The Trump campaign tapped into the same rich seam of dissatisfaction seen in Greece, Spain, and Portugal. The same tide of discontent was manifest much closer to home in the EU Referendum Brexit vote.
Donald Trump has been swept into the White House, not by promises to build Mexican walls, bear down on Muslims, or through the creation of fortress America with a keep out sign over the front door. The big swing factor was disenchantment with the status quo.
Slow growth, super-low inflation, ultra-low interest rates, public spending pressures, and lack of earnings growth are all driving voter dissatisfaction. People feel worse off, and no longer trust the political classes assurances of ‘we’ll make it better’.
Watch out for elections in the Netherlands, France and Germany in the spring and autumn of 2017. Populist gains will drive political change. Hollande, with 4% approval ratings, is certain to go and Angela Merkel may suffer as a result of her accommodating immigration policy.
What does the election result mean for the US?
Trump’s acceptance speech was more conciliatory than might have been expected. He praised Hillary Clinton in stark contrast to the campaign trail condemnations. He talked of defending America’s interests but working fairly with other nations. He also promised a doubling of economic growth.
Despite controlling all branches of government, the Republicans are not united. Trump will get some tax cuts through but they will have to be funded; he will dismantle Obama care but will need to propose alternative policies.
On foreign policy he may close the divide with Russia and, whilst new international trade agreements are dead in the water, he is most unlikely to roll back existing arrangements and leave the WTO. Less cash for NATO will make waves but probably not much more.
Initial wobbles in the markets are almost over and a more competitive peso may go some way to healing the potential rift with Mexico. With stabilising markets an interest rate rise in the US may still be possible in December, beginning an overdue weaning off easy money, snuffing out nascent inflation and signalling an important step toward monetary orthodoxy.
Governing will certainly prove more difficult than campaigning. Slogans will not fix America’s deteriorating demographics, its crumbling infrastructure, or its public private debt mountain, currently $93,800 for every man woman and child.
Trump has promised abundantly, and almost certainly beyond anything he can realistically deliver. Trouble is sure to come when the voters realise their lives are not going to quickly change for the better, but for now he will bask in the glory of an historic victory.
What does all this mean for Jersey?
The election uncertainty is over, investor confidence should quickly recover, and Jersey’s safe harbour attractions – our stability, world-beating expertise, sound regulation, and our ability to quickly adapt and innovate – will continue to attract high quality business and businesses to Jersey.