The 2016 U.S. presidential election is a circus which will produce an outcome and policies that will tend to fatten labor’s share of the economy while reducing that of capital.

And yes, that means there may be more emphasis not on growing the pie but on how it is divvied up, a factor which might possibly depress longer-term growth and would definitely tend to drive profit margins lower.

Super Tuesday is past and now Democrat Hillary Clinton and Republican Donald Trump look to be on rails to their parties’ nominations.

I am assuming Trump loses in a general election, as betting and polling now indicates. If he wins, I wish you the best of luck with your investments. You will need it.

I won’t spend too much time working through what would happen if his policies, as now laid out, are put in place, because I don’t think it is at all likely they ever will be or even that they answer to the term 'policies'. Suffice to say that we will have volatility during the election season, with risk premia rising to take the Trump factor into account.

Yet Trump’s rise is significant in a way that goes beyond “where have we gone wrong?” soul searching.

Investors shouldn’t so much worry about what President Trump would do, as he likely won’t get a chance, but rather take a hard look at the broader underlying forces which might continue to make themselves felt after his candidacy. And no, I’m not talking about stupidity and folly, though they too won’t fly back to New York with him in Trump Force One when this is all over.

Hillary Clinton is being forced left of her natural position by both her primary opponent, Bernie Sanders, and by Trump in a general election. While of course she will run against Trump’s more outrageous positions on, well, everything, she is smart enough and well advised enough that she will grasp that to win she must appeal to the voters whose economic vulnerability Trump exploits.

Sanders, and Elizabeth Warren, have been successful in pushing Clinton to the left in financial services regulation, and given that this too is undergirt by Main Street’s sense of being cheated by forces beyond its control, it is likely she’ll keep going in this direction as she squares off against Trump.

Stronger financial regulation probably means slightly lower growth in the near term, but with the hope that we face fewer destabilizing booms and busts. Longer term that could actually be good for asset prices, but in the near term it means less leverage and is probably a negative for returns.