Wednesday, November 09, 2016

Season Finale

There was a (turns-out-not-to-be-funny) joke circulating, of the form "Omg I'm so excited for the season finale of America".

Well Season Finale has arrived.  So what will the next season of this reality show bring?

Having been wrong about so many things, what's a few more among friends?   Here are my prognostications:

1. The world will have to solve the crisis of global warming and climate change without much help and perhaps some hindrance from the US federal government.  I don't know what happens to the Paris Accord if Trump walks the US out of it, as he has said he would do; but the rest of the world should, in my opinion, try to stick with the program.

2. The financial markets will be very volatile until Trump's intentions (and ability to act on them) become clear.  For example, Trump has stated positions against the Dodd-Frank financial industry regulations, but also in favor of the older Glass-Steagal regulations.  What does he mean to do and what will he be able to get through Congress?

3. If the financial markets don't stabilize, then perhaps there will be a US recession.  There will be little to pull the US out of recession and the people who voted Trump in are likely for a bitter disappointment.  Their economic prospects will likely not improve. (I'd be really glad to be disappointed about this.)

4. Obamacare will be repealed, the chokehold the medical/pharma industry has on the US economy will tighten, healthcare will become much more expensive, and less available (again, a blow for the people who voted for Trump, and a prediction I really hope I'm wrong about.)

5. Europe which ought to band together more tightly for its own protection because of the uncertainty of the American umbrella will likely not be able to do so.  They are all in the grip of Trumpist movements of their own.  I expect Europe to be in a prolonged recession, too.

6. Trump might scrap the nuclear deal with Iran, and Iran may resume its climb up the nuclear capabilities ladder.   If this happens, it is almost certain that there will be a war, an attempt to bomb Iran into submission.   I think one side-effect will be that Shia terrorism will also start to globalize (right now only Sunni terrorism is global in scope).

7.  India's hope of export-driven economic growth will simply be dashed with the US and Europe in recession.  India's economic growth will have to be driven internally and thus will be slower than otherwise possible (but perhaps more sustainable?)  With a large chunk of the global economy in recession, India will be able to count on low prices for energy.

8. The Middle East is a major source of employment for Indians (I think annual remittances are of the order of $80 billion per year) and some of India's largest trading partners are in the region.   Things like a US-Iran war will tend to place this in some jeopardy.

9. Back to America - the US will have an extremely conservative Supreme Court for the rest of my lifetime.  We will see more guns, choice taken away from women, the further enshrinement of corporations as people with religious beliefs, free speech rights and so on.   Labor unions are going to completely wither away. Much of civil rights will devolve back to the States, and the cultural divide between the liberal coasts and the Christianist middle and south will intensify. 

10. All in all, the leadership in the world that Americans have pretty much taken for granted is going to evaporate, initially because of the uncertainty of Trump, and later possibly because of the policy Trump and the Republicans enact.

PS: The main immediate issue is the uncertainty.  Trump could boost US economic growth with a massive infrastructure program, but that requires going into deficit, which may not be politically feasible; and Trump also wants to reduce the deficit.  Trump has made a number of promises that are inconsistent, and no one knows which ones he will honor.