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We should have seen Trump and Brexit coming

Natalie Holt, journalist with Money Marketing Photo by Michael Walter/Troika

So here we are. In just two months time the world will be watching the inauguration of President Donald J Trump. While it is safe to say not everyone welcomed the outcome of the US election with open arms, politicians and us mere mortals are beginning to, at the very least, come to terms with the prospect of a new and very different leader of the free world.

Hot on the heels of Brexit, the parallels between the two votes are both inevitable and inescapable. The result no-one was expecting. The expected market rout. The impact on global macroeconomic policy. Etc etc.

Whether it is the desire to look for a silver lining, or what fund managers call a “buying opportunity”, global markets have yet to fall through the floor. With the exception of the Mexican peso, obviously.

Fund groups are clinging to the positives: a move towards financial services deregulation for example (whether that is positive for Joe Public is a debate for another day). They also point to the expected investment in infrastructure, proposed tax cuts and other growth-driving policies as reasons to be cheerful.

Both the Trump win and the Brexit vote take us into unchartered territory, though it has been pointed out that while President Trump may be limited to a four-year term, the uncertainty heralded by Brexit is likely to last far longer, particularly with the outcome of the Government’s Article 50 appeal next month.

It has been a year of political shocks. But in hindsight, perhaps we should not be so surprised after all at the turn of events. When you think about it, ever since the financial crash eight years ago we have been lurching from one crisis to the next, what with fears over the break-up of the eurozone (part one), Greece, China, Brexit, and now President Trump. Maybe we should have been better prepared.

Old Mutual Global Investors’ Richard Buxton has an interesting take on all of this. He talks of a shift in power, not from the establishment elite to the people (as Trump would have us believe), but from the central banks to the politicians. It may be the likes of President-elect Trump and Prime Minister Theresa May who start calling the shots and moving markets, rather than Carney, Yellen et al. Perhaps that is the scariest thought of all.

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Unfortunately political correctness, politeness, the fear of being shouted down and called an elitist or snob forces the press and informed opinion to be circumspect instead of telling it how it is.
    The slow inexorable dumbing down we have witnessed in society over the past 30 years or so has now reached a zenith and it isn’t the meek who have inherited the earth but a coalition of the stupid, the ignorant, the xenophobic and the chancers.

    It is no coincidence that many are comparing this era to the 1930’s. I just hope that the saying “Those who fail to learn from history are doomed to repeat it” doesn’t come true in my lifetime.

    • Hear! Hear!
      Absolutely spot on! To despair at these results spurred by the forces Harry lists is not in any sense elitist.
      When referendums and elections are won by those who have the nerve to tell the biggest lies, and get away with it, it bodes ill for the future of society and democracy, and of course it won’t be the liars and the chancers who pay the price, but those who have been taken in by them.

  2. Well said Harry Katz

  3. Sorry Harry but I have to disagree, with some of what you say. I would suggest that it is precisely the very narrow, PC-driven view of the world that dominates the press that means that the only issues that are ‘told as it is’ as those that suit that particular agenda and anyone who dares to disagree is actually labelled with the various epithets. The famous journalist and broadcaster Ed Murrow, instrumental in bringing down Senator McCarthy in the US, said “television is the opiate of the people” – it suits the political, business and media elites to dumb down society to control it and their recent angst is their reaction to have their complacency rattled. Perhaps if they want to avoid such future upsets then they should read Animal Farm which Orwell wrote as a criticism of left-wing dictatorships while Britain was fighting on the same side with the USSR in the WWII ! I would suggest their perceived ‘downfall’ (arguable to say the least) would be quickly reversed if they first understood and respected the sincerely and thoughtfully held opinions of people who disagree with them. The real problem is we are pushed to believe everything is black and white nowadays but we live in a ‘universe of grey’!

  4. On Today this morning there was a piece about how we have moved from ‘spin’ in politics to ‘post truth’…..

    As to not seeing it coming – I’m not so sure. Its not just history that repeats itself, but the politics that follow that history.

  5. Yes Pauline but whose ‘post-truth’ that’s the question, is the coin heads or not tails? Would those who say everything is ‘post-truth’ now have said the same if it was a Bremain/Clinton ticket? Can anyone say that they have never been not been disappointed in the promises made to them? Just saying :0

  6. @ Harry.
    It was those in the ‘remain’ camp who are the xenophobes Harry. Those in the ‘leave’ camp wish to trade with the 7+ billion people who do not live in the EU. They/we are looking to broaden our trading arrangements.
    As to not seeing this coming an MP friend of mine told me back in June that Trump would win, while he was campaigning for a leave vote.

  7. @ John Harding

    So the Brexiters are not xenophobes – well that’s an opinion I hadn’t come across before. Odd that thr BNP were fervent supporters. What about having too many of the stupid, the ignorant and chancers in the camp?

  8. And there were no stupid, ignorant chancers who voted to remain, not one Bremainer who voted out of pure self-interest but only for the good of the country? Come on Harry I am sure you are fair-minded enough that you don’t believe that! One question for you, is do you still believe that the referendum was a vote to leave or keep the status quo after all that has been said by Brussels since June (and before – but very quietly)?

  9. No, I will concede that of course not all remainers were great intellects. But I will dispute that self- interest was a major factor. Sure if you count the young and others who wanted to be able to travel and work freely in Europe as having self-interest – then yes. But in the Brexit camp how can you say it was all for the good of the country. Boris being the prime example of one who saw it as an opportunity to climb the greasy pole. And others? All selfless patriots no doubt? There was self-interest on both sides. But in the Brexit camp ignorance reigned for the many and the fellow travellers were enough to make a strong man blanch.

    I will repeat what I have said previously and every day seems to reinforce the view – the current world situation is redolent of the 1930’s. Those who originally excoriated Trump are now seeking to be obsequious – just like those in Germany after Hitler was elected. Those that spoke out against were soon marginalised and eventually liquidated. The rabble rousers now have hegemony – and that includes Farage.

    Yes – I am nervous.

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