Trump cabinet will unleash full brunt of conservatism
The economic phenomenon of the Donald Trump vision for America will certainly provide the screenplay to test the economic theories that have challenged the world for more than a century. The Trump cabinet is an unabashed conservative group of billionaires without even a scent of leftist leanings, supported by a two-house majority where his ideas can easily be transformed into policies.
Whether it is the repeal of the Affordable Care Act (Obamacare), repeal of regulations that affect issues such as environmental development, or reduction of tax for the wealthy and corporations, this administration will unleash the full brunt of conservatism. In spite of most of the world evolving from empires and monarchies, the economies for the vast majority of modern governments such as Europe, Britain and Canada, to name a few, have strong social programmes as conjuncts of their capitalist systems.
They, for example, have free healthcare, strong commitments to public education, public housing and general welfare programmes, all supported by a tax structure. These economies provide the example for leftist arguments in economies such as the United States, Bermuda and many Western jurisdictions, and are vigorously opposed by conservative ideology within these jurisdictions. It will be interesting to observe how things will look four years down the road if the Trump doctrine is allowed to prevail. One thing we can be assured is that the proverbial 1 per cent at the top will be thriving. The big question is whether the middle class expands or contracts, and what happens to those at the bottom at present. Will upward mobility become better or worse?
When all elements of the Trump philosophy are compiled, it is a new world order that challenges many present trends such as globalism, multinational trade arrangements in favour of the older order of nationalism. Those may be broad questions and the more intricate will be the question of how American manufacturing competes on a global level without the benefit of cheaper foreign factory labour. Or hasn't the development of technology in global markets increased the consumer base for American goods?
On the domestic side, the question of by whom and how menial labour carried out now by foreign and, at times, undocumented cheap labour is replaced? We are living in a technological era, hence robotics and automatisation will undoubtedly be one answer to offset the need for cheap labour, and the proposed trillion-dollar infrastructure spending will, in the short term, provide job relief for millions who will face readjustment and unemployment.
However, the looming question remains: from where will the funds come to finance the infrastructure, the government and its debt? Investors live in the now and the possibility of immediate benefit is reflected on Wall Street in the rising stock market.
Society in the 21st century, as shown by recent populist movements, will not be ignored. The future cannot be predicted by stock markets without a huge consideration of how populations accept or embrace their fates that are largely dependent on where they fit within the economy. Investor confidence is good for stimulating the economy, but the proportion of who benefits translates into either the sobriety or the malcontent within the society.
If the billionaire class succeeds handsomely over the next four years, but the millions of workers who supported the Trump wave have made no gains, and their condition of life has not altered for the better, where will that lead?
Given all the dynamics, as a gamble, I will forecast that unless Trump simultaneously creates a monarchy that is embraced, his pure and extreme conservative approach will fail on both a national and international level.
One will have to wonder whether his slogan “Drain the swamp” means not only the removal of useless bureaucrats, but also includes his presidential executive removing or lessening the value of all the other branches of government, which has been the basis of the American democratic experiment.
His Florida speech, where he seemed more comfortable talking directly to his supporters, is an indicator of a leadership style that prefers to gain its mandate through talking straight to a mass without debate and reflection, and is another interpolation of “the consent of the governed”.