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Old 11th November 2016, 16:27
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The Trump Era

America’s new president - The Trump era
His victory threatens old certainties about America and its role in the world. What will take their place?
Nov 12th 2016 THE ECONOMIST

THE fall of the Berlin Wall, on November 9th 1989, was when history was said to have ended. The fight between communism and capitalism was over. After a titanic ideological struggle encompassing the decades after the second world war, open markets and Western liberal democracy reigned supreme. In the early morning of November 9th 2016, when Donald Trump crossed the threshold of 270 electoral-college votes to become America’s president-elect, that illusion was shattered. History is back—with a vengeance.

The fact of Mr Trump’s victory and the way it came about are hammer blows both to the norms that underpin politics in the United States and also to America’s role as the world’s pre-eminent power. At home, an apparently amateurish and chaotic campaign has humiliated an industry of consultants, pundits and pollsters. If, as he has threatened, President Trump goes on to test the institutions that regulate political life, nobody can be sure how they will bear up. Abroad, he has taken aim at the belief, embraced by every post-war president, that America gains from the often thankless task of being the global hegemon. If Mr Trump now disengages from the world, who knows what will storm through the breach?

The sense that old certainties are crumbling has rocked America’s allies. The fear that globalisation has fallen flat has whipsawed markets. Although post-Brexit Britons know what that feels like, the referendum in Britain will be eclipsed by consequences of this election. Mr Trump’s victory has demolished a consensus. The question now is what takes its place.

Trump towers
Start with the observation that America has voted not for a change of party so much as a change of regime. Mr Trump was carried to office on a tide of popular rage (see article). This is powered partly by the fact that ordinary Americans have not shared in their country’s prosperity. In real terms median male earnings are still lower than they were in the 1970s. In the past 50 years, barring the expansion of the 1990s, middle-ranking households have taken longer to claw back lost income with each recession. Social mobility is too low to hold out the promise of something better. The resulting loss of self-respect is not neutralised by a few quarters of rising wages.

Anger has sown hatred in America. Feeling themselves victims of an unfair economic system, ordinary Americans blame the elites in Washington for being too spineless and too stupid to stand up to foreigners and big business; or, worse, they believe that the elites themselves are part of the conspiracy. They repudiate the media—including this newspaper—for being patronising, partisan and as out of touch and elitist as the politicians. Many working-class white voters feel threatened by economic and demographic decline. Some of them think racial minorities are bought off by the Democratic machine. Rural Americans detest the socially liberal values that urban compatriots foist upon them by supposedly manipulating the machinery in Washington (see article). Republicans have behaved as if working with Democrats is treachery.

Mr Trump harnessed this popular anger brilliantly. Those who could not bring themselves to vote for him may wonder how half of their compatriots were willing to overlook his treatment of women, his pandering to xenophobes and his rank disregard for the facts. There is no reason to conclude that all Trump voters approve of his behaviour. For some of them, his flaws are insignificant next to the One Big Truth: that America needs fixing. For others the willingness to break taboos was proof that he is an outsider. As commentators have put it, his voters took Mr Trump seriously but not literally, even as his critics took him literally but not seriously. The hapless Hillary Clinton might have won the popular vote, but she stood for everything angry voters despise.

The hope is that this election will prove cathartic. Perhaps, in office, Mr Trump will be pragmatic and magnanimous—as he was in his acceptance speech. Perhaps he will be King Donald, a figurehead and tweeter-in-chief who presides over an executive vice-president and a cabinet of competent, reasonable people. When he decides against building a wall against Mexico after all or concludes that a trade war with China is not a wise idea, his voters may not mind too much—because they only expected him to make them feel proud and to put conservative justices in the Supreme Court. Indeed, you can just about imagine a future in which extra infrastructure spending, combined with deregulation, tax cuts, a stronger dollar and the repatriation of corporate profits, boosts the American economy for long enough to pacify the anger. This more emollient Trump might even model himself on Ronald Reagan, a conservative hero who was mocked and underestimated, too.

