Trump means business (in every sense)
Why America and the wider world have nothing to fear from the president-elect
A number of my colleagues, and executives I know, have been asking me what I think about the Trump victory. “It’s amazing,” I say enthusiastically to rather bewildered faces. I am a born optimist and see the glass half full. Let me elaborate.
Full disclosure: before being a supporter of Mitt Romney, I supported Herman Caine (the computer scientist and former CEO of Godfather’s Pizza). I also favoured Dr. Ben Carson (a paediatric neurosurgeon) to be the Republican nominee.
I am a lifelong Republican and first voted for Ronald Reagan. I have always supported the non-establishment candidate; especially ones leaning towards the “more freedom is always better than less freedom” philosophy.
So, how will America cope? My forecast is “just fine”. In fact, there is a very high chance it will thrive. Remember that we have previously elected movie actors, peanut farmers, rough riders and a whole assortment of characters to the presidency. We have also elected minority and physically impaired candidates to the highest office. Such outcomes are unheard of in progressive European countries, or even the vast majority of United Nations member states. This ability for Americans to value “diversity” is what sets us apart.
Back to President-elect Trump. Before the first primary, I stunned a few people by suggesting that Trump could win, despite everyone in the media saying the opposite, including Republicans. I was convinced of this by reminding myself that one of the most blue of blue states, California, elected a Republican governor not so long ago – and somehow Arnold Schwarzenegger managed to keep the lights on while Silicon Valley kept humming. Similar behavioural stories erupted before Scwarzenegger’s election, and he prevailed anyway.
Scary stories about Ronald Reagan starting wars everywhere were pushed by the media, but he was elected anyway and ended the cold war. The Tea Party candidates flipped the House of Representatives and US Senate, despite similar media noise. So, Trump was really nothing that new, except to people in the media. Anyone remember Brexit?
So, what can Americans expect from Trump, the latest anti-establishment hope? Here are my forecasts.
With respect to business:
• A simplification of the US tax code for individuals and businesses (especially small businesses).
• A decrease in Wall Street’s influence (thought this will be hard).
• An increasing influence of small businesses and entrepreneurs (with a reduction of red tape).
• Conservative appointments to the Supreme Court, with greater emphasis on original intent (as opposed to the court legislating from the bench). These appointments will eventually result in greater individual freedom, choice and dynamism…what the founding fathers originally wanted by breaking away from a monarchy.
• Free trade will take place between free countries. Negotiated trade will take place with everyone else.
None of the above should make people nervous, unless you are a hedge fund manager, a tax preparer, or an executive whose compensation has been based on crony capitalistic arbitrage. But even then, for the smarter ones, things can be good no matter what direction things are moving.
Profitable companies that have previously donated to political parties (left, right or both) and received favourable regulatory protections should be worried. Anyone downstream or upstream from these companies should also be worried. Trump did not take their money, and did not get their support. Stocks taking the big hits after the election are the ones that will rebound the most, once they abandon “business as usual” for “business as business.”
What of immigration and labour markets? Here is what to expect:
• Voter-driven policy on immigration.
• Open doors and borders policies will be redressed.
• The deportation of ‘criminal aliens’ to their countries of origins with these being forced, via diplomatic muscle, to accept them back.
• A tightening on local labour markets, increased wages to the bottom of the pyramid and a price increase on products or services dependent on those wage earners.
• High tech visas, that have displaced American workers with STEM degrees, will be tightened.
What of government? Here are my forecasts:
• An elimination of departments, agencies and initiatives that have not delivered results.
• A paring of major IT or other tech initiatives that have actually increased the cost of government, rather than make it more efficient at a lower cost (what IT is supposed to deliver).
• A re-orientation to urban development with the private sector taking the lead.
• A fix on health care insurance regulations, allowing cross-state competition, reducing government intrusion into this space. Accommodations will likely be made for those currently covered who risk losing their current insurance.
• The legislative branch will take back some of its power, and the executive will be in greater check from a more conservative supreme court; this shift will have repercussions in cases involving government surveillance, and everything relating to freedoms guaranteed in the Bill of Rights (US gun sales may actually decline given that one’s ownership rights will not be perceived as being threatened).
• And last but not least…“best practice”. The Trump administration will seek to implement best practices they can glean from outside the United States. America has fallen behind on methods government can use to improve its quality of service to its citizens. Ask anyone who has extensive international experience, and you know things can be improved in the States.
As for military conflicts, here are my predictions:
• “Contain and degrade” will become “win: quickly and decisively – now pay” which can have the benefits of reducing the human and financial costs of engagement. Countries that request help in this regard, like the British during the second world war, will receive a bill, probably with generous payment schedules.
• Bases overseas will continue to operate with more modern and effective tools at their disposal, and local governments will be asked to contribute more to their maintenance.
• Trump will look for win-win negotiations with adversaries that do not represent existential threats.
• Military professionals (as opposed to young staffers with liberal arts majors) will be in charge of operations.
Finally, perhaps the biggest change will have been the awakening. Similar to Brexit, the electorate has now learned that the politicians are overtly in collusion with the mainstream media. Breitbart, Drudge, and a handful of others were once seen as providing an exaggerated view of the world (in the best case, their journalists were called idiots).
This ended on November 8. If you have not heard of these outlets (and many executives I interact with have not), then you have been looking at the world through a broken prism. Political correctness and left-wing stereotypes of people that disagree with them are being demolished. Members of largely ignored communities, once taken for granted by the Democrats, have jumped ship for an outsider who has been forgiven for showing all his character flaws.
Calling all Republicans racist, sexist, or xenophobic did not cut it for the Democrats. Republicans are proud to accept the tenets of Lincoln, Harriet Tubman, Frederick Douglas and many other republicans, including those who successfully pushed civil rights in the 1960s. The late Andrew Breitbart, Milo, and scores of others have forever changed the map that establishment politicians have grown accustomed to shaping. If Trump succeeds in his experiment, then this may begin a healing we all hoped for with President Obama.
Note to my academic friends: I previously argued that if we truly believe in scientific principles, there was only one choice, and that was Trump.
We need variations in data in order to make more informed decisions. What would happen if America elected someone with absolutely no political experience? What would happen? We do not have any insights…for lack of data. We now have one.
Philip Parker is the chair professor of management science at INSEAD and director of the TotoGEO.org project