(FORTUNE Magazine) – AS THE COUNTRY slouches toward mid-term elections on November 8, U.S. voters remain mired in the same bitter funk that blew away so many incumbents in 1992. If anything, their mood is even surlier, despite a rebounding economy. Everywhere you look, there's no joy in Americaville these days, only anger, self-absorption, increased detachment from political parties, and growing hostility toward almost all established institutions, including -- yes, the folks who brought you all those delightful downsizings in recent years -- big business. In the short term, this anti-Washington anger is probably not focused enough to sweep away longstanding Democratic majorities in the House and Senate. But it is clear that turnover in Congress this year will be huge -- when the dust settles, some 60% of House members will be newcomers elected since 1990 -- and losses for the Democrats, both in Congress and in governorships, will be substantial. Republicans and their allies, who include the vast majority of business leaders, shouldn't be crowing too loudly at that prospect, however. A close look at longer-term trends in public opinion and political values reveals that both parties are in deep trouble. The coalitions from which they have traditionally drawn strength are fraying badly and are unlikely to hold. Key groups of voters in both the GOP and independent columns, for example, now embrace antibusiness attitudes that one would have associated in the past with Democrats and Liberals. The bottom line: the possibility is greater now than in modern memory that a third political force will arise in the years ahead, transcending the two parties and riding not a substantive policy agenda but a hyperpopulist, antipolitical, and even anticorporate wave. Before you dismiss this as yet another airy bit of inside-the-Beltway punditry (confession: I have spent more than 20 years in Washington analyzing Congress, for the past decade as a resident scholar at the American Enterprise Institute), let me explain what that prediction is based on. For weeks I've been sifting through in-depth interviews conducted with more than 3,000 voters from July to September by the Times Mirror Center for the People and the Press. I was a consultant on that survey, which builds on work begun in 1987 when a group of poll takers and academics joined together to attempt to get beyond the traditional classification of voters as simply left or right, Democrat or Republican. Instead, we developed a typology grounded in a close look at Americans' underlying values. What our latest survey starkly reveals is that the historic links between those values and the political parties that purport to reflect them have weakened dramatically. Back in 1987 six of the 11 groups of voters we identified were strongly tied to either the Democratic or the Republican Party, and most of the other five had at least an attraction toward one party. Today only two of the ten groups in our revised typology have truly strong and enduring connections to one of the major parties (see box). Consider the GOP. Among the three groups that constitute the core Republican coalition, only one -- a bunch we call Enterprisers, reflecting their affluent, pro-business, antigovernment cast -- ardently identifies with the party. Moreover, this group is losing ground to a group we call the Moralists, folks who are more middle to lower-middle income and from the middle of the country, and who put more weight on cultural, moral, and religious issues than on economics. In 1987, Enterprisers and Moralists were roughly equal in number. Today, while Enterprisers continue to make up 12% of registered voters, Moralists have jumped from 12% to 20%. That's by far the most striking shift in our survey. Don't think of this group as simply a reflection of the rise of the so- called religious right. Only about half the Moralists identify themselves as evangelicals or born-again Christians. The rest are driven more by their deep concern over topics like pornography and moral decline in schools and the family than by religious fervor. Unlike Enterprisers, Moralists do not identify at all with the elites in American society. They tend to be nationalist, intolerant of homosexuals, and unsympathetic to minorities and immigrants. Most important, they have one key attribute that exacerbates the GOP's difficulties in building a coalition with the Enterprisers: unhappy with the secular trend in society, and the situational ethics on display in a range of institutions, Moralists are almost as hostile to big business as they are to big government. They see companies that constantly lay off workers as part of the problem, not part of the solution, and resent business executives as simply another self-serving elite with cushy lifestyles that reflect neither their values nor their interests. Example: Only 9% of Enterprisers believe corporations make too much profit, but 60% of Moralists do. Among Enterprisers 35% agree with the statement that "Too much power is concentrated in the hands of a few companies," compared with 85% of Moralists. Nor are Moralists automatic foes of that archenemy of the business lobby -- burdensome government regulation. While nearly nine of ten Enterprisers believe that regulators tend to do more harm than good, only half the Moralists feel that way. More than 40% of them deem regulation of business a good thing. Finally, those who put family values and a conservative social agenda first have even less in common with a third group that has its roots in the Reagan revolution of the 1980s -- Libertarians. Accounting for roughly 4% of the electorate, these people are pro-business, antigovernment, and tolerant on cultural and lifestyle issues (they'd be pro-choice on abortion, for example). Where the GOP could once expect to have a lock on their loyalties, their Republican orientation is now tempered by an attraction to Ross Perot. That attraction, in turn, stems both from their distaste for politics as usual and their alienation from the Christian right.

