Analyzing ‘The Trump Phenomenon’ and Its Influence on the American Economy

The curtain has finally fallen on an American election that tautened the nerves of the entire world. This was a hair-raising election, perhaps the most important in the history of the United States; there were even people who thought it was a revolution in defense of the American Constitution. Perhaps the entire world’s elite felt strongly that this election was a mishap, unable for a very long time to face its “bizarre” result. But if one stays in the U.S. for a long time and understands the realistic situation of the American people, it is not hard to understand why Trump and the Republican Party obtained a hard-to-believe victory in this election. The evening of the day before the election, the media asked for my opinion. I told them there was a good chance Trump would win, and that just like Brexit, the election might go against the expectations of many people (as an aside, I also correctly predicted that the United Kingdom would withdraw from the European Union – at the time, I was participating in a forum in Shenzhen).

Surveying the entire process, this election had several distinctive characteristics: First, it was an intense battle between America’s middle class (“the silent majority”) and its elite and special interest groups as well as society’s underprivileged ethnic minorities. Trump, who has no experience engaging in politics, represented the grassroots interests of America’s vast number of middle-class and white people. He had to face not only Hillary, an old hand in political circles, and the entire Democratic Party (including the current president), but also a mainstream media as well as a very large number of pro-establishment Republicans who discredited him almost entirely without reservation.

Rather than saying Trump is ingenious, it would be better to say that it was everything the Obama government did in the past eight years that made the American people extremely dispirited, consequently making them switch sides. Policies that Obama and the Democrats proposed such as legalizing same-sex marriage, legalizing marijuana, men and women using the same bathroom, letting a good number of Muslims enter the country, legalizing illegal immigrants, the AHEAD Act,* affirmative action (a policy which provides that colleges, universities and companies must take people’s race into account in their admission processes and even limit acceptance of people of Asian lineage with excellent grades, whites, and so on) as well as increasing taxes to support the segment of the population that does not work yet is the main consumer of welfare, all seriously threatened the interests of the middle class. In addition, Hillary’s email scandal and much corruption behind the scenes in the Clinton Foundation deeply worried people. Consequently “the silent majority” no longer chose silence, but rather rose to resistance. Although Trump also has a few obvious blemishes, compared with the harm of the Democratic Party, one could say he was the “lesser of two evils,” and furthermore his views exactly reflected the feelings of “the silent majority”; consequently, his flaws did not affect his becoming a spokesman for the middle class. People believed that as an outsider to government, he would truly confront special interest groups and remedy government corruption.

Secondly, this election was also a showdown between internet news media and traditional media. In this election, new and developing internet media displayed an influence it had never had before. Although mainstream media attacked Trump almost entirely without reservation and supported Hillary, and furthermore, opinion polls before the election also mostly indicated that Hillary would win, the situation for a lot of social media was totally different. Every day on Facebook and WeChat, a good deal of the texts, videos, and pictures were transmitted supporting the preferred candidate of the sender. A lot of negative news about the Democrats and Hillary (including WikiLeaks’ divulging of the emails, pictures, and so on of Hillary and her aides) was disseminated in large amounts, although most mainstream media seemingly considered this internet news dubious at best. Social media had the advantage of speed, easy dissemination and interactive quality, which were vividly and incisively brought into play, making mainstream media, which seemed to be seriously out of touch with reality, feel inferior in comparison. Many people believe that the CEO of Facebook suddenly switched to supporting Trump before the election because he analyzed Facebook’s big data and promptly altered his views to fit the trend of the time. This could not be done with the one-way communication of traditional media. Now, many mainstream media outlets, including CNN, The New York Times and so on, are reflecting on how to once more win the people’s trust.

Third, in terms of spirituality, this was a huge collision between traditional Christian values and those of secular liberalism. The United States has traditionally been a Christian country. According to surveys, currently about 75 percent of the population still self-identifies as Christian, but this has dropped roughly 5 percent in comparison to 2008 when Obama took the stage. The legalization of same-sex marriage, the bill allowing men and women to use the same bathroom that was forcibly carried out despite the opposition of a good deal of the middle class, the oppression of Christian belief, support for abortion, policies drawing masses of Muslim immigrants to the U.S. and other such policies which the Democratic government supported in the name of so-called “political correctness” came into intense conflict with traditional American values. In the context of much upheaval and unrest concerning illegal immigrants and terrorist activities in many countries in Europe, most evangelical Christians in the U.S. sensed an unprecedented crisis; consequently, they resolutely entered into supporting the Republican ranks, whose values and policies were closest to theirs. Thus, the involvement of a good many Christians in the Republican victory on this occasion cannot be left unrecognized.

