Week of November 11th, 2016

Trump Did It!!!!!

In an election that surprised pollsters and Washington political experts, Donald Trump easily beat Hillary Clinton and became the President-Elect of the United States.  In doing so, he broke all the rules that supposedly governed how a candidate wins the White House.  Trump was expected to lose quickly in the GOP primaries.  He spent less than half of what Clinton spent in her losing campaign.  Instead of heavy media advertising, he focused on massive rallies across the nation.  He eschewed political consultants.  And, he went against many in GOP leadership.

The result was a win that brought the “Rust Belt,” once the industrial heartland of America, into the Republican fold for the first time in nearly three decades.  He also expanded the Republican voting bloc to include blue collar Democratic voters who had voted for Reagan, but had returned to the Democratic Party.  Looking at the results, there is no doubt that he was the only Republican candidate that could have pulled this off.

If there is one overriding reason for his victory it was that he managed to frame the election into an establishment/non establishment race.

Trump Versus the Establishment

It will take a long time to analyze exactly what happened in the election. It is already clear, though, that what propelled Donald Trump to the presidency was his grasping, before others caught on, that the contest was far less about right versus left, or even Republican versus Democrat, than about the country versus Washington.

The anti-establishment movement was already emerging in the final year of the George W Bush presidency.  It is the movement whose outlines were sketched in the Spectator by Angelo Codevilla in 2010.  The article noted the clash of “the ruling class” against the country – ordinary Americans, who were outraged by the self serving attitudes of the bipartisan political leadership and its corporate donors.

It is the movement that gave rise to the Tea Party and other grassroots revolts against Washington’s monstrous growth and intrusiveness.  It continued to grow as Americans began to believe in a rigged system that helped the elites; while the average citizen saw his earnings stagnate.

In the Obama years, as the divide widened, the political establishment took on a post-American cast. But the American people, it turns out, still like being the American people. The electoral blowback began in 2010, despite Obama’s 2012 reelection (in which he lost nearly 4 million voters from his 2008 victory).

The 2014 election only fed the flames as voters began to realize that the GOP leadership had promised to change the ways Washington operated, only to forget their promise when they won control of Congress.  The result was increasing numbers of Americans, across ideological lines, objected to the things Washington was doing.

Donald Trump saw an opening to become their champion, and that is what he made himself into.  As he would remind people at rallies, he was once the “ultimate insider.”

The Rust Belt Strategy

Trump took this “Us versus them” unrest and used it to expand the Republican electoral map in ways that other GOP candidates would never have thought of.

In 2012, after losing to Obama, the GOP did a study that recommended pushing for immigration reform in order to win more Hispanic votes and move some Democratic states into play.  It was this strategy that most of the GOP candidates would follow.

Trump decided to focus on what was once called Reagan Democrats – working class Democrats that had voted for Reagan, but had returned to the Democratic Party to vote for Bill Clinton.  They are found predominately in the swath of states that once made up the industrial heartland of America – Pennsylvania, Ohio, Michigan, and Wisconsin.  Of these states, only Ohio was normally considered a potential Republican state.

Although conservative social issues like gun ownership resonated with this group, these voters had not supported any Republican presidential candidates since 1988.

Although Trump used conservative social issues in his campaign, he focused on pocketbook issues like high paying manufacturing jobs that had left the country and gone to Mexico and China.  He attacked Obama and Clinton on their desire for large international trade deals and reminded voters that Bill Clinton had signed the North American Trade Agreement that had sent many manufacturing jobs to Mexico.

While Trump did spend time in other battleground states like Iowa, Florida, and North Carolina, much of his campaign time was spent in these four rust belt states.  The result was that he won all four states – giving him more than enough electoral votes for victory.

The Clinton Miscalculation

While Trump ran the ultimate unconventional campaign, Hillary Clinton ran the ultimate conventional campaign, with high paid political consultants, a large staff, major media buys, and a typical Democratic campaign strategy that relied on minorities, women, and young voters.

While this strategy worked for Obama, it failed miserably for Clinton.  Fewer Hispanics and blacks came out to vote and fewer voted for Clinton.  The same was true for 18 – 29 year old voters.  While women preferred Clinton, the numbers weren’t any better than the percentages that Obama received in 2012.

In some cases, Clinton’s strategy only helped Trump.  While Clinton received more political contributions from rich voters, Trump used this fact to show that she was more beholden to the establishment.  In the end, the extra money didn’t help and only reinforced Trump’s change that she was the candidate for the rich.

What Next?

Despite the predictions of doom that accompanied a potential Trump victory, the financial markets, world leaders, and Republicans seemed to take his victory in stride.

