Lawrence Zammit's article on The Times of Malta.
Last Tuesday the United States of America elected its new president – Donald Trump. On Monday most political analysts were predicting a victory for Hillary Clinton, but the public in general knew that at best it was a close race and that Donald Trump could very well win. One needs to remember that Trump did not even enjoy the support of all the Republican Party, as leading lights of this Party openly supported Clinton. So he did win against most, if not all, odds.
Bridge players know well what a trump card is – a card of a suit any of whose cards will win over a card that is not of this suit. Another dictionary definition of the word trump is a decisive overriding factor.
My intention is not to go into analysis of the US presidential elections. However I would like to focus on one element that is evident in most parts of the world and which may have been a decisive overriding factor in the USA. It was Donald Trump’s trump card.
Once it became evident that Donald Trump would be the next president of the United States, the financial markets in Asia (at the time they were the only financial markets that were open), became very jittery. In effect, in the past weeks, whenever there was an opinion poll that indicated Trump to be ahead of Clinton, financial markets reacted negatively.
This is strange, when one considers that Trump is definitely a pro business person and someone who has made truckloads of money in the financial markets. So it is quite pertinent to ask why financial markets are fearful of Donald Trump and were quite happy with having Clinton as president. There appears to be a disconnect between economic operators and the general public. The support enjoyed by Trump among white middle class Americans living in what is referred to as the Rust Belt symbolises this.
This occurred also in the United Kingdom referendum on whether or not the country should remain a member of the European Union. The economic operators and the financial markets were hoping for a remain vote but the majority of the popular vote was for leave.
From a political perspective, it is evident that candidates who stand up against the establishment are more likely to garner political support. France and Italy are another two examples of this with opinion polls indicating that the most popular party in each country is a Eurosceptic party (Le Pen’s party in France and Grillo’s party in Italy).
From the economic perspective, we have a situation where the process of globalisation carries on relentlessly, while politicians with parochial views enjoy increasing popular support. Thus this disconnect between the economy and society in general is becoming even more acute.
At this point one needs to ask whether Trump’s election in the United States will see a reversal of the process of the globalisation of the economy. Or will Trump take on a pragmatic approach and recognise that certain promises he made in his campaign can never be implemented? Will this anti-establishment wave continue and sweep to power politicians who seem to yearn for a return of defending a country’s interest at all costs, even if it hurts other countries very badly?
Or is this trend just a part of the evolutionary process, whereby the economy and society converge once again? In the past years, there were many who have claimed that the process of globalisation of the economy needs to be supported by global regulatory institutions. It is also not very helpful if the process of economic globalisation is not underpinned by a process of globalisation of society in general. The views expressed around the world on the issue of immigration evidences once again this disconnect.
I have referred to several times in my contributions about the need to strengthen the principle of the common good in the management of the economy. It is the only way that process of globalisation of the economy would be of benefit to society as a whole. In the absence of the application of such a principle, it does not seem odd that public opinion stands up against the economic establishment. We need to wait and see how this will translate into economic policies around the world.