Nothing would make us happier than to see Mr Trump succeed in this way. But whereas Reagan was an optimist, Mr Trump rails against the loss of an imagined past. We are deeply sceptical that he will make a good president—because of his policies, his temperament and the demands of political office.

Gravity wins in the end
Take his policies first. After the sugar rush, populist policies eventually collapse under their own contradictions. Mr Trump has pledged to scrap the hated Obamacare. But that threatens to deprive over 20mil hard-up Americans of health insurance. His tax cuts would chiefly benefit the rich and they would be financed by deficits that would increase debt-to-GDP by 25 percentage points by 2026. Even if he does not actually deport illegal immigrants, he will foment the divisive politics of race. Mr Trump has demanded trade concessions from China, Mexico and Canada on threat of tariffs and the scrapping of the North American Free Trade Agreement. His protectionism would further impoverish poor Americans, who gain more as consumers from cheap imports than they would as producers from suppressed competition. If he caused a trade war, the fragile global economy could tip into a recession. With interest rates near zero, policymakers would struggle to respond.

Abroad Mr Trump says he hates the deal freezing Iran’s nuclear programme. If it fails, he would have to choose between attacking Iran’s nuclear sites and seeing nuclear proliferation in the Middle East. He wants to reverse the Paris agreement on climate change; apart from harming the planet, that would undermine America as a negotiating partner. Above all, he would erode America’s alliances—its greatest strength. Mr Trump has demanded that other countries pay more towards their security or he will walk away. His bargaining would weaken NATO, leaving front-line eastern European states vulnerable to Russia. It would encourage Chinese expansion in the South China Sea. Japan and South Korea may be tempted to arm themselves with nuclear weapons.

The second reason to be wary is temperament. During the campaign Mr Trump was narcissistic, thin-skinned and ill-disciplined. Yet the job of the most powerful man in the world constantly entails daily humiliations at home and abroad. When congressmen mock him, insult him and twist his words, his effectiveness will depend on his willingness to turn the other cheek and work for a deal. When a judge hears a case for fraud against Trump University in the coming weeks, or rules against his administration’s policies when he is in office, he must stand back (self-restraint that proved beyond him when he was a candidate). When journalists ridiculed him in the campaign he threatened to open up libel laws. In office he must ignore them or try to talk them round. When sovereign governments snub him he must calculate his response according to America’s interests, not his own wounded pride. If Mr Trump fails to master his resentments, his presidency will soon become bogged down in a morass of petty conflicts.
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Old 11th November 2016, 16:28
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Trump Era Part 2

The third reason to be wary is the demands of office. No problem comes to the president unless it is fiendishly complicated. Yet Mr Trump has shown no evidence that he has the mastery of detail or sustained concentration that the Oval Office demands. He could delegate (as Reagan famously did), but his campaign team depended to an unusual degree on his family and on political misfits. He has thrived on the idea that his experience in business will make him a master negotiator in politics. Yet if a deal falls apart there is always another skyscraper to buy or another golf course to build; by contrast, a failure to agree with Vladimir Putin about Russia’s actions leaves nobody to turn to. Nowhere will judgment and experience be more exposed than over the control of America’s nuclear arsenal—which, in a crisis, falls to him and him alone.

The pendulum swings out
The genius of America’s constitution is to limit the harm one president can do. We hope Mr Trump proves our doubts groundless or that, if he fails, a better president will be along in four years. The danger with popular anger, though, is that disillusion with Mr Trump will only add to the discontent that put him there in the first place. If so, his failure would pave the way for someone even more bent on breaking the system.

The election of Mr Trump is a rebuff to all liberals, including this newspaper. The open markets and classically liberal democracy that we defend, and which had seemed to be affirmed in 1989, have been rejected by the electorate first in Britain and now in America. France, Italy and other European countries may well follow. It is clear that popular support for the Western order depended more on rapid growth and the galvanising effect of the Soviet threat than on intellectual conviction. Recently Western democracies have done too little to spread the benefits of prosperity. Politicians and pundits took the acquiescence of the disillusioned for granted. As Mr Trump prepares to enter the White House, the long, hard job of winning the argument for liberal internationalism begins anew. The Trump era | The Economist
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Old 11th November 2016, 16:38
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Slumponomics - Trump and the political economy of liquidity traps
Nov 10th 2016, 17:41 by R.A. | WASHINGTON THE ECONOMIST

AFTER the Brexit referendum and the election of Donald Trump, and the subsequent market reactions, I think we are closing in on a decent theory of the way liquidity traps end.

