What will happen if Trump is elected President

[Eric the Green]

(09-17-2016, 09:06 PM)Mikebert Wrote:

(09-17-2016, 01:19 PM)Eric the Green Wrote:

(09-17-2016, 12:34 PM)Mikebert Wrote: National Review has an article on this.  It is really quite rosy and they are diehard nevertrumpers so I don't think they are trying to make him sound good. I think they paint a too rosy picture, Trump will be worse (from my perspective) than they suggest, but maybe he won't be totally awful, maybe only a bit worse than Bush and we survived him.

I thought of this, but then I think, how many Bushs can we survive? With climate change getting worse by the day, I'm not sure we can survive another. Nor can we afford another reckless foreign policy. And we are already broke; how much more debt can we pile on before we are truly bankrupt and the interest eats up our government? How much more supply-side-driven economic ruin? How much more of letting Wall Street run wild?

Clinton won't be much better than Bush if she wins narrowly and Democrats fail to take back the Senate.  Obama had a Democratic Congress for two years that allowed him to pass some stuff, including preventing the depression he inherited.  He had a Democratic Senate that allowed him to fill some appointments.  There is going to be a recession during the next presidential term. The last two business cycles have ended with an asset bubble collapse.  We currently have a stock market bubble and so this recession is going to be like the last two in that way.  The Fed was able to contain the first bubble collapse by slashing interest rates, which had the effect of creating a new bubble in real-estate, whose growth countered the recessionary impact of the falling stock bubble.  For the second recession the stock market was a damaged asset class and when the Fed slashed rates it failed to counter the effects of the deflating real estate bubble and we had a very serious recession.  Depression was avoided by a combination of fiscal stimulus (Bush's TARP and Obama's stimulus bill) coupled with extraordinary actions by the Fed (QE).

For the upcoming recession real estate is a damaged asset class, and there will be no counter for the collapsing stock bubble.  Interest rates are already low and the Fed has no room to serious cuts.  QE has been heavily utilized and its effects the first time were pretty weak and a second set of actions will be even less effective.  The GOP Congress is NOT going to pass another TARP for fear of a Tea party reaction against them.  They are not going to pass any stimulus to help Clinton get re-elected.  The most likely outcome of a recession on Clinton's watch would be a nasty recession that would probably even be worse than the last one.  Since they have already called that one the Great Recession I think we might see the D-word come back into use.

Conventional wisdom would have Democrats blamed for this downturn and that could be the end of their party.  A month ago I was envisioning a big Clinton victory with a clear Democratic majority in the Senate and a much narrower Republican majority in the house, in which investor fears could pressure Ryan to let the Clinton stimulus plan to come to a vote.  But if Ryan retains the huge Republican majority of today, I see this action as too risky for him and so and any Clinton stimulus that would have a chance of working would be DOA in the House.  This would leave starting a full scale war against ISIS or someplace else as her only out.  We saw where that led Bush.

Yes, your logic adds up. So this is about can we survive even Clinton; even if Trump loses. We probably can't survive Trump, but can we survive Hillary Clinton if she wins narrowly? Which right now it looks like, but may not look like in another month.

Since my forecast is that the next recession won't be as bad, and there won't be any real new US war until 2025 or 2026, can my prediction prevail even if the economics and the logic say otherwise? What can I point to besides my cosmic indicators?

First of all, I think the current recovery is turning out to be more robust than the last one. The Bush II economy was very sluggish. Despite what those who support Trump say, middle class income and jobs are rising. There was no stimulus after previous recessions, going back decades. This was the first time that the Democrats were able to get a stimulus past the trickle-down ideology intact for decades. Keynes was back even if only for a year or so. And it worked. It was about the only thing that worked, despite deliberate Republican efforts to slow it down or stop it and blame the results of their actions on Obama.

The other thing that's going to be happening is the green energy boom. So like the dot com bubble and burst in 2000-2001, but unlike the previous breakdown in 2008, there are genuinely-new sources of job and income that are going to be boosting and transforming the economy. The market is taking over from the Obama green energy stimuli and making this economic change inevitable.

So these two factors could slow down the next recession, even though the government in the next 4 years may have no tools to deal with it. It will have the provisions of the Dodd-Frank reforms and Warren Consumer Protection Bureau to deal with bank failures. Too big to fail will not be tolerated and will not be allowed the crash the whole economy-- unless Trump wins of course. In that case, Katy bar the door.

It's a complex situation and no particular ideas or words can encapsulate all that will be going on.