10 July 2016

Why Trump Will Win in a Landslide

Observing recent events both at home and in the UK, I don't agree with Malcolm Turnbull's comment/campaign message that we live in uniquely exciting times. However if he'd said that we live in historically unstable times, then I would be right with him.

My wife and I recently went to Europe for a wedding. We happened to be in London for the Brexit vote and saw the "Leave" campaign win convincingly. We then made it back to Australia in time for the election here and like everyone else, watched the make up of the Parliament go from bad to worse in terms of delivering a clear mandate for either major party. To cap things off you have a situation in Spain where 2 elections inside a year have failed to produce a majority government.

Looking logically at these results, they make no sense. Normally people strive for stability and certainty in their lives so why would they vote in a manner which instead is going to produce more chaos? More on this below but I think the answer lies in the fact that people all around through the western world are angry with their circumstances and are looking for targets to express their anger. When this sort of mindset prevails, people's pet grievances take centre stage in their voting decisions and distrust in the establishment hits fever pitch, leading to the sort of results we are getting.

Take Brexit for example. A range of eminent economists with no vested interest in the outcome gave their opinion as to what the consequences would be for the UK to leave the EU. 95% of them said the UK would be economically worse off in the short, medium and long term. World leaders such as the President of the USA and the Prime Minister of the country both warned that Britain would suffer worse terms of trade outside the EU. Obama in fact went so far as to say that the USA would put Britain behind the rest of the EU in terms of future negotiation of trade deals as their preference would be to deal with a larger trading bloc. Many banks warned that thousands of British jobs would be lost as they would have to move their European headquarters from London over to the continent.

Yet this advice seemed to be completely ignored - in fact, it was arguably counterproductive in securing votes for the stay campaign. Coming as it did from the establishment, people wanted to stick it up them by voting against the orthodox thinking. That's if in fact anyone considered the economic consequences when they cast their vote. Most of the questions from the public in the lead up to the vote didn't concern the economy at all but were almost exclusively about immigration and border control. Certainly the likes of Nigel Farage played up this issue to pretty good effect.

When the "Leave" vote won, the consequences were immediate and predictable. The Pound dropped 10% in a day and stock markets round the world tanked. Within 2 weeks the Prime Minister had resigned, his heir apparent Boris Johnson was a dead duck politically and Farage announced he was leaving Parliament  to crawl back under whatever rock he emerged from to form UKIP. The Labour opposition was also in turmoil with Jeremy Corbyn left a lame duck leader following the resignation of most of the shadow cabinet. Scotland, which voted to remain in the EU, raised the prospect of a fresh independence referendum, while Northern Ireland also raised the prospect of Irish reunification. Instability in spades.

The worst thing of all was that it quickly became apparent that the government had done no forward planning for this outcome and with the current leadership of both parties blown to smithereens and the very continuation of the UK in doubt, who knows what is going to happen over the next 18 months. Will this mean England will be better off leaving in the long run? Maybe it will be. But its pretty hard to see it as things stand today and it is going to be a long, complicated and painful separation.

Of course, a similar scenario played out here a week later with our election. Being a double dissolution election it was meant to deliver a workable Senate. However instead of a few oddball independents we now have a sizeable voting bloc controlled by Pauline Hanson, Fred Nile and Derryn Hinch. Throw into the mix another bloc controlled by Nick Xenophon whose agenda is anyone's guess and you have a nightmare scenario for Turnbull to deal with. That's assuming of course he can keep the extreme right faction of his own party sufficiently under control to get any initiatives through the party room. Again, instead of delivering the political stability required to implement meaningful reform and which our economy desperately needs, the electorate has opted for more dysfunction.

Why? As I mentioned, it's because they are angry, and it is this anger which is driving their voting intentions, not common sense. The causes of this anger are almost always not due to matters within government's control, but nonetheless governments all over the western world are bearing the brunt of it.

The reasons why the mantra spouted by the likes of Pauline Hanson and Nigel Farage is gaining traction again are fairly obvious when you think about it. First, the old world order which has seen white, Western European descendants dominate world economics and affairs since the Renaissance is crumbling. The rise of Asia and in particular China has meant not only that these countries have secured a greater say in world affairs, but as their economies become industrialised, a lot of jobs that would have previously been located in western countries have been taken over by these emerging economies. While there is not a lot any western government can sensibly do to prevent this trend, nonetheless workers who have been laid off from their jobs feel highly aggrieved and look for someone to take their frustration out on. Who better than the political establishment?

Secondly, globalisation and the resultant increased fluidity in immigration, communications, trade and business means we are increasingly exposed to foreign influences and people in our day to day lives. While many Australians have embraced this new order, others are highly resistant to this change and find it confronting and objectionable. This in turn leads to calls for more isolation by restricting immigration and the right to practice some of the more overtly non-Christian religions.

Thirdly, most people are financially worse off than they were before the GFC. Despite the fact that the Australian economy has kept growing during the last 8 years, it is a demonstrable fact that the wealth generated over this time has become concentrated in fewer and fewer hands. Most people find this annoying and this is one area where I wholeheartedly agree that governments have not done enough to set a fairer playing field in Australia. However with a newly-emboldened arch-conservative faction, good luck getting any of these measures through the Liberal Party caucus now. I'm half expecting the 2014 budget to get re-introduced.

Of course, the notion that somehow Australia or even the United States can stop inexorable events like globalisation, the rise of China or immigration (which, let's face it, has been going on since humankind came down from the trees) is barking mad. It's a bit like asking the local under 8s side to go face up to a full strength Hawthorn side and expecting them to win. But hope does spring eternal. So when some shrill harpy from Ipswich starts getting on her soapbox and promising things like inquiries into climate science, banning mosque construction and stopping the Chinese from buying Australia real estate, this resonates with a lot of disaffected and displaced people.

Which brings me to Donald Trump. I firmly believe the same dynamics are afoot in the United States that brought about the Brexit vote and the election results here. How else could someone who has been marching around the campaign trail for the past year offending just about every minority group in the country be so popular among US voters? It's because he is peddling an anti-immigration, anti-Muslim, isolationist version of America that resonates so well with white, disaffected voters who have been hit hardest by global change.

Also Trump enjoys the same luxuries as a Pauline Hanson in that his campaign promises are so preposterous that no one realistically expects him to deliver on them. Mud simply does not stick to Trump the way it does to an establishment figure like Hillary Clinton. Could you imagine the uproar if Clinton suddenly made a campaign promise like a free public healthcare system for the United States? But Trump promising to wall up the Mexican border and get the Mexicans to pay for it barely raised an eyebrow.

It's not often I agree with a statement made by one of the Bush family, but to my mind, Jeb Bush summed up Trump perfectly when he described him as the "chaos candidate". Can anyone seriously imagine Trump successfully conducting delicate disarmament negotiations with Vladimir Putin, or trade negotiations with the Chinese (assuming he decides after all that slamming the door in their face isn't the best approach)? Doesn't anyone worry that this guy is going to have the nuclear codes?

If Americans think sensibly rationally about where to cast their vote this November, on any measure they should vote for Clinton. She is not without her flaws or limitations, but she is experienced in public life and at least she can be trusted not to do anything spectacularly stupid.

However, given what has gone on here and in England, I don't think rationality will win the day. Like us and the English, Americans are angry, they mistrust and despise the political establishment, and they want to make them pay - even if it that involves significant self harm. As a result, Donald Trump will be elected the next president of the United States, and the end result will not even be close.

And when that happens, Australia, England or even Spain with all our problems might not be bad places to be.