The Great Recession Blog
by David Haggith
They awakened the sleeping giant, the great middle class of America. On this historic night, the average citizens of the United States roared and joined Brexit in voting against globalism and in favor of nationalism. To empower Trump, the middle class also handed him a completely Republican-controlled congress.
They tore down President Barrack Obama’s legacy. Obamacare will be repealed. The Iran nuclear agreement, which was established only by executive order, can be easily ended by executive order. Numerous legacy achievements that Obama thought he could do unilaterally by executive order can now all be undone in a day. (Though I’m sure Trump will give them much more careful thought that that, but such are the possibilities when you ignore the people’s house and act on your own.)
For liberals and globalists, for the establishment on Wall Street, the world is a different place at the end of the day than it was at the dawn. Many liberals scoffed derisively at the notion that Trump could win. Democratic talking heads like Alan Colmes brazenly told Trump supporters to call him after the election because Hillary was going to win for certain, and they could eat their words; but Trump destroyed the Democratic establishment, giving the entire GOP a victory that even the GOP didn’t believe was coming its way. It wound up being a good thing for them that Trump was on their side.
Establishment Republicans and Democrats alike failed to perceive the rage of the forgotten middle class as certainly as they failed to see the Great Recession coming. This was not a vote for the man. It was a vote for revolution. Many of the swing voters who proved essential to Trump’s victory could barely stomach voting for Trump because of his arrogance, his trickle-down tax plan, his often expressed attitudes to women, the fact that he is the one percent and always has been. I’m not saying most Trump supporters had those concerns about Trump. Not at all, but the swing voters who made this victory possible in polls that were tight in much of the country. The one thing they all saw in Trump is that he was their only hope for a candidate who could grab the establishment by the shoulders and shake it up.
It is the people who were concerned that Trump is too much of a loose cannon and to reckless in speech who did have those concerns who came out of the closet and voted for him at the last moment — supporters in the end the even the Trump campaign didn’t know about. And it is those voters that I’ve been saying are the likely hidden voters that pollsters were not seeing — people who were not willing to say to anyone they would vote for Trump because there was so much they disliked about him, but who would vote for him at the end of the day because they are so thoroughly disgusted with the establishment. These sleeper votes turned a questionable win into a strong win.
Whether their hope will be well invested, I don’t know. I certainly hope it will. Trump has so far, picked purely establishment people to be his team (Larry Kudlow and Stephen Moore for his tax team, a Goldman Sachs VP as his likely Treasurer, and Pence and his VP), but he hasn’t chosen many yet, so I can hope that doesn’t represent the course he will take. Or maybe he has some miraculous ability to work with the establishment in order to change it, rather than throw it out. I don’t know.
If you look at a map of all county’s, colored by which candidate that county voted for, the Unites States is a sea of red, even greater than Reagan had. If you look at the popular vote, it was a thin victory of only about 1.5%.
I can hope the sea of red thatTrump received in support and the knowledge that it was not catering to those establishment leaders and advisors that got him to victory but those millions of Middle Class voters looking to him in hope … I can hope that even humbles the great Trump and crystalizes in his mind that he has been chosen to work for the Middle Class. I think the magnitude of this election could very well do that, and his victory speech showed a man who appeared humbled by the victory — a good thing to see in someone who has spent most of his life telling the world how phenomenally great he is.
Trump also would never have won, except that Hillary was so horrible that numerous Democrats couldn’t stand voting for her. She may hold the record for being the candidate most disliked by her own people. Even her campaign managers wrote about her “unlikability factor.” She was a hard-fighting opponent, but she had to be because she came with so many liabilities.
Stock market dive is certain
The stock market will nosedive in the morning. Futures in the market show that, so it’s not a hard economic prediction to make. There is, in fact, no surprise in that for anyone, as nearly everyone has said it will happen; but will this be the cataclysmic crash I’ve predicted, or will it be like Brexit where the market plunged in shock for a few days and then found its balance?
The stock market was a rickety scaffolding built up to the clouds anyway. So, it was certain to fall soon, regardless of who won. However, a Trump win assured it will drop immediately because Trump’s victory strikes fear in the hearts of Wall Street that his gracious victory speech is not likely to overcome.
The market had priced itself for a Hillary win, particularly in the past two days after Comey backed out of investigating Hillary a second time. So, now it has to correct itself. The problem is that, if it really corrects itself, it has a lot of correcting to do. I can’t say if it will turn out to be like the the Brexit plunge — a brief release of shock realigning to a new reality — or the crash I’ve been predicting for this year.
My conviction has been that the Federal Reserve and others will just let it fall so they can blame the failure of their false recovery on Trump. I’m not sure they will even have a choice , as the market may gain enough momentum when it starts falling that it cannot stop. The first plunge can contribute business collapses that bring more decline. Global stock markets may fall even harder in fear of what they perceive as isolationism and lack of support for allies like NATO. Whether those perceptions are valid is irrelevant, as the markets rise and fall on perceptions.
I am certain the establishment will not get it. They will blame the market’s fall on Trump, saying it is proof that he’s an economic disaster, rather than on the fact that this market was ready to fall at any moment. That’s why the government and Federal Reserve appeared to be barely able to hold the market up. It flatlined for months, even with a huge increase in government spending and with the Federal Reserve repeatedly holding off on it promised interest increases.
