Reflections on the US Election

Here are a few thoughts on the Presidential election in no order of importance.

• Trump is a left wing politician with left wing policies by the main.
• I do not believe Trump ever thought about becoming President. His boorish behaviour and his pitiful excuses about if he lost tells me he never thought he would win.
• Trump is in a poor electoral position. He lost the popular vote. The vote was the smallest for some time. I think we can say the Clinton camp was complacent about the black and Latino vote in the rustbelt and about women who had been to college. We also had people  just like in Brexit who thought the vote was in the bag and so didn't turn up on the day.  see Nate Silver 
• Markets fell drastically on the news but then rose just as dramatically. this occurred because they both heard a very different Trump but his spokesman essentially said they were walking away from some sort of force who would find all undocumented migrants and send them back to the country of origin. Markets took this to mean all stupid policies would be discarded.
• There will be a battle with the Fed. Remember the Reagan Government took to sniping at Paul Vollker and saying inflation at 4% was more than enough. See Carola Binder on a potential fight. The Fed will have to raise rates perhaps quickly given Trump's inflationary program
• Reagan was also a proctectionist but moderately so and markets are assuming Trump will go the Reagan route on protection 
• We still have no idea of whom will take the important cabinet positions.
• I think we can assume the blowing of the deficit wil occur. Republican regularly do this if it means cutting taxes. They have no idea if you cut taxes but not spending you increase the structural deficit . Reagan did this  as did Bush.Trump also has significant spending proposals. Infrastructure is not a worry but the increases in recurrent spending on the military side.
• I suspect all the talk of deregulation on the banking sector will dissipate. All those working class voters will not be impressed by boosting bank profits with their pay packets going nowhere.
• I also think Trump will find problems with his voting base when he walks away with all those mad policies. Building a wall, putting Clinton in gaol, stopping all muslim immigration, slapping a 45% tariff on all chinese goods.

We shall see

Ross Gittins on the money, As is Kruggers now