BUT WHILE the Republicans seem to be developing a split personality, Democrats are arguably schizophrenic. Of the four disparate groups of roughly equal size that make up the Democrats' base, only one group, the Partisan Poor, can be considered hard-core party loyalists. These poor older blacks and whites tend to be religious, and conservative on social issues. They believe strongly in government social programs, are critical of business, and remain a bedrock of the party of Walter Mondale and Michael Dukakis. The Democrats' problem is, they represent only 8% of registered voters. The other three groups are far less loyal and have such widely varying values that it is hard to imagine any Democratic leader satisfying them simultaneously. The crowd our survey labels the Seculars (10% of voters) are well educated, relatively affluent, and concentrated on the East and West Coasts. They are not religious, are tolerant on social issues like gay rights and abortion, pro-environment, critical of business, supportive of minorities, and socially conscious -- in short, classic intellectual liberals but without strong partisan ties to the Democratic party. For now, they remain Clinton loyalists. Another group, the New Democrats, fits the profile of the centrist Democratic Leadership Council, which Bill Clinton headed from 1990 to 1991. This 8% slice of the electorate is less critical of business and more skeptical of government than most other Democrats. Middle-aged, middle-income, and middle-brow, they are not particularly sympathetic to the plight of blacks and other minorities and have been among the strongest critics of Clinton's performance in office. The last Democratic group, New Dealers, are older and also religious, but, compared with the Partisan Poor, they are more nationalistic and better off. Also 8% of the electorate, they tend to be white and Southern, live in small towns, and are strongly conservative on social and racial issues (they hate quotas, for instance). Though their ties to the Democrats go back to the New Deal, many of their number had a fling with Reagan and Bush, and some now carry a torch for Ross Perot. Beyond these groups, which at least vaguely identify with either the GOPor the Democrats, a full third of the American population -- and 27% of registered voters -- describe themselves as staunchly independent. While that percentage isn't up sharply from seven years ago, the unattached electorate is now dominated by a new cluster of voters, whom Times Mirror has tabbed the New Economy Independents. Don't confuse this label with the shifts in economic clout and management practices that attend the rise of the information economy, which is what FORTUNE means when it speaks of America's "new economy." A better name for this group, which makes up nearly one-fifth of the electorate, might be Wal- Mart Independents, since that's the kind of place they're likely to shop and work. In general they are a financially pressured and heavily female bunch, with strong concentrations of single parents. More than two in three of them say they have jobs that pay too little. Caught up in a global economy that has forced many of them into unsatisfying jobs with less security and more intense strain on their families, these people are unhappy with the political process and the parties, and conflicted in their values and beliefs. They are strong environmentalists but down on government regulation. They believe in government social welfare programs but are not sympathetic to blacks. They are religious, but moderate on social issues like homosexual rights. Three in ten voted for Ross Perot in 1992. He, and others like him, continue to have real appeal to this group. What's the net effect of these shifting classifications on the cut and thrust of U.S. politics? A few telling statistics: -- Discontent with Washington is at an all-time high. A full 83% of those polled now agree that elected officials in Washington lose touch with the people pretty quickly, compared with 73% in 1987. Only 33% agree that "most elected officials care what people like me think" -- down from 47% seven years ago. --Experience in politics or government increasingly is seen as a liability. In 1987, 44% of Americans believed that "we need new people in Washington even if they are not as effective as experienced politicians." That number is now 60%. --Voters' concern with the woes of the disadvantaged has diminished. In 1987, 71% agreed with the statement that "it is the responsibility of the government to take care of people who can't take care of themselves"; today only 57% do. When white Americans were asked if "we have gone too far in pushing equal rights in this country," for the first time since this series of surveys was launched,a majority -- 51% -- agreed. --Americans are increasingly unhappy about immigrants and immigration. A striking 82% believe we should impose more restrictions than we do now on people coming into the U.S. to live, up from 76% just two years ago. Looking ahead, Republicans can comfort themselves with the knowledge that Americans see them as better organized, better managers of government, and better at coping with foreign policy than the Democrats. But despite big gains in support over the past two decades among men, white Southerners, evangelicals, and Catholics, the GOP is still not viewed by the broader electorate as capable of governing more honestly or ethically than the Democratic party. Meanwhile, Democrats retain a substantial lead in another dimension that has traditionally correlated strongly with success at the ballot box. Their party is seen by 49% of voters as more concerned "with the needs of people like me," vs. 35% for the Republicans. By contrast, a full 66% view the GOP as more "concerned with the needs and interests of business and other powerful groups." So where do we go from here? With public hostility toward the parties and the Establishment, including big business, unlikely to abate, the U.S., I believe, may be entering a long period of partisan instability, with no clear enduring majorities and political control seesawing back and forth from party to party. This struggle, in turn, will spur each side to deploy more negative campaigning and strident rhetoric, and make more attempts to scapegoat the other players in the system. Result: all this furor will play into the hands of people like Ross Perot, Rush Limbaugh, and Jesse Jackson, who have little or no attachment to the two-party system and who push a cynical, populist theme from either the left or the right. And while that's great news for any aspiring leader of a new third party, it's likely to prove very unpleasant news for U.S. business.

BOX: The new political landscape

The divided right Enterprisers: pro-business, antigovernment, affluent (the country club set), true-blue Republicans 12% Moralists: nationalists, social conservatives, lower-middle-income critics of big government and big business 20% Libertarian: pro-business, antigovernment, antipolitician, tolerant on social issues (pro-choice) 4%

The detached center New Economy Independents: antiparty, nonideological, swing voters, financially pressured, Perot's a hero. 19% Embittered: poor, urban, disproportionately black, distrustful of political system and power structure in society 8% Bystanders: just what they sound like: they don't vote, they don't care, and thus to politicians they don't count 0%

The splintered left Secular: tolerant, highly socially concious, environmentalist, under 50, well educated, bicoastal 10% New Democrats: moderate, middle-aged, middle-income, pro-business centrists, shaky ties to Democrats and Clinton 8% New Dealers: older, religious, nationalist, often Southern, conservative on race and social issues 8% Partisan Poor: older, disproportionately black, faithful to the Democratic Party, look to government to solve problems 8%

SOURCE: TIMES MIRROR CENTER FOR THE PEOPLE AND THE PRESS