“Bad money drives out good” - Gresham's law
Quite a lot of things have been said about Trump’s “surprising” victory as a President of the USA. Here is our take, written only a couple of days after the results, but only published today as part of our Weekly Round Up.
Trump won. The media made us believe that he wouldn’t. They warned us through a constant feed of opinion articles, negative coverage and more subtle biased sentence structures. They openly turned against him, endorsing Clinton. Yet Trump won. Yes, he won the electoral vote, not the popular vote. Yes, only 57% of people voted. Yes, Hillary won 200,000 more individual votes. It doesn’t matter really. The reality is that Trump won thanks to actual people voting for him.
We discussed it briefly in our last WRU: these people turned to him because they have actual concerns. The elite turned their back on them, made empty promises and are corrupted by a system where big money is a major force. America’s establishment is responsible for Trump’s victory: for 30 years, they destroyed the American middle class and hid behind lame excuses. Now they’re reaping what they sowed. Meanwhile, if anything, the election showed America’s true democracy: anyone who’s a billionaire can become president if he works enough for it.
But no outsider is allowed into America’s establishment. The media lashed out at Trump, yet their responsibility is also quite clear: too cozy with the establishment to call out on their excesses, they failed to properly inform and properly listen to what Americans feel. The graph below shows all too well how journalism today became just content management. Lower revenues translates directly into lower quality journalism. In other words, when you’re reading mainstream media, you’re most likely reading garbage.
Meanwhile, on new medium such as Facebook or Twitter, our ability to select our friends made us only see what like-minded people were publishing. Difficult to predict Brexit or Trump when all the content that’s thrown at us explains why it’s impossible or even outright stupid. But now, if you’re a Brexit or Trump supporter, what do you think content management throws at you? What do your friends publish about these issues?
It’s been known for a long time. Now we have to actually deal with it: new technologies isolate us, destroy social bonds, make us more free to express hidden extreme opinions and decreases our ability to engage into constructive dialogue.
Now, coming back on Trump: he’s been elected. Like most politicians, Trump said things he didn’t believe and/or won’t do. In any case, he is the second kick in the balls of the establishment, after Brexit. He is the confirmation that the status quo maintained by an elite captured by ideological fantasies and big money is not going to last.
It is our understanding that besides being a long time political insider, Mrs. Clinton has not much to offer to America besides very generic, tried and failed policies derived from a failed paradigm. In fact, her hawkish stance on foreign policy might have made her a dangerous force on the world. Her failure to win the presidency is the result of 30 years of broken policies.
Trump’s election will embolden populists parties around the world. It decreases America’s image in the world. Autocratic regimes pointing to the obvious failings of its political system. But we remain dubious that this is going to be the end of the world. It’s a serious blow to the Washington elites, lobbyists and professional snake charmers. If Trump actually shakes the elite, how bad could it be?
It is certainly a step in the wrong direction but we must hope that responsibilities will make him a wiser man, able to lead his country toward a better future with jobs, reduced inequalities and a pragmatic foreign policy. If not, let’s hope the establishment will go through some soul searching before coming back with serious proposals. The USA went through 8 years of Bush and ended up with a Great Financial Crisis and then elected Obama. Let’s see what Trump cooks for us over the next 4 years.
Science, General Knowledge & Environment
The age of vitriol: Edward Luce on US politics and social media – (Hat tip Lao Ho) – Important “The level of trust between electors and elected has been falling for years. In 2016 the electorate has begun to turn viciously on itself. Is this a blip or a permanent shift? The future of free society may depend on the answer. Democracy cannot prosper for long in a swamp of mutual dislike.”
Will Trump Be Rolled by the Republican Establishment? – “So while there is some reason to think that Trump might remarkably be able to deliver on his plan to rein in the war mongerers, the odds for the rest of his populist promises don’t look so hot based on his list of advisors.“
History & Geopolitics
Election 2016: Playing a Game of Chicken With Nuclear Strategy – “It’s clear that we’re on the threshold of a new nuclear era: a time when the actual use of atomic weapons is being accorded greater plausibility by military and political leaders globally, while war plans are being revised to allow the use of such weapons at an earlier stage in future armed clashes.”
Conversation: Trump’s Foreign Policy Priorities – [Video] – “Stratfor Vice President of Global Analysis Reva Goujon and East Asia Analyst John Minnich discuss the critical foreign policy issues facing President-elect Donald Trump.”
China tries chequebook diplomacy in Southeast Asia – “But while Washington’s chief problem is an inability to focus, China has its own chronic foreign policy disorders. Beijing has struggled to win friends in Asia, where most countries depend on China for their prosperity but prefer to rely on the more predictable US for security.“
La Stratégie Maritime de la Chine – “Si la Chine devait mener une classique politique de puissance et de fait accompli ; si elle cherchait à devenir une ‘Amérique asiatique’, qui, comme elle, serait souvent trop unilatéraliste, trop polluante et pourquoi pas, elle aussi, un jour militariste sans pour autant être aussi démocratique que les Etats-Unis ; si elle visait à reconstituer un monde bipolaire, cette fois-ci autour d’elle-même et des Etats-Unis ; si elle prétendait imposer au monde ses normes et ses conceptions propres, alors aucun choc ne serait exclu, et tout serait à craindre.“
Leaders don’t grasp Hong Kong fury – “There’s little evidence that Mr Xi’s government has the same capacity to recognise its limitations, much less to compensate for them with pragmatic policy. In fact, the evidence suggests just the opposite.“
Finance & Economics
Beware economic models – For those who didn’t know. “Economic models are like a lot of things in life: What you get out of them depends on what you put in. But therein lies the problem. When reporting focuses on the ‘findings’ without looking at what assumptions underpin politically influential economic models, it leaves us vulnerable to what Richard calls the ‘peak-stupid of econobabble’.“
Trump the “Infrastructure President”? – “The central theme of Ritholtz’s prescription was that infrastructure investment can offer the double dividend of supporting growth and jobs, whilst also expanding the longer-term productive base of the economy and improving living standards. The key proviso is obviously that the infrastructure is well-targeted and aimed at enhancing productivity.“
Inside China’s wild bulk commodity bubble – “Commodity trading has surged in China as retail investors, rich individuals and wealth managers use the sector as a quick and easy way to place leveraged bets on the domestic economy or government reforms.“
Picture of the day: Election Day 2016
About Carlito Riego
"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi