Donald J Trump is president-elect of the United States of America. For many, this will come as a stunning surprise; Hillary Clinton was expected to squeak out a victory. But this is a reminder — the second this year, after Brexit — that opinion polling is an inexact art, and that shifts in turnout and sympathy in multi-dimensional electorates can easily cause predictions to run aground. As with Brexit, Clinton was an easy favourite in the betting markets — similar odds were offered, in fact. And as with Brexit, the costs of a Trump victory were not priced in by equity markets. We will have to live with that disruption in the medium term; given that Trump’s economic policy is relatively hard to pin down, it is possible that we will have to revisit expectations that the US Federal Reserve would increase interest rates in December, before the next president takes office.
But the real concerns should be structural. The inability to anticipate Trump’s victory is a reminder of the remoteness of those who make financial decisions for the world from a large proportion of their compatriots — and, of course, that this applies to the media as well. Trump swept up the white working class vote across the Rust Belt of America — exactly what he had always promised to do — and thereby destroyed the old Democratic coalition, that relied crucially on this to be competitive in states like Ohio and Iowa, and to win states such as Michigan and Pennsylvania.
This distance is, to some extent, a product of the deep and profound changes to the West’s economies in the past decades. The pay-offs to urbanisation and to the concentration of talent have become so strong in the increasingly post-industrial economies of the West that the dissatisfaction of rural voters, or those in left-behind towns across the American Midwest or the North of England, can easily be minimised. It has not been ignored — reams of newsprint has been expended on it, after all — but it is not recognised as having the political power that it in fact possesses.
The questions to be asked are considerable. Elements of Trump’s economic plans are boilerplate Republican dogma — tax breaks for the very rich, for example. The long-term outcome of other aspects is more difficult to predict. What will come of the US driving a truck through its various trade treaties? If the Paris Agreement is torn up, then what comes of all the big bets that have been taken on green energy? It is not an overstatement that this election is the biggest shock to the world economy since the 2008 crisis.
Yet if we failed to properly anticipate the 2008 crisis because those who should have been guarding against it were too close to what they were supposed to be keeping an eye on, this crisis has come on us unannounced because we are too distant from the real political decision-makers. The march towards greater trade, action against climate change and so on was never inevitable. But it took on the aura of inevitability, and thus the danger of a turn away from the path was never scrutinised.
For India, the implications of this are considerable. We can say goodbye to the possibility of regaining favourable access to US markets for our textiles, for example. It is yet another headwind for a ‘Make in India’ programme that is already struggling to get off the ground. Nor are the implications clear as to what it will mean for the flow of capital — in particular to renewables and “green” sectors, but also to already overpriced stocks in other sectors. As people take a long, hard look at the economic implications of Trump’s various promises, it is entirely possible that risk appetite will sharply decline. India needs global stability and trade to grow. This election takes that away from us.
In the end, the contrast was clear. One candidate represented metropolitan, global values; institutional continuity; and a progressive vision. The other gave voice to a regressive, nativist strain in American politics increasingly rare in America’s cities — at the very least since Richard Nixon’s presidency, more than four decades ago. Because this force seemed so dark, and so absent from the lives of those who subscribe to the notion of institutional continuity and progress, the possibility of a Trump victory was never properly prepared for — intellectually or emotionally.
And because the contrast is so stark, it is impossible to claim that Trump’s victory is anything but what it is: a vote to send the US back to the 1950s at the very least, and perhaps the 1930s. It is telling that the last time America elected a Republican Senate, a Republican House and a Republican to the White House was 1928. That didn’t turn out so well for anyone, the world economy included. It would be deeply foolish to suppose the global economy will not feel the effects of this election for decades to come.
m.s.sharma@gmail.com; Twitter: @mihirssharma
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