That might be going too far. Markets have not had that much time to process the American election outcome, and what time they have had has sent some mixed signals. Yet among the clearest market moves since the morning of November 9th has been a sharp drop in Treasury prices, accompanied by a sharp rise in implied inflation expectations as determined from inflation-protected Treasury securities. Now: sharp is relative. But markets are showing signs of that they expect reflation under Mr Trump. And they have reason to. Mr Trump seems keen on massive tax cuts and a big increase in government spending (on defence, and perhaps also on infrastructure). Mr Trump might just represent macroeconomic regime change.

Let's back up. The theory of liquidity traps first began to develop in the 1930s, when John Hicks picked up where John Maynard Keynes left off, in response to events of the Depression. Keynes explained that when an economy was operating at less than full employment, then a rise in government borrowing could generate a large boost in employment for a small rise in interest rates; rather than crowding out private investment, it would generate more investment by private firms by raising national income. Hicks built on this; when the real interest rate fell to zero and could not be reduced any more, he noted, then expansions in the money supply would cease to be stimulative and fiscal stimulus would be necessary to get the economy moving.

Economic work on the liquidity trap was revived in the late 1990s, when Japan showed that such traps could develop in the modern era. Paul Krugman found, for instance, that monetary policy could be used to escape the trap, provided that the central bank could credibly promise to tolerate high inflation in future. But for central banks to tolerate high inflation at any time is a big ask, and promising it in future is especially hard given the problem of time inconsistency: the high inflation in future would necessarily occur at a time when the economy had managed to escape the trap, at which time the central bank (having gotten the economy out of trouble) would find it tough to resist its natural urge to tighten. What's more, a central bank acting independently to promise high inflation future would risk its independence unless it could be very confident that political leaders were behind it. Which is to say: without clear political support, a big shift in monetary policy is both unlikely to occur in the first place, and unlikely to be seen as credible if, by some chance, it does. Hence, the trap stays the trap.

That leaves fiscal policy. But as Mr Krugman has written in the context of the Great Recession, both fiscal and monetary policy measures might be subject to a "timidity trap". If policy measures, like asset purchases or fiscal stimulus, fail to push an economy all the way out of the liquidity trap, then they may end up discrediting such measures politically, even if they were successful at raising growth relative to a hypothetical no-stimulus case. Most economists reckon that Mr Obama's $800 billion stimulus raised growth above where it otherwise would have been. It didn't get America out of the low-rate, low-growth slump entirely, however, which allowed Mr Obama's critics to argue, persuasively if not correctly, that the stimulus had not worked at all.


Escaping the liquidity trap means engineering a dramatic rise in expectations for future demand growth. It means a clear departure from past practice: a regime change. And whether the tool used to engineer the shift in expectations is monetary or fiscal, it cannot occur without strong political support.

Now we have a story about the lifespan of a liquidity trap. Once an economy finds itself in one it stays in it until some external force drags it out, or until there is a political change—a break with the past—which enables a macroeconomic regime change. Does this story fit the historical facts? I think so, mostly. In the 1930s, economies got out of their traps when a change in governance led to a abandonment of usual gold-standard monetary-policy practice and/or when the demands of rearmament led to a change in macroeconomic policy. Japan, the first country in the modern era to fall into the liquidity trap, is as close as it has ever been to escaping thanks to the bold economic policies of Shinzo Abe, an elected leader. Brexit, and the choices made by the conservatives under Theresa May, constitute a sharp break with past policy, which has led to a big drop in sterling and a significant rise in expected inflation. Then there is Mr Trump, who might be about to deliver a deficit-financed stimulus. Meanwhile, the other economies stuck in the trap remain stuck.

