The Republican convention and much of the campaign was a picture of a very dark, dangerous and struggling America. So, what happens when America is not actually in that bad a shape....
The FT outlined Donald Trump’s economic inheritance in 7 charts: "Donald Trump will enter the White House presiding over one of the stronger US economies any president has inherited in recent history." One can quibble over various stats, for example the unemployment rate, but I expect in general terms this will always be seen as a robust set of numbers at the start of his Presidency.
Meanwhile the stock market has embraced the election with joy. As a sharp observer of market trends noted, "What’s happened in the broad market is a honeymoon before the wedding. The incoming Trump administration has sparked an investing surge betting on a catalyst – exactly the way Activist investors affect individual stocks. Fundamentals cease to matter. Supply and demand constraints go out the window. A fervor takes hold." (Verve and Sand - ModernIR)
Now, there are clearly opportunities for Trump and the Republican Congress to remove unnecessary bureaucracy, steer investment to the right places and perhaps even sustain a higher than average growth rate. But in a world of absolutist post truth rhetoric, the chances of making those cuts and investments in the right places vs the wrong places is probably lower than average.
Telling individual businesses how to best optimize their supply chains by avoiding Mexico and China is definitely not the right way to do it. Addressing the harder questions of education and re-education towards a modern workforce sounds like something too complicated to tweet about.
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