Why Trump is teaching the Establishment a lesson…

Trump has started with few surprises. Shocking cabinet picks, drill baby drill initiatives, soldiers sent to police the borders and pardons for the Jan 6th rioters, some of which undertook serious acts of violence. People died.

Yawn… I braced myself for all this the moment he got elected. Perhaps only the fawning tech bro oligarchs got to me. Best to keep calm and carry on.

He mostly fails to surprise – his actions are ‘priced-in’…

And yet, how has it come to this?

Answer: because a complacent, arrogant Democrat and moderate Republican establishment let it happen. It reminds me of the complacency of the Tory Left before Thatcher swept through the Conservative Party.

Uncontrolled immigration, inflation, erosion of industries in the ‘flyover’ states, excessive political correctness culminating in defund the police initiatives (just look at how San Francisco was governed), and intrusive federal bureaucracy. Yet a deaf ear was turned to all of this.

Biden did many good things about which he failed to communicate, but in particular ignored the consequences of inflation and illegal immigration. Harris had no guiding philosophy except not to be Trump. The likes of Obama and Clinton continued to patronise voters backed up by Hollywood celebrity endorsements. Even I was in despair at the end of the campaign.

Core voters need core policies and blunt communications to make them understand politicians get it and will move the dial to make their lives better. Sometimes, if that means playing to some of their prejudices, so be it. Trump got that. The Establishment didn’t.

Trump will do a few consequential things domestically, but not many. He probably has a two year window at best, and checks and balances (yes, they still exist) will slow him down.

Internationally, where he has four years of relatively unfettered power, Trump could be a disaster over China, Russia, NATO, and free trade.

Personally, I have always thought character matters in politics. Ultimately, this is a guide to whether a politician is a good person who really cares about voters’ concerns. Trump, a convicted felon, a fraud, does not, but he might just get some things done the Establishment thought was beneath them.

In Europe as in the US, moderates should learn from Trump and start listening to core voters. Otherwise, Trumps will spring up and win elections everywhere. Not because they are liked by most voters but because out of frustration, they appear a better option for getting things done.

Why Trump is teaching the Establishment a lesson…

Trump has started with few surprises. Shocking Cabinet picks, drill baby drill initiatives, soldiers sent to police the borders and pardons for the Jan 6th rioters, some of which undertook serious acts of violence.  People died.

Yawn… I braced myself for all this the moment he got elected. Perhaps only the fawning tech bro oligarchs got to me. Best to keep calm and carry on.

He mostly fails to surprise – his actions are ‘priced-in’…

And yet, how has it come to this?

Answer: because a complacent, arrogant Democrat and moderate Republican establishment let it happen. It reminds me of the complacency of the Tory Left before Thatcher swept through the Conservative Party.

Uncontrolled immigration, inflation, erosion of industries in the ‘flyover’ states, excessive political correctness culminating in defund the police initiatives (just look at how San Francisco was governed), and intrusive federal bureaucracy. Yet a deaf ear was turned to all of this.

Biden did many good things about which he failed to communicate, but in particular ignored the consequences of inflation and illegal immigration. Harris had no guiding philosophy except not to be Trump. The likes of Obama and Clinton continued to patronise voters backed up by Hollywood celebrity endorsements. Even I was in despair at the end of the campaign.

Core voters need core policies and blunt communications to make them understand politicians get it and will move the dial to make their lives better. Sometimes, if that means playing to some of their prejudices, so be it. Trump got that. The Establishment didn’t.

Trump will do a few consequential things domestically, but not many. He probably has a two year window at best, and checks and balances (yes, they still exist) will slow him down.

Internationally, where he has four years of relatively unfettered power, Trump could be a disaster over China, Russia, NATO, and free trade.

Personally, I have always thought character matters in politics. Ultimately, this is a guide to whether a politician is a good person who really cares about voters’ concerns. Trump, a convicted felon, a fraud, does not, but he might just get some things done the Establishment thought was beneath them.