Fourth, another important phenomenon was the unprecedented level of participation of people of Chinese lineage, both American and foreign born. Because most Chinese Americans are also middle class, they also abhorred many of the Democratic Party’s methods in the past few years. Thus, one after another they entered the ranks supporting the Republican Party. They had a strong sense of calling to save the country from the midst of disaster. Chinese people, who had once been called “mute Americans,” contrary to their usual shyness energetically took action, using every kind of method to canvass for the Republican Party; for example, making phone calls, knocking on doors, donating money to rent billboards, renting planes to swing over states in the air pulling distinguished Trump banners, and so on. On the day of the election, many Chinese-Americans and Chinese-born American citizens who were normally indifferent to politics came out to vote. This was unheard of in the United States.

Although the number of Chinese people is small, they have already grown into a strength that cannot be overlooked in American political circles. After the election ended, Trump himself gave a speech thanking Chinese people. He said that the Chinese and the Republican Party have many similar values: “Work hard, educate sons and daughters to energetically strive upward, don’t drink excessively, don’t do drugs, get good grades in school, make your parents and your grandparents proud, and leave behind a lasting legacy for later generations.” **

Now that Trump has won the United States presidential election, what kind of influence will he have on the American economy? In his speech at Gettysburg on Oct. 22 in which Trump listed the new policies he would carry out in his first 100 days of office as part of his “100-day action plan,” he rudimentarily sketched out some of his blueprints for the economy. Of these the most important points were his plan for reducing taxes and his plan for investment in infrastructure. This was based on his proposed bill on reduction and simplification of middle-class taxation.

The middle class would receive the greatest reduction: A middle-class two-family household would receive a 35 percent tax reduction. The current seven categories of income tax brackets would also be reduced to only three categories, and tax forms would also accordingly become more simplified. Business tax rates would be reduced from 35 percent to 15 percent. He will also tax cash held overseas by companies at 10 percent, which is expected to encourage an estimated trillions of dollars in American corporations’ overseas cash to flow back into the United States. This is an economic plan whose aim is to cause gross domestic product growth to reach 4 percent and produce 25 million new jobs by means of the reduction and simplification of tax laws. At the same time, this forms a complete package with trade reform, an act that would relax regulations and ease up on the limits on American energy sources and such.

Another rather attractive bill to pay attention to is the United States energy sources and capital construction bill, which aims to create competition between joint state-private ownership investing and private investing through tax incentives, thereby initiating a process of constructing $1 trillion in capital investing over 10 years. In addition, he wants to expand business and technical education and make two-year and four-year colleges and universities less expensive. I believe that as a president who is also a businessman, Trump will be fairly pragmatic and will focus even more on domestic economic development while not expanding overseas; this is all extremely advantageous to the long-term economic growth of the United States. It seems that Wall Street has very quickly come to understand this. On the day of the election, although the stock market shockingly declined in the early morning, by the afternoon it had largely rebounded, and finally hugely increased by 257 points (close to 1.5 percent). Stocks continued to grow over the next few days, reaching their highest point in history.

In addition to economic policy, Trump pledges to reform the Washington bureaucracy, for instance by imposing term limits on Congressmen, instituting a government-wide personnel hiring freeze, and adding limits to the lobbying activities of White House officials after they retire. He also will announce to the government his process of open hiring for close to 4,000 positions at the levels of assistant directors and up, and additionally says he will not accept the presidential salary. His sons and daughters say they will not work in the new government. All of this creates a completely new impression of Trump. Many people think the reason he can do all of this is because he is a successful businessman and did not need to rely on political donations to compete, and also consequently does not need to have too many misgivings about being able to carry out his reforms. As for whether these promises will be realized, people will have to wait and see.

Naturally what everybody is worried about now is that Trump’s trade protectionism policies might adopt some measures affecting China. Although Trump quite possibly will carry out some hard measures aimed at China, according to the analysis of Trump’s consultant Wilbur Ross, the likelihood of a full-scale trade war erupting between the U.S. and China is not great. The premise that Chinese exported products will be subject to high tariffs suggests that the value of the renminbi is seriously underrated, but recently the International Monetary Fund has said that the valuation of the renminbi is reasonable. On the basis of the increasing growth of mutual investment (this year China has already invested $300 trillion into the U.S., and the total sum is more than $640 trillion) and economic dependency, the two countries will definitely adopt a reasonable approach.

Although Trump and the Republican Party have already obtained a historic victory, the path of the president going forward is not smooth. Conflicts within the U.S. among different economic classes and races have already reached an extraordinarily intense degree; the protest marches after the election, even in some cases leading to violent incidents, embody this conflict. How to bridge this increasingly torn society, reduce its huge deficit, and maintain the United States’ increasingly downhill competitiveness are all huge challenges that the new president faces. I believe that the new government Trump will lead will be able, with effort, to overcome every difficulty, and to create anew the glory of the United States. After all, a peaceful and prospering United States is the good fortune of the entire world.

*Editor’s note: AHEAD is an acronym for the AHEAD Act or Accounting for Health and Education in the API (California Asian Pacific Islander) Demographic.

**Editor’s note: Although accurately translated, this quote could not be independently verified.