The long view on Trump. Reading the legacy media, shock and surprise seemed to be the only way to illustrate the 8th of November upset. For us, that way of branding the event is as deceitful as the polls where at the event of the election ! It is just another way to skip the real subject : the possibility of an historic turn-around in US politics. One that could have happen four years from now but who took place a few days ago for reasons that will appear anecdotal in due time. To understand it we have to go back 153 years. From an economic stand point, the Civil War saw free traders being crushed by protectionists. Appomattox1 was the starting point of an industrial boom like no other. It took half a century to a country thorned by Civil War to become the first industrial power in the world. The foundation of that prosperity was protectionism.
But when the US became the first industrial power, it became the powerful free trader, as England did at the hight of the nineteen century. It is only logical once again, there were so much profits to rip from the world’s markets that temptation was irresistible. In 1945, Europe needed americans products to rebuild itself. Things began to change in 70’s when deficits made their appearance but the US remained the indispensable economy in the world. But on the long run, american might on globals markets wane more and more. As it happened to every declining producing economies, finance became the name of the game. Thirty years of declining interest rates produced a financial boom like no other, it could be said that it is already over. 2008 showed clearly that Wall Street irrational exuberance could not go forever. Quantitative Easing signals the end of that economic phase. Todays interest rates can’t go lower without destroying the real economy for good. That is why Central Bankers are edging their bets on that front, it was necessary to stop the deflation but it was dangerous to push for another bump in the monetary growth. In short, the US economy is sitting at the bottom of the growth cycle, something have to change.
A view of Shangai’s port
Now is time for change, a new giant is know working it’s way to the top. China, according to Purchase Parity Power, is now the new leading economy in the world. It is a producing behemoth as strong as the US where on the eve of the 20th century. Times ares changing and we have to change with them. The player which will earn the marginal product of world trade is not the USA anymore. An open border policy cannot be a net positive for the US economy given world markets circumstances. While that process was already hitting hard, the rust belt “America Inc.” could rip healthy profit from the flow of service and goods coming from Asia. But now, it is clear that chinese and others asian companies are on their way to manage the process from the producer to the consumer. From now on, it is clear that the fortune 500 companies are going to feel the heat more and more. Following our perspective, it is not difficult to understand that the 8th of November is not that a surprise : it was only a matter of time before such an event took place in the historical process, and, if history maybe of some help, it could bring the American people rich rewards in due time.
But if it’s potentially an healthy thing, why so much noise and consternation ?
To understand that, it is necessary to point at the social forces behind the statu quo. It was not for nothing that Goldman paid Hillary Clinton absurd amount of money for questionable speeches; it is worth noticing too that the Silicon Valley was behind her, at the notable exception of Peter Thiel 2
Finance could suffer heavily from a financial reorganization focused on production, the tech companies are among the last ones to grow in the international sphere. Just imagine how much trouble it would be for Apple if president Donald set punitive trades tariffs. For them, change could bring mayhem, that fact founded a powerful alliance. Add to that the interests of a security apparatus build for imperial status and you’ll get a good view of what the establishment is. In short, what is good for Apple and Goldman Sachs is not so for main street and that fact is set to grow bigger and bigger each year passing. It’s a loosing war, but the Civil War was also decided in it’s ending from the very first day. We can only suggest that the terrible ideological fight taking place is an healthy alternative to civil war. It should not be surprising if it get even nastier.
11865 : the reddition of Lee’s Potomac army