Tribalism & Trump. Bully for America.

At taverns, barbeques, reunions, family events and sports get-togethers, people of all ages love to talk about the hard-fought achievements of life.

“Our team…. we played hard, we trained hard and we always left it on the field.”
“Our coach…., he/she was tough, a real SOB, but because of him/her, I got in the best shape of my life. Those high school/college/university days were unforgettable.
“My army commander/drill instructor…..now that was one tough mother, but we got the job done and he always had my back”.
“My dad/mom…. worked me hard, kept me in line and kept me out of trouble. They made me who I am today and I am better for it”.

Few boast about the team that didn’t play hard. Nobody remembers the coach that handed out participation ribbons. Long forgotten is the commander who lived for paperwork, the teacher that “phoned it in” and whether one acknowledges it or not, most sense an undercurrent of resentment when talk turns to absentee parents.

As for the memorable events of life, reminiscing typically reveals a pride in achievement, a commonality of purpose, a job well planned and well executed or a set of parents who had your back.

Perhaps that is what Americans yearn for today. Most don’t want to necessarily recapture glory days of old, but to feel proud of their country and of themselves again. Americans don’t particularly want to feel entitled, rather, they want the satisfaction that comes with achievement. Americans DO want their politicians to stop apologizing for America internationally so that the populace, in turn, won’t feel sheepish and ashamed when abroad. Most Americans cannot make sense of a world that begs for American military aid and economic aid yet continually bites the hand that feeds them. Americans don’t like Russian aggression in eastern Europe, but they also cannot comprehend why Estonians, Latvians and Lithuanians refuse to take meaningful steps to arm themselves first. Americans want to feel respected abroad and not taken advantage of at home. If that means that America is poised to become more insular, more tribal, and maybe even a little meaner (to those outside of America), well, so be it. Biting the hand that feeds you, eventually, has consequences for the biter.

IF this is the mood of the American electorate today, then this author fully understands the appeal of Donald Trump. He comes across as the tough, but fair, parent that kids look up to at school events. He’s the trash talking coach of everyone’s sports years, provided that you happened to be on one of his winning teams. His persona is that of the businessman you want negotiating for you, instead of against you. Donald portrays himself as un unabashed “America first and the rest of the world can take a flying leap if they don’t like it” cheerleader.

Detractors call Mr. Trump a bully. Undoubtedly he provokes a visceral reaction for some; maybe they recall times when they were picked on. Most refuse to even consider the possibility that Donald Trump could become president. What pundits ignore, and what many fail to take into account, is that Donald Trump is offering to be AMERICA’s bully. Mr. Trump isn’t running on a platform of picking ON Americans; rather, his motto seems to be to fight FOR Americans, John Wayne style. That is tribalism.

As to those who believe that Mr. Trump will not win; well, that is certainly the prevailing thought as of this date. All that I would mention, as a counterpoint, is that true bullies aren’t always loners, in fact quite the opposite. Most were quite popular due to the fact that their friends were well protected.

Because it seems so unfathomable to many that Donald Trump could become president, it is clear that few are seriously considering how this will impact the global equity markets. To begin, let us assume that he acts upon his belief of America first. The few investments minds that have spoken up, thus far, have tepidly suggested that it is much ado about nothing. They dismiss talk about a more protectionist America employing counter-veiling tariffs, duties and penalties. Their prima facie argument is that America will be hurt as well. However, a country that operates with a substantial and perpetual trade deficit typically wins when they can tariff imports. Additionally, tariffs produce government revenues, which go some way towards addressing budget deficits, all else being equal. Should tariffs achieve the goals of producing fairer trade, then eventually they can be reduced as a reward for good behavior. Free traders don’t like to acknowledge certain realities of the global marketplace; free trade is not the same as fair trade. America is a participant in many free trade agreements but few are truly fair trade.

The global economy is comprised of competing companies and competing nations with a zero-sum game in play among many mature industries. A failure to acknowledge that governments apply overt foreign protectionism is the sort of naivety that kills portfolio returns. It will likely be advantageous for America to have a president who is committed to flexing some global muscle once again. That will have negative implications for foreign companies that seek to export to America. Companies that are domiciled in America, and that sell to both Americans and to those abroad, should be winners in a potential Trump presidency. The rest of the world refuses to consider the potential for a tougher, more nationalistic American economic policy; that clearly suggests that America has, likely, been far too passive in asserting national interests. Nations that are overly-reliant on America for defense and that fail to appropriately fund their own military budgets, or countries that rely upon largely unrestricted access to American markets for trade, may find the result of a Trump presidency to be highly negative for their domestic economies.

This author does not take a view, either favorable or unfavorable, about the likelihood of Donald Trump winning the presidential race. However, it is naïve, and possibly profit limiting, to fail to acknowledge the possibility and to plan accordingly. A political figure that cultivates a movement can go a very long way, once momentum builds. A candidate with a good slogan doesn’t actually require firm policy points in an election. After all, President Obama won the first American election with little more than a slogan taken directly from Cezar Chavez’ United Farmworkers Union “Si, Se Puede!” and a vague willingness to go over budgets with a fine tooth comb.

Trump, unlike most candidates in the race today, actually took the time to create a slogan.