A key difference between the latter two examples and the earlier ones is that neither Brexit or Trumpism were explicitly about reflating the economy and escaping the slump, in the way that Franklin Roosevelt's decision to leave gold and Mr Abe's Abenomics were. It might therefore be best to characterise Brexit and the American election as political shifts which create the possibility of an escape from the trap, which the respective governments might or might not seize. In America, seizing that opportunity might require the application of pressure on the Federal Reserve. Inflation expectations are not the only thing which has moved since Tuesday; markets reckon the chance of multiple rate hikes in 2017 has also gone up. It does seem important, however, that both of these events are expressions of political radicalism which occurred during slump conditions, and which seem to create the possibility of a departure from those slump conditions. Slump, radicalism, exit seems like something of an historical motif.

Muddling along is a good-enough way to deal with lots of messes, but it is no way to deal with a liquidity trap. Muddling through will continue until the political system can't bear it any more or the outside world forces a change (and history suggests that either endpoint can be very messy). With so many economies now stuck in liquidity traps, it more political shocks seem inevitable. Europe, I would say, will eventually get out of its liquidity trap. Its escape won't be pretty.
Comments on Slumponomics: Trump and the political economy of liquidity traps | The Economist
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Old 11th November 2016, 17:37
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The world economy - Our election, your problem
A Trump presidency will be bad for the world economy and worse for places outside America
Nov 12th 2016 THE ECONOMIST

IT IS not clear precisely how Donald Trump will govern, the extent to which he will carry out some of his scarier promises on trade and immigration, and who will be his economics top brass at the Treasury and in the White House. But a decent first guess is that President Trump will be bad for the world economy in aggregate; and a second is that his actions are likely to do more harm, in the short term at least, to economies outside America.

When America has in the past stepped aside from its role at the centre of the global economic system, the damage has spread well beyond its borders. In 1971, when Richard Nixon ended the post-war system of fixed exchange-rates that had America at its centre, his Treasury secretary, John Connally, told European leaders, “The dollar is our currency, but your problem.” This election result, to paraphrase Connally, belongs to America but is potentially a bigger economic problem for everyone else.

The scale and nature of that problem depend on the interplay of the two main elements of Mr Trump’s economic populism. The first is action to boost aggregate demand. Mr Trump favours tax cuts and extra public spending on infrastructure. The second element is trade protectionism. He has pledged to slap tariffs on Chinese imports and to renegotiate the North American Free-Trade Agreement (NAFTA) with Mexico and Canada. To the extent that he leans more on the first element and less on the second, the immediate damage to America’s economy will be limited. But even in that event, the net effect of a Trump presidency on economies outside America is still likely to be harmful.

To understand why, go back to the subject of Connally’s gibe: the dollar. As it became clear that Mr Trump would win the election, the greenback fell against rich-country currencies, such as the euro, yen, Swiss franc and pound, as investors sought a haven from policy uncertainty in America. An index of its value against major currencies dropped by 2% in early trading on November 9th. Within hours it had regained almost all the lost ground, as investors pieced together a positive story for the dollar, based on the prospects of a boost to demand in America’s economy and an inflow of capital from abroad.

A deal between Mr Trump and Congress to cut corporate taxes, goes the logic, would spur flush American companies to repatriate retained profits held offshore. It would also allow them to increase capital spending in America, because they would have more ready cash; and consequent profits would be taxed more lightly. The larger budget deficits entailed by tax reform, along with more public spending on infrastructure, would underpin yields on long-term Treasury bonds. Indeed, after falling in the initial aftermath of Mr Trump’s victory, yields on 10- and 30-year Treasuries are on the rise again (see chart). Add the potential for higher inflation from the stimulus and the likelier use of some protectionist tariffs, plus a Federal Reserve with a more hawkish tilt, as Mr Trump’s appointees alter the complexion of its interest-rate-setting committee, and you have the makings of a renewed dollar rally.

