With a large part of voters disgusted from this US Presidential race, which reached unseen before heights of bitterness, hatred, toxic recrimination and another part of Americans ready to contest the result, had Donald Trump lost the race. In the end, he achieved a landslide win and will become the next President of the USA. Surely though his victory will increase the predicaments within and without the US.
As for the real problems, income inequality, the reign of the industrial-military complex, the mess of globalization, the sway of Wall Street banks and the deadlocks of US foreign policies in South East Asia and the Middle East, all that will continue haunting the White House. Trump will do very little to successfully confront them. He has already disowned his early promise to increase taxation for the rich. He will certainly also back off from his other populist promises. Let’s dig a bit deeper to that.
The political ruins
Unfortunately, both pillars of the US political system came out of the last election severely damaged. The Democrats, because they failed to gain a majority in any of the two chambers of the Congress and suffered a humiliating defeat in the Presidential race. The Republicans, despite retaining both houses in their hands, the Trump landslide leaves the party divided in three well established and hostile between them factions. Trump himself a byproduct of the Party’s extreme ideologies, is now the leader of the new populist movement within the party. The ‘Tea Parties’ and the establishment of the ‘official’ Republicans constitute the other two factions.
The Party’s right wing ideology has even reached the point of supporting the abolition of the highly efficient American tax collection system. Last July, a committee made up by Republican Congressmen produced a document demanding the abolition of the Inland Revenue Service. It was a natural consequence then, that Trump made his banner the abolition of the entire ‘rotten system’, as he calls everything that keeps the US in one piece. Of course, he didn’t say with what he plans to replace it.
The Untouchable banks
With the eventual deep schism of the American society and the irrevocable multiple dissections of the political system, the White House under Trump will find it rather unfeasible to tackle the real problems. The financial hub of New York will try to make the average American pay for his victory, thus sending a message about what Wall Street can do, if Trump tries to touch its ‘freedoms’. The New York banks, despite losing their bets on Hillary, are far from being left without a large choice of weaponry. Not to forget that the US financial sector accounts for anything around 10% of the country’s GDP.
It was 4.9% in 1980 and at that time the global economy didn’t run any real danger of an economic Armageddon. Today, the New York bankers may not feel quite safe, but they will keep vying to soak up an increasing part of the country’s real economy. They are achieving this miracle by just doing nothing more than creating money and wealth that exists only, because the central bank (the Fed), the government and the other Washington authorities say it exists.
Trump, being a New York multibillionaire himself, will think twice before attacking the Wall Street sharks where it hurts; their freedom to use other people’s money to enrich themselves. The New Yorker businessman will surely compromise his anti-systemic rhetoric into cooperation with the ‘system’, as all populist politicians have done before him, right-wing and left-wing alike.
What about foreign policies?
Now concerning Trump’s foreign policies, he has clearly indicated a cool stance vis-à-vis Europe and Russia, a more aggressive attitude towards China and much less military presence abroad. The US-Mexico relations will probably not change much, despite Trump’s rhetoric. The geographic reality is unbeatable. However, foreign policy is affecting the internal positions of the industrial-military complex and the New York banks. In this respect, Trump may try to assume a tougher stance towards them, cutting down military and security spending. The banks are also affected by foreign policy issues for obvious reasons. But then again, if hard pressed, Trump may change his position once more. He is renowned for frequent position changes and unpredictability. He will have no problem justifying anything.
On the foreign trade front, Washington may start pressing China more and more and will eventually target a new reality in this sector. But those things are very difficult and time consuming to change. So, Trump may continue his rhetoric against free trade and globalization and at the same time not do anything important to change things. In Europe the Iron Curtain the Obama administration has started to construct, aiming at definitively disconnecting European Union from Russia economically will not be easily lifted.
Under Hillary Clinton, Washington would have considered the possible close economic cooperation of the EU with Russia, as a strategic threat for the US. Under Trump this may not be the case. Then again, tradition in Washington teaches us, that the White House can internally change the scenery, in the fields of taxation and other home policies but the in the foreign affairs domain the prerogative belongs to the public administration.
The Western financial universe
In the Western financial universe, the US will rather continue the attacks on Germany and the German business interests, ultimately aiming at the economic submission of Europe. This is clearly a key foreign affair issue, not an economic policy question. So, the attacks against the Eurozone banks will continue. The English language main stream media will play a central role in that, as they have already done in the case of Deutsche Bank. Trump will have no objection to that. He knows very well the key role the media can play, being himself a product of them. Then, very probably, the new administration is to use all the means in its arsenal, including the International Monetary Fund to attack Eurozone. Washington doesn’t want the dollar very weak against the euro.
The US aim at the huge financial reserves of Germany. Washington wants Berlin to use a large part of its more than a trillion euro reserves, to refinance the problematic Eurozone banks and also cover South Europe’s economic deficits of all kinds. In this way, this German financial cushion will be greatly weakened, thus making Germany more compliant to US dictums.
Such a development, accompanied by a weaker euro, will make it more difficult for the German multinationals to acquire precious American assets, like the acquisition of Monsanto by Bayer. At the same time, the US business groups will be facilitated to buy key German businesses, as in the case of the electric automaker Tesla’s acquisition of Grohmann Engineering GmbH. This last German firm is the world champion in batteries manufacturing. All this will continue to happen under Trump.
In conclusion, the Trump triumph will have fewer consequences than many people think. He belongs to the category of populist politicians by nature and mind, and all of them have poorly or not at all served the cause and the rhetoric that brought them to power. The latest examples are the Greek Prime Minister Alexis Tsipras and the British Brexiteers. Tsipras was elected to fight the economic surrender of his country to her creditors and did exactly the opposite. As for the British Brexiteers, they pretend now they didn’t know how difficult it is to winkle Britain out from the EU.
Trump will be using exactly the same arguments every time he will be forced to justify his policies, in contrast to what he has said, in order to get elected.