In the wee hours of Nov. 9, Americans realized they had elected Donald Trump. Yet the sun still rose that morning. One month later, the catastrophes that had been predicted have not occurred (yet), but that doesn’t mean things are looking up for the president-elect.
This blog’s regular readers already know that during the campaign, I was not very optimistic about the political, economic or social prospects of the United States if Donald Trump won the election. They also know – and a number of them often tactfully and gently remind me in the comments section of this blog – that I believed a Trump victory would be improbable, if not impossible. For reasons that will take time to understand, Trump won in spite of everything.
He won, and yet life goes on. As they should, those in official positions and most large media outlets are treating the president-elect like any other elected president. They’re normalizing Donald Trump even though his campaign was anything but normal and violated just about every norm in American politics. We must accept that he won. Despite what people said at the height of the campaign, Trump’s victory does not (yet) mean the end of the world is upon us, but it doesn’t necessarily mean things are going well.
The Stock Markets Soar
The first sign Trump’s victory hasn’t brought about the end of the world: U.S. stock markets didn’t plunge like some people expected. At certain points during the campaign, Trump’s gains led to temporary dips in the stock market, making some say that investors were averse to the uncertainty that comes with a highly unpredictable man like Donald Trump. In the hours that followed the announcement of his victory, Asian and European markets went down, but U.S. markets reacted positively to his victory, which was accompanied by a comfortable majority in Congress.
A few weeks after Trump was elected, markets rose noticeably, demonstrating a certain optimism. Among other factors, this optimism was fuelled by huge tax breaks for the one percent, giving them considerable sums to invest, and Trump’s promise to loosen financial regulations, which should boost markets in the short term.
But the U.S. economy is nearly running at full capacity, and an interest rate increase in 2017 would likely temper the markets. Additionally, it’s far from certain that the recent market growth will be sustained in the long term. After all, the Dow Jones Index reacted rather negatively to Barack Obama’s 2008 election, but that didn’t stop it from growing an astounding 150 percent during Obama’s two terms. Markets warmly welcomed Herbert Hoover’s election in November 1928, and we all know what happened less than a year later.
A Few Good Deals Aren’t an Economic Policy
One of Donald Trump’s political successes in this transitional period has been the promise he got out of the CEO of United Technologies. Trump convinced the CEO to keep a Carrier factory in Indianapolis open by greasing his palm with $7 million in subsidies from Indiana taxpayers, courtesy of the state governor, who will soon be vice president. Convenient. We don’t know the details, but the best hypothesis is that Donald Trump may have gently twisted the arm of said CEO by reminding him of the billions worth of military contracts he could lose if he didn’t do a little favor for the president-elect. About 800 jobs were saved in Indiana, and Trump gave himself a great photo op with Rust Belt workers weakened by the effects of market globalization and relocations.
But this kind of case-by-case approach can’t be the basis of a viable economic policy. Of course, some companies will give in and offer Trump more chances to claim victory, but these will be isolated cases. Manufacturing jobs will continue to be relocated to countries with low labor costs.
These kinds of initiatives can also have negative consequences. For example, some manufacturers considering relocation might also ask for preferential treatment, which some governments may not be able to afford. Threats of reprisals against companies that relocate are at the center of Trump’s industrial policy—these threats could make companies avoid building manufacturing plants in the United States for fear of being unable to close them if they become unprofitable.
Even though Trump’s protectionism has been well received by the working class, the rest of the economic policies of the highly conservative Republican Congress could be a hard sell. Several members of the future cabinet are staunchly anti-union. Not to mention a Supreme Court destined to become much more receptive to tipping the scales of the justice system in favor of employers and against workers.
Public Opinion Is Still Against Donald Trump
Traditionally, presidents have a grace period in U.S. political opinion immediately after the election and in the months that follow their inauguration. Donald Trump has already started on the wrong foot. On Nov. 8, the day of the election, RealClearPolitics.com’s average of surveys indicated that 38 percent of Americans held a favorable opinion of the man they would elect, while 58 percent said the opposite. Today (Dec. 9), public opinion has barely improved (41 percent favorable, 54 percent unfavorable). By comparison, on the same date (Dec. 8) after Barack Obama’s first election in 2008, 67 percent of respondents had a favorable opinion of him, while 23 percent felt unfavorably. After every election since 1988, the Pew Center has polled Americans and asked them to grade each candidate on how they behaved during the campaign. Every previous winner received A’s or B’s from over 50 percent of respondents, but Trump received only 30 percent.
Similarly, since the election, few Americans are optimistic about the future of the country. On Nov. 8, according to RealClearPolitics’ index, 62 percent of respondents believed the country was on the “wrong track” and only 31 percent were optimistic. A month later, at 59 percent and 31 percent, those numbers have barely changed.
In short, Donald Trump has a steep hill to climb in the polls to overcome the largely negative impression his campaign left on voters from both parties. Trump’s election doesn’t mean it’s the end of the world, but he has a lot of work to do to quell the worries of the majority of his fellow citizens—not to mention those of this skeptical blogger.
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