A fiscal stimulus coupled with an investment splurge in the world’s largest economy should, all else equal, also be good for global aggregate demand. And if this kind of “reflation populism” improves the near-term prospects for America’s economy, it may dissuade Mr Trump from resorting to full-strength “anti-trade populism”. Well, perhaps. But given his leanings, it is easy to imagine him resorting to soft protectionism that keeps much of the additional demand within America’s borders. He might for instance lean on companies to favour domestic suppliers, or attach local-content conditions to publicly funded infrastructure projects. What is more, the repatriation of profits by American firms would draw resources away from their subsidiaries abroad.

In 1971 the world feared dollar weakness. These days, dollar strength tends to have a tightening effect on global financial conditions. The waxing and waning of the dollar is strongly linked to the ups and downs of the credit cycle. When the dollar is weak and American interest rates are low, companies outside America are keen to borrow dollars. Often big firms, flush with such cheap loans, will further extend credit in local currencies to smaller ones. But when the dollar goes up, the cycle goes into reverse, as corporate borrowers outside America scramble to pay down their dollar debts. That causes a more general tightening of credit.

Mexico has the most to lose from Mr Trump’s presidency, should he keep his campaign promises. So the peso plummeted in the wake of the result. But Mexico, along with Chile, Turkey, the Philippines and Russia, also has a large burden of dollar debts, which are becoming more expensive in local currency. Mr Trump’s protectionist bent may make it hard for emerging markets to trade their way out of trouble. Only a few are likely to be unharmed by his victory.

Where does a Trump victory leave China, the world’s second-largest economy? China accounts for roughly a half of America’s net trade-deficit, so in Mr Trump’s zero-sum reckoning, it has a lot to lose should America launch an all-out trade war. In fact, the resulting disruption to global supply-chains would badly hurt American firms, and higher prices on imported goods would squeeze American consumers, especially poorer households, which spend proportionately more on them.

Yet there are risks to China’s economy too, from even a milder form of Trumpian populism. The dollar’s weakness over the spring and summer helped stem the outflow of capital from China that had threatened to unmoor the yuan and so unsettled global financial markets at the turn of the year. A sustained dollar rally would thus mean a severe headache for China’s policymakers, as it would revive the pressure on its capital account. They might then face an unpalatable choice: let the yuan sink against the dollar or keep domestic monetary policy tighter to support it.

China is safe from the biggest indirect effect of Mr Trump’s victory: the boost it gives other populist politicians. Europe is far more vulnerable. Britain’s vote in June to leave the European Union was one early ballot-box reflection of anti-establishment sentiment. Since then, insurgent political parties in France, Germany, Italy and elsewhere have called for referendums on membership. Such parties typically favour trade barriers and limits on immigration, and are gaining in popularity.

The euro area’s economy has been faring better in recent years, but the single currency remains fragile. The kind of cross-border risk-sharing needed to put the euro on a sound footing is at odds with the rising tides of nationalism and populism. An immediate hurdle is Italy’s referendum on constitutional reform on December 4th. A defeat would weaken Matteo Renzi, the reformist prime minister, and embolden the populist Five Star Movement, which favours ditching the euro. Around 14% of the euro area’s goods exports go to America, quite a bit less than China’s 18%. But America accounts for about 40% of the currency zone’s recent export growth, according to economists at HSBC, a bank. So American protectionism is arguably a bigger threat to Europe than to China.

The whole world has much to fear from Mr Trump’s threats to tear up trade agreements and impose punitive tariffs on imports. And even if he refrains from starting a trade war, the loose-tongued, fact-lite style he cultivated during the campaign could wreak serious damage when he is president. His hyperbolic threats now carry the weight of the American presidency. His victory was enough to chill some financial markets; what he might do with it could spark full-scale panic. Even short of that, like the Brexit vote, it marks an alarming step away from a liberal, open economic order towards more isolationism and less prosperity.
Our election, your problem | The Economist
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Old 11th November 2016, 17:41
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The Trump administration - What to expect
Something between Reaganism and France’s National Front, probably
Nov 12th 2016 | JANESVILLE, WISCONSIN THE ECONOMIST

AMERICA is about to take a hard right turn. All that is in doubt is whether the final destination is one that Ronald Reagan might have saluted—a country of low taxes, light regulation and free markets, in which individuals and businesses are free to seek prosperity with a minimum of government involvement—or a more nationalist, populist and even statist place, with questions of law, order, identity and cultural tradition playing a role that demagogic European politicians might both recognise and applaud.

