My Take on Political and Economic Ramifications of American Election- a Quick and Short Response

10 mins read

November 9, 2016

by Seid Hassan- Murray State University

This commentary is an expanded version of a brief interview that I gave to the Amharic version of Voice of America, on November 9, 2016.

Donald Trump

The two American presidential candidates were engaged in personal destruction rather than debating on the issues. As a result, President Elect Trump did not tell us what he his policies are on a number of issues, particularly domestic ones. It has hard to know, therefore, what President Elect Trump would do the issues and problems facing the United States and the rest of the world. Based on the very vague and limited promises that Mr. Trump uttered, the following short-term (immediate) and long-term implications could be contemplated:

  1. Short-Term Consequences:
  1. Social/cultural related Issues. These include Supreme Court appointments, repealing/scaling back of the Affordable Care Act (ACA) or Obamacare, reversing gains made in race relations, environment and labor related issue, increased rise in populism and anti-immigrant policies (even a rise in xenophobia), etc.
  2. Foreign Policy Related Issues: If Mr. Trump happened to implement what he uttered during the presidential campaigns, he would cozy-up with Mr. Putin of Russia. Such a move will have serious ramifications, particularly in regards to American relations with Europe, Asia and particularly the Middle East. He would also face resistance from the American military complex and the foreign policy establishment. Many nations may refuse to cooperate with the U.S. in fighting terrorism, among other things. An inward-looking America would gradually, if not immediately, lose its superpower status.
  3. Increase in intra-party divisions: on the one hand, Mr. Trump being elected could trigger a war between Mr. Trump and his supporters and the rather entrenched Republican establishment. This would be particularly true when it comes to trade and foreign policy issues. I predict that, at the end of the day, the establishment would win this Republican -party related intra-party war- part of the rude-awakening to the American people (see, below). The Democratic Party related intra-party war has already manifested itself during the primaries- via the policy feuds involving Mrs. Clinton and Bernie Sanders. Mrs. Clinton’s unexpected loss would also exacerbate internal party divisions.
  4. Widening Cleavage Among the American Society. Globalization, rising income inequalities and/or insecurities, gridlock in Washington, have played prominent roles for the divide. The extreme right and extreme left have also, hitherto, contributed to the divide. Indications are that these catalysts would continue to play their undue prominent roles for the divide. A divided society and political system could result in the decline of American global economic and political superiority.
  1. Long-Term Consequences:
  1. Globalization and Trade. Perhaps the number one issue that helped Mr. Trump to be elected as president is his promise to rip-up all international trade deals (gained over several decades-long of GATT/WTO negations). If implemented, not only such an endeavor would lead to a trade war (particularly with China- America’s number 2 trading partner, and Mexico- America’s number 3 trading partner) but it would also result in increased world-wide protectionism and declines on world economic activity.
  2. Immigration and Building a wall between Mexico and the United States: First of all, it would be nearly impossible for America to extradite the 11-15 million people residing in America illegally. The damage would come from two fronts: (a) financial and logistical strains from collecting those residing in America illegally; and most importantly, (b) the cost associated with the economic activity involving the immigrant population. On the one hand, the American population, just like most of Western Europe, is aging. Immigration has been a gold-mine for America in replenishing its aging population and this would be lost (leading to an economic decline similar to what is happening in Japan). The American economy, particularly the agricultural and construction sectors and to some extent the high tech sector, is dependent on incoming foreign population. Curtailing immigration would result in a decline of American economic activity.
  3. Taxes, increased economic inequality: If implemented, the rich would benefit from Mr. Trump’s tax reduction policies, thereby leading to increased anger, division and conflict among the American electorate. National debt would rise thereby adding more constraints the economy. More gridlock would ensue due to differences in policies leading to lack of cooperation, rses in tensions and divisions and ultimately economic decline.
  1. Corruption and entrenchment exemplified by lobbying). Corruption that is largely peculiar America, that is, lobbying as a legalized form of corruption, that, will stay the same. The Republic party controlling all branched of government re-enforces the entrenchment.
  2. Rude Awakening for the American People:
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I already have mentioned/alluded to some of these above. Mr. Trump would be unable to deliver on many of his promises, resulting in increased disaffections, divisions and conflicts among the American people. To recap, some of them may include:

  1. Bringing Jobs that Left America: A majority of those who voted for Mr. Trump happen to be non-college educated and relatively unskilled Americans. Those folks who believed Mr. Trump would bring the jobs that left America will find out that those jobs will never (and ought not) come back. Mr. Trump, therefore, would be better served by saving people (through paying for retraining, education, helping in job-hunting activities, etc.) rather than trying to save jobs that would never come back.
  2. Mr. Trump would fail to extradite the estimated 11-14 million people residing in America (due to financial and logistical constraints.) Some Americans who wanted the country’s laws being protected and implemented would be very disappointed if Mr. Trump fails to effectively kick out the aforementioned folks.
  3. The entrenched system that is largely driven by Wall Street and the lobbying (that is, the legalized form of corruption) would largely remain intact. All branches of the government being controlled by the Republic party would just re-enforce the status quo ante.
  1. Effects on Ethiopia: Mr.  Trump’s elections as the President of the USA would hardly have any measurable impact on Ethiopia. In fact, the positives may outweigh the negatives if Mr. Trump implements some of the (vague) promises he made prior to the election. For example, Mr. Trump has said that he would dramatically cut foreign aid. My research has indicated to me that, particularly when it comes to aid dependent countries such Ethiopia, the negatives of foreign aid outweigh the positives. All that foreign aid has brought to Ethiopia is a vicious cycle of rampant corruption, rise in income gaps, perpetual poverty and aid dependency.
  2. Overall, this election is similar Brexit (that is, the United Kingdom’s vote to leave the European Union.) For one, many Americans, sooner or later, will have a buyer’s remorse-regretting electing Trump as their president. Brexit effectively resulted a shrinking of the United Kingdom’s power (both economically and politically – in global scale)- such a shrinking being felt relatively immediately. To a certain extent, the same would be the case for America. Trump’s economic and foreign policies, if implemented, would lead to a decline in American political and economic superiority. Any economic decline of a major economy would certainly have serious negative consequences on the world economy as well.
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Unfortunately, saving America from the looming disasters impinges upon its elites, who benefited from globalization and domestic policies (such as repeated tax cuts.)

1 Comment

  1. I think that it is a very plausible analysis.
    We are in for very difficult times.

    Thank you Dr. Hassan for the usual brilliant paper.

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