In Europe as in the US, moderates should learn from Trump and start listening to core voters. Otherwise, Trumps will spring up and win elections everywhere. Not because they are liked by most voters but because out of frustration, they appear a better option for getting things done.

2025 may surprise on the upside…

My uncharacteristic mild optimism may only be due to too many right-wing commentators reading the last rites for liberal democracy. But there you go. They, rather than me, might be disappointed…

It is time for 2025 predictions but also to review those for 2024. Umm…

  • The Tories will go down to a heavy defeat, possibly even annihilation – an easy tick
  • The Tories will move further to the Right after the election – tick
  • Trump will not win the presidency… to be fair this prediction was changed in June after Biden’s disastrous debating performance but still… – a rather large cross
  • The populist Right will make gains in Italy, Germany and France – tick
  • Putin will win in Russia (tongue in cheek!) and Modi in India. Modi lost his populist majority but governs in a coalition – tick
  • The war in Ukraine will grind on but Western resolve will hold up – tick
  • Netanyahu will not survive the year as Israel’s Prime Minister – cross

2025 will be a bumpy year, but perhaps not as bad as expected...

Five out of seven predictions were correct, but I would have sacrificed them all just to be right about Trump. Hey, ho. Perhaps I underestimate the attraction of populists.

So why some optimism for 2025? Well, mainly because populist support has been ‘priced in’, and too many people are dancing too heavily on the grave of moderates. Here we go:

  1. Trump will not be the all-conquering extremist many predict and may surprise on the upside. Janan Ganesh from the Financial Times at my Company’s investment seminar last November predicted Trump would be uncontrollable simply because he doesn’t face re-election. I am not so sure. Despite a largely competent start in picking his rather extreme Cabinet, he probably only has two years to make a difference before Congressional elections give back the House to the Democrats (an early 2026 prediction). As argued before, many of his policies are contradictory, his Cabinet is likely to be ineffectually chaotic, he has softened on Ukraine (though right to challenge Europe on defence expenditure), he might just want to be a little more popular in his final years or may simply lose interest in governing radically or governing at all.
  2. Labour will have a torrid time (its communications skills are still hopeless), but it has four years, and glimmers of progress towards its targets will appear by the end of 2025. The UK will appear a beacon of stability internationally, and this will ultimately benefit the government.
  3. Starmer will lead Labour throughout 2025 and into the next General Election despite mutterings.
  4. Reform UK will have a strong year but are close to peaking. Don’t underestimate the hostility of a large proportion of the electorate towards Farage and the likes of his backers such as Trump/Musk. Although Farage and Musk now appear to have fallen out. What a shame.
  5. The Tories will have a terrible year and will flatline in the polls. Badenoch has not found her feet yet and seems to have forgotten the Tories’ way back to power is to regain their reputation for economic competence. Too early, I know, but she is unlikely to lead her Party into the next General Election. Such turmoil in the main opposition party will benefit Reform but also Labour.
  6. It is too early to predict events in France although things do not look promising but there will be better news in Germany. The unstable largely left-wing coalition will be heavily defeated in February, ushering in a centre-right CDU/CSU coalition government despite the rise of the extreme AfD.
  7. A miserable year for China. Slowing growth, a possible trade war with the US and Xi’s dominance starting to grate across the country means there will be no move on Taiwan despite bellicose noises. China simply cannot afford the economic consequences, particularly when they are also losing ground to their unfriendly neighbour, India.
  8. Not least Russia/Ukraine. See first prediction above. Trump will eventually force a tougher peace solution on Putin over Ukraine than Putin wants. Putin is winning the war but at great human and economic cost. A Trump led ‘solution’ will probably involve greater support for Ukraine from Europe, guarantees on borders, but not fully on Ukraine’s terms and no NATO membership. It is 50/50, whether the war ends this year. Even this blog knows when not to put your neck out…
  9. Lastly, the Middle East. The war in Gaza will end this year but on Israel’s terms.

That’s it folks. A roller coaster of a year but optimism is based on the fact that progress towards the death of liberal democracy will stall…

Happy New Year!