In their hearts many Republican leaders in Congress prefer something closer to the first vision. But on the morning after election day the party’s keeper of the Reaganite flame, the Speaker of the House of Representatives, Paul Ryan, stepped to a podium in his hometown of Janesville, Wisconsin, and pledged fealty to Donald Trump. Mr Ryan, a free-trader and fiscal conservative who had rebuked Mr Trump several times during the campaign, credited the president-elect with securing a mandate for his version of government. He thanked Mr Trump for providing electoral coat-tails long enough to create the first unified Republican government in Washington since 2007.

But if Mr Ryan and his fellow congressional leaders are to survive this new order, they will have to embrace some unfamiliar positions. Mr Trump won office by challenging Republican orthodoxy on trade barriers (he likes them, though they alarm big business), spending (the president-elect sees no pressing need to reform Social Security payments to the old), relations with Russia’s president Vladimir Putin (Mr Trump is a fan) and immigration. Trump supporters are sure they have been promised that government agents will round up and expel millions of foreigners without the right papers, possibly including hundreds of thousands of youngsters brought to the country as children and shielded from deportation by executive orders signed by Barack Obama. They also expect a wall on the border with Mexico, and something tangible will probably have to be built to stem a voter-revolt—though Congress may balk at spending the vast sums needed for the fortifications Mr Trump has described.

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Many in the party are now eager to show that it can synthesise long-held conservative principles with Mr Trump’s worldview. Mr Ryan talked of freeing ordinary workers from the Obamacare health law. Signalling an all-out assault on the environmental rules and schemes that Mr Obama had hoped would be a big part of his legacy, Mr Ryan spoke of reining in oppressive federal officials to save the livelihoods of coal miners, farmers and ranchers who use public lands in Western states. Yet Senator Mitch McConnell, the Republican leader in the Senate, moved quickly after the election to quash Mr Trump’s promises to impose term limits on members of Congress as part of a plan to change the culture in Washington.

Optimistic Republicans predict that Mr Trump will be a sort of CEO-president, setting grand strategy while delegating day-to-day governance to Congress and to his vice-president, Mike Pence, a sternly conventional Christian and fiscal conservative who served in the House of Representatives before becoming governor of Indiana. They describe Mr Trump as a boss who disdains policy memos in favour of face-to-face briefings, and is more fussed by what works and what resonates with his base of working-class voters than with the niceties of ideology. Republicans certainly have a chance to shape America as they will. Mr Trump will get to appoint at least one justice to the Supreme Court, and in the country at large will enjoy support from 34 Republican governors. Overall the party of Mr Obama is weaker than it has been in generations, and faces still more losses in 2018, when the Senate map strongly favours Republicans.

Expect conservative action in every field of domestic policy. Obamacare will be an early target for dismantling, says Senator John Barrasso of Wyoming, a surgeon by background and a member of the Senate leadership. Several colleagues credit the unpopularity of the health law with securing their re-election this week, Mr Barrasso says. Republicans do not need to present a 2,000-page replacement bill on the Senate floor, he explains—Mr Trump can do a lot to dismember the law by appointing a new Health and Human Services Secretary who relaxes the many rules and mandates in the act, as Congress prepares alternatives that use tax credits, savings accounts and greater competition to provide cheaper, if less comprehensive health cover. With tens of millions of Americans covered by Obamacare, Republicans will look to states to step in and take the lead role currently played by the federal government, though Democrats predict millions will still fall through the gaps.

Congressional bosses and Trump advisers predict swift moves to expand production of American gas, oil and coal, whether by building new pipelines (including the long-delayed Keystone XL pipeline from Canada), easing exports of natural gas or opening public lands to new drilling and mining. Environmental agencies and the Department of the Interior will be staffed with pro-business executives, says a senior Trump adviser, following the dictum that “personnel is policy.”

