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The Post-Trump Era Is About To Begin—Buckle Up

Summary:
President Donald Trump will leave the White House on Jan. 20, perhaps sooner if growing efforts to unseat him in the remaining days of his presidency come to fruition. Whatever happens over the next two weeks, the economic and social forces that helped elect Trump aren’t going away. In fact, there’s a distinct possibility that those forces will strengthen and broaden in the months and years ahead. In turn, political and economic uncertainty may increase, in ways that have yet to be fully understood or recognized. For the immediate future, the Trump presidency is ending in chaos. That’s saying something given the administration’s norm-breaking habits of the past four years. It appears that Trump’s actions on Jan. 6 crossed a line that many of his most arduous supporters in

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President Donald Trump will leave the White House on Jan. 20, perhaps sooner if growing efforts to unseat him in the remaining days of his presidency come to fruition. Whatever happens over the next two weeks, the economic and social forces that helped elect Trump aren’t going away. In fact, there’s a distinct possibility that those forces will strengthen and broaden in the months and years ahead. In turn, political and economic uncertainty may increase, in ways that have yet to be fully understood or recognized.

For the immediate future, the Trump presidency is ending in chaos. That’s saying something given the administration’s norm-breaking habits of the past four years. It appears that Trump’s actions on Jan. 6 crossed a line that many of his most arduous supporters in Congress and elsewhere deemed a bridge too far. Although the core of the Trump base is still intact outside of the Washington Beltway, and perhaps more committed than ever, a growing number of Republicans – in the administration and in Congress – are bailing on the president in the wake of the riots that erupted at the Capitol on Wednesday.


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Meanwhile, whatever veneer of deference the Democrats had mustered toward Trump prior to Jan. 6 has given way to active efforts to remove the president from office–again. Speaker of the House Nancy Pelosi spoke for party yesterday when she said that “while it’s only 13 days left, any day can be a horror show for America.” She added that Trump committed a “seditious act” on Wednesday when he incited his supporters, in an outdoor, midday speech near the Capitol, to march in support of false claims that the election had been stolen from him and so they should make a stand for his presidency. Chaos (and several deaths) followed as Trump supporters stormed the Capitol and temporarily shut down efforts to formally certify Biden’s election victory.

In a sign of how much former support for Trump has evaporated, the conservative editorial page of The Wall Street Journal advises: “The best outcome would be for him to resign to spare the US another impeachment fight.”

However the current political crisis plays out, this much is clear: the socio-economic forces that lifted Trump to power aren’t going away when the president exits the political stage on Jan. 20 (or earlier). In fact, it’s likely that much of his political remaining support in the electorate will intensify among his ardent fans. In turn, the incoming Biden administration will have to walk a fine line between working with the progressive wing of the Democratic party and navigating the extreme unrest that continues to pulse throughout the tens of millions of Trump supporters across the country.

Although the political fallout from the riots at the Capitol on Wednesday will continue in the days and weeks to come, the bigger challenge for the country is deciding how to heal the growing political chasm that animates the electorate and threatens the country’s stability. 

The socio-economic forces that led us to this point have been decades in the making and in some respects the factors that brought Trump to power are more powerful (and uncertain) than ever. As George Friedman (founder and chairman of Geopolitical Futures) writes in last year’s The Storm Before the Calm: America’s Discord, the Coming Crisis of the 2020s, “a series of deep structural changes are taking place in the United States, and these changes are creating profound stresses.”

The federal government is undergoing a periodic shift in which its operations and traditional relationships to society are changing. That shift is driven by increasing failure in the system. Simultaneously, the economic system is undergoing a fundamental shift driven partly by an excess of money and limited opportunity for investment. This in turn results in a massive decline in productivity growth due to a falloff in innovation. Between these two stresses, and the pressure that emerged from the United States trying to find its balance in the global system, the glue that was holding American society together has weakened and will continue to decline throughout the 2020s. And regardless of who is president, fear and loathing will stalk the land for another decade.

That fear and loathing was on prominent display in video that captured portions of the riot on Wednesday. As The New York Times observes, “some of those who had also surged forward in the crowd seemed to show a bewildered wonder at what they were seeing in front of them. A few remarked on the opulence of the Capitol building and offices, a quality that seemed to confirm their suspicions about the corruption of Washington.”

As people rushed inside, there was a strange mix of confusion and excitement, and the almost complete lack of police presence in the beginning amplified the feeling of lawlessness. They gawked at a place of wealth and beauty, adorned with art and marble, a domain of the powerful, and for a short while on Wednesday afternoon, the rioters were in control. For once, they felt, they could not be ignored.

At its core, the challenge in the months and years ahead is economic. The ongoing decline in career opportunities for the working class is a freight train with no obvious solution in sight. In the current climate, this decades-long crisis is accelerating. One need only look to the ongoing surge in weekly jobless claims to recognize the depth of the economic calamity. Although the number of newly filed unemployment claims has pulled back from the initial spike in the spring, the 700,000-plus increase in claims, week after week, exceeds the peaks in previous recession and is a constant reminder that the US labor market remains severely stressed.

The Washington Consensus and like-minded policies that dominate economic thinking in the 21st century offer few if any satisfying answers to the ongoing carnage in the US labor force and the long-running decimation of opportunity for unskilled and low-skilled workers struggling to earn a living. To be fair, there are no easy or quick solutions. Regardless, the economic stress will continue, exacerbated by a global pandemic and a deep political divide in America.

Donald Trump will soon leave the White House. But the US socio-economic challenges will continue to fester. Although Trump talked a big game about addressing some of these issues, he success rate is low at best. In fact, he made the crisis worse with ham-handed decisions that seemed designed to appease and placate a tiny minority of extremist supporters at the expense of genuine progress for the nation as a whole.

The arrival of Joe Biden as president, with Democratic control of both chambers of Congress, is a breath of fresh air and potentially a game-changing shift that will bring a productive path forward. But the honeymoon ended before it even started and expectations and need are sky high. The hour is late and the challenges are grave. But, hey, no pressure.


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By James Picerno


James Picerno
James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator.

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