Abstract: Will Trump be president of a Gilded Cage?
In a column I wrote at the end of July this year on the latest global scenarios for 2021 to 2026, I painted the 'Gilded Cage' scenario as follows:
"The globalisation trend is reversed by the anti-establishment flag which is unleashing the fury of ordinary citizens against the super-rich and the political establishment in places like Washington and Westminster. In the event that Donald Trump becomes President of the United States, the walls go up on America's borders and US companies are incentivised to stay at home instead of establishing their manufacturing facilities in countries with lower labour costs. Protection rears its ugly head as nations seek to respond in kind to America turning its back on them. The US military umbrella is also withdrawn from its NATO allies in the interests of America reducing its own federal budget deficit while making the others pay more. The probability of this scenario playing out is calculated to be around 30-40%."
Well, Donald Trump has won the presidential race so the probability of America retreating into a Gilded Cage has increased, but the question is to what level? Will he change from brash candidate to responsible executive taking advice from his principal advisers and addressing the issues he raised in a measured manner? Do we give him the benefit of the doubt now or do we withhold it until we have witnessed his behaviour in his first 100 days of office? He struck a very conciliatory tone in his acceptance speech when he asked Americans to come together again in a spirit of unity, but does he understand that the cage is unlikely to be gilded in today's interdependent world?
I wish my mentor, Pierre Wack, was still alive so that I could ascertain his views. He was, and still is, the greatest scenario planner of all time in the world. I imagine he would have favoured the second option of wait-and-see because of the extreme unpredictability displayed by Trump during the election campaign. However, Pierre was the person who taught me that to look into the future you have to identify the forces changing the present: he called them pre-determined elements whereas I call them flags.
I have one flag that I have been playing along with my co-author Chantell Ilbury for the last few years and that is the anti-establishment flag which I have already mentioned. Donald Trump, despite being a wealthy man himself, tapped into this flag to win this election. In that sense, he will be held to account by many of those who voted for him and who want him to deliver a more inclusive society that broadens the opportunities for ordinary citizens to advance themselves. It is no longer about the establishment ganging up on them and keeping them down. The bottom line is that the present level of inequality of wealth and income in America is brought down to a more reasonable level that for example existed there in the 1970s.
In other words, Trump was the beneficiary of a popular movement not a political party. He was almost a one-man show in expressing his opinions on change to make America great again. As I said in Flagwatching, a book I wrote last year: "Thus, we have the rise of new figures in the political domain who epitomise the expression: I am what I am. Take me or leave me. This is greeted with total mystification and amazement by the media and political gurus who are accustomed to the double meanings and ambivalence of the existing generation of politicians."
So we are at a tipping point in history. I now give a 50:50 to Trump turning out to be a better leader in practice than his critics made out during the campaign. He avoids the Gilded Cage scenario by exhibiting a lot more pragmatism in getting things done. He becomes more of a team player in examining the best options to fulfill his vision.
On the other hand, the downside of his presidency is expressed in my July column as follows: "At its worst, the Gilded Cage scenario could be the prelude for another Depression like the one which occurred in the 1930s as well as for something like the market crashes of 1929 and 2008. One can also expect a massive round of defaults on national and corporate debt which have reached record highs as a consequence of cheap money. Brexit could end up being the right decision for all the wrong reasons, as the European Union descends into chaos."
Nevertheless, this is the time for hope as South Africans correctly did in the late 1980s when many red flags were around. Remember to watch all the flags emanating from Trump in the coming days- both green and red- to get a feel for his impact on the global economy in five to ten years' time. Furthermore, recognise that the anti-establishment flag is a game-changer not just in America, but in South Africa too. We ourselves have work to do to bring it down and narrow the odds of a worst-case scenario for our own country.
By Clem Sunter, originally published on News24.com, 10 November 2016