Change of climate

Business leaders tipped for such posts as energy secretary or interior secretary include Harold Hamm, an Oklahoma oilman, and Forrest Lucas, the founder of an energy-services firm. Campaign advisers have told Mr Trump—who has called climate change a hoax—that domestic energy output could be increased by $150bn a year, and have urged him to swiftly withdraw from climate change commitments made by Mr Obama. They predict that a new conservative majority in the Supreme Court will doom the Clean Power Plan, an Obama-era scheme to limit coal’s use in electricity generation, and kill rules that increased federal oversight over waterways. President Trump probably has the legal power to withdraw from the Paris Agreement on climate change, ratified by America this year, though it might take time. Expect lawsuits from Democratic-run states, demanding more federal action to curb greenhouse gases as pollutants.

A senior economic adviser suggests that Mr Trump could achieve sweeping tax cuts within his first 100 days. Trimming corporate tax rates may be politically easier than reforming taxation on individuals, including popular tax breaks on mortgage interest. A Trump administration may offer big firms an amnesty if they repatriate profits held overseas, spending some of the proceeds on big new infrastructure schemes, though in the Senate Mr McConnell has suggested infrastructure is not a high priority.

Mr Trump’s populist rhetoric may not stop him appointing Steven Mnuchin, a former Goldman Sachs banker and finance director of the Trump campaign as his Treasury secretary. Other big jobs are expected to be offered to Republicans who came out early for the president-elect, such as Senator Jeff Sessions of Alabama, an anti-immigration hardliner and close adviser, and a former mayor of New York (and campaign attack dog), Rudy Giuliani. Representative Tom Price of Georgia is spoken of as a possible budget chief in the White House, while contenders for secretary of state include a former House speaker, Newt Gingrich, Senator Bob Corker of Tennessee and Governor Chris Christie of New Jersey (who is also talked of as attorney-general, but reportedly thinks the job insufficiently grand). National-security posts are likely to go to such advisers as Lieut-General Michael Flynn, a fiery Obama-critic and former head of the Defence Intelligence Agency, and another retired three-star general, Keith Kellogg.

During the campaign foreign-policy grandees from prior Republican administrations were among Mr Trump’s harshest critics, shuddering at his geopolitical views. Now they must decide whether to help a new president with no experience in public office. Stephen Hadley, a national security adviser in George W. Bush’s White House who refrained from comment on Mr Trump, is tipped to be one of them. What to expect | The Economist
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Old 11th November 2016, 17:48
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Not my president-elect - Anti-Trump protests continue across America
Nov 10th 2016, 21:07 NEW YORK THE ECONOMIST

IN HIS cool-your-jets remarks the day after the presidential election, Barack Obama noted that “a lot of our fellow Americans are exultant today” and “a lot of Americans are less so”. Whatever Americans’ feelings about the results, he said, “we are actually on one team” and the election was just an “intramural scrimmage”. The 44th president is known for his preternatural calm and the perhaps excessive charity he shows to political opponents. But Mr Obama’s cool assessment of the mood of the nation is hard to reconcile with the unprecedented ferocity and range of protests breaking out against the president-elect in cities across America.

In Boston, Chicago and Washington, DC; in Portland, Oregon, and Austin, Texas; and in Donald Trump’s home, New York City, large numbers of protesters are taking to the streets to condemn Mr Trump as president. The Republican victor is “not our president”, according to the chanting among many of the 20,000 or so demonstrators who gathered outside his eponymous tower in New York City on November 9th, where more protests are scheduled for November 10th and the weekend. Many were simply shocked and appalled by the electoral outcome—though there were no Hillary Clinton signs in view. Others had particular concerns. Simone Mills, a first-generation American whose parents came to New York from St Kitts, is fearful of how Mr Trump’s presidency will affect her family. “He’s just too racist for this county” she remarked. Many seemed to agree. A chant of: “Racist. Sexist. Anti-gay. Donald Trump go away!” was shouted by the crowd in New York throughout the evening.