Despite predictions that the GOP would tear itself apart no matter the results of the election, it was clear that victory is the best antidote to dissension.

House Speaker Paul Ryan congratulated President-elect Donald Trump, calling his win a historic moment in our nation’s history.  “This is the most incredible political feat I have seen in my lifetime,” Ryan said. “Donald Trump heard a voice in this country that no one else heard…he turned politics on its head and now Donald Trump will lead an unified Republican government.”

Ryan was initially reluctant to endorse Trump as the Republican presidential nominee and by fall he decided to shift focus away from the candidate and toward protecting vulnerable lawmakers. In response, Trump blasted Ryan for being “disloyal.” On Wednesday, Ryan said many of Republicans’ Election Night wins were because candidates were able to ride Trump’s coattails to victory.

“We won more seats than anyone expected and most of that is thanks to Donald Trump,” he said. The new, unified Republican government, Ryan said, signals a new way forward for both the country and Washington.  “This is exciting. For those people who are concerned, this is the time to unify.”

The financial markets also took the victory in stride after a panic in overseas markets that sent the Dow Jones down over 700 points and gold up over $60.  By the time markets opened up in the US, gold was going back down and the Dow Jones was up considerably.  Investors were counting on Trump reducing the regulation of business while helping improve economic conditions.

Despite claims that foreign leaders didn’t like Trump, several were very quick to congratulate him. Putin and Egyptian President Sisi were the first foreign leaders to call Trump.  Hours later, Israeli Prime Minister Netanyahu also called Trump and announced he would be a good friend of Israel.

Russian President Putin said that he felt US/Russian relations would soon be on the mend.

This probable rapprochement with Russia may provide the first movement in Trump’s foreign policy.  It’s not unreasonable as a possible option that Trump will try to create a united front with Russia, the Assad government, and the US to defeat ISIS.

What Does a Trump Administration Mean?

Trump will quickly walk back many Obama regulations and executive orders, especially those that hinder American business.  As the American financial markets showed after the election, there is an expectation that the economy will start to rebound in the coming year under a pro-business Trump Administration.

Trump projected a reputation as a good negotiator and that will quickly show itself in international treaties and deals.  Expect Trump to threaten to pull out of several trade deals unless some concessions are made.

That same hard line will show itself when Trump looks at the Iranian nuclear deal.  Trump will be very willing to reimpose economic sanctions looking for justification to do so.

This could happen early in the Trump term as it was reported on Wednesday that Iran has exceeded its heavy water limits; and expect Trump to work with Israel to sabotage the Iranian program.

Trump will also be more aggressive in terms of stopping Iran’s missile programs.

Relations with the GCC will be mixed.  Although he will stand with them on their posture against Iran, he will probably hold out for more defense commitments from those nations.

Expect some international relations that have been strained during the last 8 years to receive a new lease of life.  The “Special Relationship” between the US and the UK will strengthen.  In fact Prime Minister May was quick to congratulate him and Queen Elizabeth has invited him to the UK after taking office.

We can also expect the US/Israel relationship to grow stronger in a Trump Administration.  Netanyahu has called him, “A real friend of Israel.”

However, the US/NATO relationship may suffer as it is expected that Trump will demand nations stand by their commitment to spend 2% of their GNP on defense.  He is also expected to try to lessen the confrontation with Russia in Eastern Europe.

The Trump Administration will have fewer academics and more businessmen with experience.  Since the think tank community was pro-Clinton, there are no think tanks that will have a major impact on Trump policy or in terms of manning the Trump Administration.

Trump’s deal making skills as claimed should also show in legislation.  Obama was notoriously bad in legislative relations and failed to even pass legislation during the period when the Democrats controlled the House and Senate.  That led to his habit of acting through executive orders.

With a Republican Congress and a willingness to make deals, a Trump Administration is expected to make some progress in repealing and replacing Obamacare, reforming tax laws, and passing some legislation to protect American manufacturing.

One problem Republicans may have is Trump’s pragmatic nature.  He is not an ideological conservative and some conservative Republicans may have problems when he is willing to negotiate with Democrats in order to pass legislation.

However, the biggest challenge facing Trump is his promise to fight the establishment as president.  This was Trump’s key to victory this week and it will be a major factor in how voters perceive his administration.

Trump has many enemies in Washington and how he works with them is critical.  He will need to find a way to cooperate in order to get things done.  Yet, he cannot be seen as becoming part of the Washington establishment.

That’s a tall order and will inevitably determine if he goes down in American History as a successful president or complete failure.