THE IDEA OF INDIA

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Saturday, November 26, 2016

Ringside View of an Economist at Washington D. C -2016

Mr. Trump Triumphs; against all odds and against own expectation; a spectacular win indeed! With traces of racial undertones and hordes rural white-supremacists voting in vengeance to eight years of the so called ‘black rule’ of America. Mrs. Clinton is a victim of anti-incumbency -third straight Democratic rule in Washington D.C. The vote has been a close, although Mrs. Clinton has counted more of the poplar votes, the US electoral process has a unique arithmetic specific to each state which gave the coveted the winning total of 270 electoral votes to Mr. Trump. Over all Mr. Trump shifted the electorate to political right and towards the right side of American map. In real political terms this nation is split in the middle the Rural (dominantly Republican) versus the Urban (dominantly Democrat) divide. The urban concentration across the US are characteristically unique due to pluralistic, multi-ethnic and multicultural concentrations in city centers and working spaces.
There are racial undertones of white supremacy; will this fade away or consolidate during Mr. Trumps presidency is yet to be seen.

The major difference between the two candidates beginning the primaries through national election canvassing was ‘predictability’. The case of Mrs. Clinton was most predictable often branded as the third-term of Mr. Obama; whereas almost no one including the media and political pundits could understand what Mr. Trump was talking about; excepting the fact that he clearly knew who was his electorate - rural, predominantly white, relatively more men and less educated. A quick compare -Mrs. Clinton a long time political activists, politician and know the tone and tenor of Washington DC for over 30 years of her professional life; where as Mr. Trump had never been to this place, excepting last about a year when he rehabilitated the old post office headquarters in to Trump-luxury hotel.

Now that a political novice Mr. Trump is the President elect, what can one expect his government, policies and governance looks like. At the moment his ‘Idea of America’ is rhetorical and policies at best opaque. Issues are complex and the answers lie in his desire, ability and competence to control and maneuver the established democratic, economic and social ‘institutions’ of America. Note that there has never been a President placed as powerful, given that both the Senet and House are now in control of the Republicans. Will Mr. Trump be positively guided by both these houses or will he try to subvert and at odds with these legislative institutions is yet to be seen. At the moment predictability quotient on this count is low.

A contrast is in order - in India Mr. Modi did won his office in a somewhat similar style yet the additive arithmetic in Rajya Sabha is in opposition due to lack of numbers. Mr. Trump on the other hand has the advantage of having both houses on the same side as his own. Yet these legislative institutions may become functional in opposing radical and reckless initiatives should Mr. Trump decides to unexplored and uncharted spaces on his own. The separation of power between the executive, legislature and judiciary in the USA is strong and easy to comprehend than in India.

For Mr. Trump, his decision to jump into the race is akin to taking large bets in the expanse of Trump Taj Mahal Casino at Atlantic Ocean (closed since a couple of months). This bet he took and won just like it; does not even know what has he won - a fortune called America, a nation in the forefront since the second world war and an economic power house hosting almost one-fourths of the global market and GDP. Trump jumped in the political bandwagon as if on a bet after exhausting all poker machines at Taj Trump and then has hit a jackpot! All the way during his life he has learned to take risk and overcome it often with the manipulation of laws and utilizing fiscal incentives through insolvencies. Now, will he know as to do what with the booty - the whole of United States, will it be on the betting table? As this Presidency sets in and days go by pertinent questions will be - who is the President Trump? Will his presidency take off at all? (there are protest all over the USA and some are violent). There is also tendency among the winners of the jack-pots to lose almost at the same it was won. A windfall found and lost at the same time.

Predictability of the un-predictable - how will the Trumpism deal with issues of immediate concern, for example, entitlement reforms relating to government administered funds; federal minimum wage policy or differentiated state minimum wages and so on. If deportation of illegal migrants is hastened the real wage rates will blot to unsustainable levels affecting small business and enhancing unemployment rate. Is it possible to achieve a balancing point; building a wall may not be economical in the complex interaction of labor demand, supply and wage rates. Reducing direct taxes specially to favor large business may also impact precarious fiscal balance while the public debt is almost equal to the level of the GDP, about $18 trillion.

The policy watch points and economic emphasis seems to be on restoring crippling infrastructure, followed internal security, trade and environment. major watch points. There will be symbolic pressures for domestic capital to return, for example, the Ford’s Mexico investment; but that will be a kind of end to it; because international capital flows are determined by a very rules of money that Trumpism may still not mature enough to know. Today the US international investments bring in huge profits back home and also create jobs for Americans abroad. Will the coal pits begin to spew carbon, looks like the competition between coal and shale extracted gas will continue?  But the real issue will be revolving around harnessing the Sun that is now mired with state level political corruption. It would be in the interest of the Presidency and the nation that he calls on talent from all across the board irrespective of party leaning. The policies during 2017-2020 will be as good as Mr. Trumps advisers and cabinet selects.


Someone who pass over twice on Constitution Av at the back side of the White House and Pennsylvania Av from in front of the Trump Hotel, to this author, it is clear that Mr. Trump will face serious issues of ‘Conflict of Interest’ with the Presidency and his business interests with potential to destabilize his position in office. Now that the democratic President Mr. Obama and even the failed competitor Mrs. Clinton has offered unconditional support to Mr. Trump; he has to think wise. There are thousands on the street affirming ‘not my president’. This has never happened in the USA before, protest against President Elect. And this will not be the only type of resistance in during the next four years of Trump Presidency.  

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