Other chants on the pavements in New York ranged from taunts (“**** Trump”) to quibbles with his positions (“**** your wall”) to references to his on-camera boasts about sexual assault (“***** grabs back”, “End rape culture”). But some of the critiques are more radical—and focused. One of the groups that put together the protest was Socialist Alternative, an organisation that helped push for Seattle’s $15 minimum wage. More than a few anarchists were found on the streets, with signs like “Dump the Elephant, Dump the Ass, Let’s Build a Party of the Working Class”.

For one 17-year-old attendee, the anarchism was slightly alienating. “I felt very empowered”, she said of the march that stopped rush-hour traffic on Fifth Avenue, “but there were moments when I felt very dissociated” from the messages on the signs, including one that read “No one for president!” Another teenage protester agreed with this sentiment, surprised to encounter the idea that, she said, both “the Republican and Democratic parties should be abandoned”. A young Hispanic woman noted the contrast between the anti-Trump march and Black Lives Matter protests she attended two years ago. In 2014, symbolic targets of the protesters’ wrath—police officers—lined the streets; now, “the perceived enemy is so difficult to identify.” There is “less rage”, she said, and more of a “love in the form of a passionate anger”.

A day after the march, a 17-year-old was gratified to see that the event was broadcast on national television, and that similar protests were filling streets across the country. The efforts will not prevent Donald Trump from taking office on January 20th, she knew, but they “have to be sparking some kind of reaction”. “It’s reassuring”, she said, that when the president-elect takes office and makes a “bad call”, it won’t go unnoticed, and that discontent with Mr Trump will be channelled into “concerted efforts” to advance the causes he disdains. “It gives me hope”, she said. Not my president-elect: Anti-Trump protests continue across America | The Economist
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Old 11th November 2016, 18:18
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The button panic - Donald Trump and the nuclear codes
Mr Trump will soon control America's nuclear codes
Nov 12th 2016 THE ECONOMIST

IN A ritual out of sight of the cameras on Inauguration Day in January, America's ''nuclear briefcase'' will change hands and President Donald Trump will receive a card, sometimes known as the 'biscuit'. The card, which identifies him as commander-in-chief, has on it the nuclear codes that are used to authenticate an order to launch a nuclear attack. At that point, should he wish, Mr Trump can launch any or all of America's 2,000 strategic nuclear missiles.

There are no constitutional restraints on his power to do so. Even if all his advisers have counselled against it, as long it is clearly the president giving the command, the order must be carried out. There are no checks and balances in the system. Moreover, once the order is given there is likely to be only a matter of minutes in which it could be rescinded. Once the missiles are flying, they cannot be called back or disarmed. Mr Trump, from what he has said, does not take this responsibility lightly. Indeed, he has often stated that he believes nuclear weapons to represent the greatest threat to humanity and that he will not be trigger-happy,"like some people might think". But in common with his predecessors, he does not rule out their use.

With little more than ten minutes to take a decision that could kill hundreds of millions of people, even the calmest individual would be under intolerable stress if informed that America was under imminent attack. It is not Mr Trump's fault that the system, in which the vulnerable land-based missile force is kept on hair-trigger alert, is widely held to be inherently dangerous. Yet no former president, including Barack Obama, has done anything to change it.

Of greater concern would be how Mr Trump might behave in an escalating confrontation if Russia were to rattle its nuclear sabre even more loudly. It is possible that his apparent desire to be buddies with Vladimir Putin might help defuse a dangerous situation. He is, however, notoriously thin-skinned and unable to stop himself responding to any perceived slight with vicious (verbal) attacks of his own. He also revels in braggadocio and is known to be reluctant to take advice. Marco Rubio, a rival for the Republican nomination, questioned whether he had the temperament to be put in charge of the nuclear codes. So did Hillary Clinton. They were right to do so. But it is now Mr Trump, not them, who takes the biscuit. Donald Trump and the nuclear codes | The Economist
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