The establishment fear factor
I’ve pointed out several times that Trump’s tax plan is the greatest gift Wall Street, corporations and stockholders have ever seen. Those tax savings could easily make up for the losses corporations fear in Trump’s promised renegotiation on free trade. So what is the Wall Street establishment afraid of?
Change, and lots of it by a loose canon they cannot control
Loss of control over other politicians who gravitate toward Trump’s popularity.
More than anything, the 90%.
If Trump takes this Middle-Class revolution deeply to heart and the Republican Party trembles in fear at the rising of the Middle Class and moves with it, then this night has the power to be a game-changer for the elite. Real power has always rested in the 90% … in the people … if they would wake up and realize they do have the power because they have the numbers to force changes; but until now they didn’t know they had the numbers. I am hoping they have risen to say, “From now on, look out for the Middle Class first … in your tax breaks and everything else you do.”
If Trump disappoints such a high calling, a much bigger and nastier revolt is likely later, as the Middle Class will not take lightly to being fooled by the establishment again. Trump’s tax plan and chosen associates caused me to ask earlier in the season if Trump was just the establishment’s Trojan horse. The plan assures we will continue to dive at the same rate deeper into debt, though such ramped-up debt spending by government will stimulate the economy some in the short term, but it is more of the same thing … on steroids — buying ourselves some comfort and security at someone else’s expense down the road — not paying for what we gain.
I don’t think Trump ever expected a win like this. If he makes himself the champion of the Middle Class and not his own class and his own interests, his presidency could be extraordinary. If, in the end, he focuses on serving Trump, his presidency will be a disastrous loss of hope and rise of rage.
But this is the time when economic denial begins to break. Markets will fall around the world because all globalists have reason to tremble if Trump is the real deal — not because of Trump’s innate power or wisdom but because he has tapped into the rage of the silent majority, and they are silent no longer. He has catalyzed them, and that means he has their power behind him if he rises to the call. If he truly focuses on empowering that electorate, they will empower him, and he can change the nation even more than Reagan did. But he has to rise to that.
Hell Week still on the calendar
At least as strong possibility. Globalists don’t just give up on half a century or more of scheming. Those in power don’t hand it over. There is much opportunity here for the establishment to make Trump the scapegoat for their own failure for weeks and months to come because most people do not believe economic collapse is imminent as I do (and as I suspect most of my readers do, though I can’t speak for others).
Many people don’t think things will certainly fall apart now economically. That makes the clear economic problems that rise from this point forward easy to blame on Trump because a sleepwalking populace has believed the recovery illusion. While consumer confidence has been falling of late, the number of people who believe the economy was doing OK was greater than the minority like readers of this blog who highly doubted that it was.
Trump gave a heartfelt and gracious victory message to calm people by helping them believe a sharply divided nation can be healed; but I am concerned the fears and wounds from a divisive and campaign and the ideological differences mean that a second miracle is needed in one night for divisiveness to end, and two miracles in one night are a lot to hope for.
In the remainder of the week, I wonder if the outcome of the election will be challenged by Clinton. So far, it looks like it won’t. There could be recounts. Then arguments over the recounts. There could be charges by the Hillary campaign of election fraud and maybe a Supreme Court challenge like we saw with Al Gore. As Podesta said at the end of the Hillary party, “We’ll have more to say tomorrow.” That sounded to me like the fight was still on; but then Hillary called Trump to graciously concede. That gives a little hope for healing.
You see, while the Trumpettes are blowing their horns in celebration (and I’m glad they are and just hope they get what they are hoping for), almost half of the population is completely disillusioned tonight. To their way of thinking, the United States is filled with fools who elected a clown as president. They are in shock at a world that they think has gone mad. I don’t think we’ve ever had an election where half the populace so hated a president, other than when Obama was elected and the other half hated the president.
I hope we can stand our grand in insisting everyone focus on rebuilding the Middle Class, as being essential to everyone’s good, for without a Middle Class there is no market for the wealthy. This may, however, be an impossible divide to bridge. Remember, in terms of the popular vote, almost half of all those who voted supported Hillary. Most have been quite passionate in their support. They see a world they believe chose Trump out of racial hatred (and perception is reality with that kind of thing), and his way of saying things tends to be easily perceived in the worst way as people listen with their fears and their prejudices.
So, can Trump be enough of a true uniter to get his needed legislation passed without caving in to the establishment. Can you put Hillary in jail and not crystalize the ire of her supporters? It doesn’t seem possible.
Paul Ryan may lose his leadership over the House for his rejection of Trump, followed by support that may have been too late to save his hide. I expect Democrats to demand FBI Director Comey’s head, and I can’t image Trump will give Comey a lot of support, given his last-minute repeat capitulation to Clinton. Trump has reputation of getting even. Expect to see the Justice Department turned inside out. Expect to see a shake-up at the Federal Reserve. If he’s going to be what he’s said he will be, there are many things to take apart, and it’s hard to believe that can be done without stirring up a lot of wrath.
Last night we had a shooting with one killing and three wounded at a polling station in Azusa, California. Let’s hope it’s a one-off.
I hope I’ll be wrong about Hell Week. The size of Trump’s victor give me some hope. If it were a tiny or indecisive victory, I’m certain all Hell would break loose, fighting for the scraps of territory that remained; but the victory may be strong enough that it’s hard to contend, and Trumps speech was a step in the right direction.