Trump’s 2016 Election And Its Implications

‘Democracy is being allowed to vote for the candidate you dislike least.’

 Robert Byrne

 

In 1824, Andrew Jackson ran for President against John Adams. In a highly contentious outcome, Adams struck a deal with Henry Clay which denied Jackson the Presidency and gave Adams the highest office in the land. It was called by Jackson, ‘A Corrupt Bargain’, and he used it the next four years to discredit Adams and his government. Four years later, in 1828, Jackson won the Presidency by defeating Adams. Jackson, known for his military leadership and great victory in the Battle of Orleans, was the father of populism and coattails in government. In fact, Jackson was part of many of the most famous events in our country’s history, including him fighting in the Revolutionary War as a boy.  

 

In April of 2016, Treasury Secretary Jack Lew decided to replace Andrew Jackson on the front of the twenty dollar bill and relegate him to the back of the currency. When Donald Trump defeated Hillary Clinton this week to become our country’s President elect, he used Jackson’s playbook populism strategy of speaking to the common man. The implications of the election are huge, if you get my drift. With respect to future policy, financial markets see a Trump Administration enacting policies which help many highly regulated industries suffering from Obama’s prescription of a heavy touch. The banking sector will see relief from Dodd Frank, and potentially Sarbanes-Oxley and even the Consumer Finance Protection Bureau. Energy will benefit from a far less restrictive Department of the Interior, far fewer restrictions on exploration and a more welcoming attitude towards building infrastructure for moving materials, like pipelines.

The health care industry is relieved to not have to deal with price controls on drug pricing. Health insurers are jumping for joy with the prospect of the repeal of the Affordable Care Act. Cable and telecommunications providers drool over the chance that net neutrality could go bye-bye. All over the corporate landscape, high fives are being given about the possibilities of a lower corporate tax rate and a relief on the repatriation of capital from overseas subsidiaries.  In education, the private suppliers of secondary schooling might see welcome relief after being devastated with financing restrictions.

Builders, material suppliers, and engineering firms also can look forward toward far more aggressive fiscal policy to repair the country’s aging roads, highways, bridges, and ports. The defense industry should see a boost in spending from its largest customer, the Federal Government. The high tech industry may feel some pressure about encryption and HB-1 Visa’s, but will benefit from a lower potential rate on repatriation of foreign profits. As for losers, certainly alternative energy comes to mind, as does any industry which relies on foreign manufacturing of its products. You knew this election was a win lose proposition, and the judgment has now been rendered.

In any sport, when two bad teams play, one of them has to win. Many believe that is the appropriate description of our country’s choices for the Presidency during this term.  As for the analysis of what transpired and why, plenty will be written about this election as it will go down in the country’s history as one for the ages. I always believed Mr. Trump’s rhetoric would ultimately doom him, but I was clearly wrong.  

From a policy perspective, as a business person, many of his positions could not be more favorable and should be stimulative, perhaps maybe even inflationary.  I think the fact that Mr. Trump put in one hundred million dollars of his own money into the campaign shows you why having skin in the game matters.  At the end of the campaign, Trump worked very hard in those mid-western states to persuade voters, visiting Michigan, Pennsylvania, and Ohio multiple times. Super PAC funding ain’t the same thing as reaching into your own stash, imagine that.  

The country ultimately rejected the policies of Barack Obama as the one intangible which polling could not detect was the unease people felt about the direction of the country.  The release of dangerous prisoners in return for air, the terrible Iran deal, the multiple terrorist attacks and brutal killings, Benghazi, the Justice Department cover up of the emails and pay to play, the in the tank media, Obamacare, and of course, the stagnant economy, all combined to present a huge mountain for Hillary to overcome. Donald Trump won with his brand of populism, but it certainly did not make him a good candidate. Someone had to win and he did, thank goodness. Meanwhile, somewhere Andrew Jackson has a little smile as he is gone but not forgotten.