The weeks since Donald Trump’s inauguration have been chaotic. Nearly every day has seen new issues, from attacks on the media to battles over immigration. The president’s low approval ratings are almost unprecedented. It’s all too easy to be despondent.
Yet every cloud has a silver lining. It may be hard at first to see this. Here’s five ‘reasons to stay positive’.
Over two centuries ago, the founders of the American Republic designed a very careful set of checks and balances, based on a clear separation of powers between the three arms of government – legislative (Congress), executive (President) and the judiciary (the courts). Underlying all that is a written constitution which has endured and remains the benchmark against which any legislative or executive decision is tested. As Donald Trump found only a few weeks ago with the temporary suspension of his travel ban, there are very real limitations on his ability to impose arbitrary decisions. Paradoxically, the appointment of a ninth judge, likely conservative, will only accentuate this – conservative judges tend to uphold the Constitution even more fiercely than their more liberal peers.
Many of Trump’s decisions and policy views show he is on the wrong side of history. The last few decades have seen great progress towards a more just and equal society, in everything from the environment to the rights of minorities. The tide of demographics in the US is irresistible towards a greater importance of non-whites, young people and women. Trump’s policies are in many respects the last gasp of an older way of viewing the world.
US businesses also generally accept things such as climate change, and their innovation and business approach imposes a logical limit on Trump’s impact. For example, Elon Musk’s power cell batteries represent a fundamental change towards a future less based on traditional fossil fuels, and no governmental decisions are going to alter this. As Saudi Arabia's Sheikh Yamani famously said in the 1970s, “the Stone Age did not end because of a lack of stone”.
Trump has well articulated the needs of a significant group of people – the disaffected, the marginals, the “left behinds” who feel isolated and threatened. This group even has a term – the “precariat”. As events elsewhere such as Brexit have shown, the challenge for society is to include everyone, and work out how to ensure we all benefit from progress and change. By highlighting their issues before things become worse, Trump has done is all a major favour.
Trump’s approaches and policies may have antagonised many, but have also energised large numbers of people to stand up for common issues and concerns. By pushing reactionary approaches and blinkered thinking, Trump has given a large number of people a reason to stand up for what they believe in - a better world.
Trump may temporarily take the US back in time, but the rest of the world has moved on. Climate change is acknowledged reality, with most nations fully on board with mitigation efforts; this will continue regardless. From an economic perspective, US actions and Trump's isolationist view will have a short-term negative impact on things such as GDP, trade and interest rates, but the US economy is also not so dominant in the world as it once was, with the rise of China, India and other countries.
Whenever there’s been a sharemarket drop and clients have expressed concerns, I point out that we don’t invest in share markets – we invest in companies. And companies make stuff and do stuff that we buy. Whatever happens, people wake up in the morning, eat their breakfast, drive their cars, buy groceries, and go out to be entertained. They fall in (and out of) love, do things with family and friends, live and laugh. The same thing applies to life in 2017 under the current president – Trump or no Trump, life goes on.
It may seem we are in darkness. But every cloud has a silver lining, and the sun will rise tomorrow..
Success as an investor starts with the key questions of why, what, where, when and how.
Recently, one of America’s largest life insurers (New York Life) did a survey of over 2,000 people to find out what they considered to be their largest financial mistakes, and how long it took to recover from them.
Rob and Mary