian per-capita GDP has dropped 4 percent, the debt-to-GDP ratio has increased from 109 percent to 120 percent, and taxes have increased from 41.2 percent to 43.4 percent. Italy’s score in the Heritage Foundation’s Index of Economic Freedom has dropped from 63 to 60.3, and in the World Economic Forum Index of Competitiveness from 4.9 to 4.37.

Berlusconi’s tenure has also been devastating for free-market ideas, which now are identified with corruption.

How can such a pro-business prime minister wreak havoc on the economy and on the idea of free markets? Because “pro-business” doesn’t necessarily mean “pro-market.” While the two agendas sometimes coincide—as in the case of protecting property rights—they’re often at odds. Market competition threatens established firms, which often use their political muscle to restrict new entries into their industry, strengthening their positions but putting customers at a disadvantage. A pro-market strategy, by contrast, aims to encourage the best business conditions for everyone. That’s in fact the opposite of what a real-estate tycoon wants: to keep competitors out and enhance the value of his own properties. By capturing (or more precisely, purchasing) the free-market flag in the same way one might acquire a business brand, Berlusconi likely has destroyed the appeal of the free-market ideal in Italy for a generation.

How, then, did Berlusconi get elected and reelected? He created an unlikely coalition between the business elite, which supports him for fear of the alternative, and the poor, who identify with him because he appeals to their aspirations. In a country where corruption and lack of meritocracy has all but killed the hope of intra-generational mobility, citizens chose to escape from reality and find consolation in dreams. Berlusconi adeptly fosters the illusion that he can turn everyone else into billionaires. His political career is something like Trump’s Apprentice program, only on a national scale.

Unfortunately, some of the same factors that sparked Berlusconi’s success in Italy have begun to show up in the United States. Social mobility has dropped. Income for 95 percent of the population has stagnated. The financial crisis has uncovered a dangerous connection between government and the financial establishment. Losing hope that they can rise from rags to riches the old-fashioned way, Americans are taking refuge in fantasy, from American Idol to The Apprentice. In such a climate, Donald Trump, whose own career has exemplified crony capitalism—from government subsidies for his developments to abuse of eminent domain—could have potentially won not just the GOP nomination, but even the presidency. That would have been a catastrophe for the Republican Party, for free-market capitalism, and for America.