“November always seemed to me the Norway of the year.”
Emily Dickinson (1830-1886)
Apart from the Cubs winning the World Series, the biggest news of the month was Donald Trump winning the Presidency.
The surprise was not that Republicans won, the surprise was that the Presidential race was as close as it was. A year and a half ago, when the race began to heat up, it was apparent, despite Mr. Obama’s personal popularity, that many of his policies were not working. The economy was sputtering along at the slowest growth rate in the post-War period. Federal debt had doubled to just under $20 trillion, while unfunded liabilities (Medicare, Medicaid, Social Security, etc.) had risen from $56 trillion to an estimated $100 trillion in 2016. Debt and entitlement obligations have compounded at 9% over the past eight years. GDP (the nation’s income) has compounded at two percent. When debt expands faster than income, bad things happen. Racial animosities have intensified. Internationally, Russia and China were in ascendancy and the Middle East in shambles. Islamic terrorism showed no signs of abating. Democrats were set on crowning an ethically challenged woman, an individual who epitomized a corrupt Washington establishment and a notoriously poor campaigner to boot. It was expected to be a “Republican year.” Eighteen months later the situation had not improved. What an opportunity for Republicans!
But, in nominating Mr. Trump – the most non-political Presidential nominee ever – Republicans almost blew it. While Trump appealed to vast numbers of working Americans who no longer felt they had access to the American dream, his character was alien to what many people thought proper for a President. But we underestimated the degree of estrangement so many felt toward a government that had practiced identity politics, favored a few special interests and had grown distant from a majority of the American people. Trump’s instincts were more acutely attuned than those of political professionals. He did win, and Republicans held the Senate and the House. Additionally, they control 33 governorships and 32 State Legislatures. While the country remains split, his support was far broader than most Democrats would have one believe. The great irony is that it may take a strong and independent leader to re-energize Congress into resuming its traditional role, as a body that is supposed to check excesses in the Executive, and to work through the ideological posturing that sometimes holds government hostage. Since winning, Mr. Trump’s policy determinants have begun to take shape. The most consequential response – apart from protesters and cries of denial – has been a rise in optimism: Since November 7, the DJIA has risen 4.7%, the U.S. Dollar is up 3.9% and the University of Michigan Consumer Index rose from 87.2 in October to 93.8 in November. It is the prospect of tax and regulatory reform that has the juices flowing.