Starting with the markets. After Trump won (which wasn’t supposed to happen), the stock market made an impressive move higher (which also wasn’t supposed to happen). The interesting cross-current, though, was how much interest rates moved up as well (in another clear example of how the Fed is not bigger than the market). Part of the “explanation” is that Trump’s anti-regulation, lower tax policy stance, within the backdrop of a Republican-controlled congress, should be good for growth. But, to my thinking, stocks were already very over-valued, and the debt problem did not suddenly go away. If these immediate reactions remain the trend, and don’t reverse, higher rates will have an impact at some point. That I believe.
As for the whining post-election, I chalk it up to my favorite internet meme: “When everybody gets a trophy, nobody knows how to lose.” To be clear (for the millionth time), I am not a fan of Trump, and as much as I do not like Hillary, I still couldn’t hold my nose and vote for the guy. But, any notion that the popular vote is more indicative or important than the Electoral College outcome is just ridiculous. Everybody knew the rules going in. As a result, the candidates campaigned so as to win the Electoral College, not the popular vote. Moreover, I am not even sure that the popular vote outcome is truly informative anyway. Sure, at a minimum, it tells us that the country is highly divided, but we also know that the existence of the electoral college structure in the first place means that plenty of people think that their vote holds very little value (I live in New York City and there was no difference in the election results whether I voted Clinton, Trump or not at all). Just consider that only 53% of eligible voters participated – the non-voters actually won the election by that metric. Therefore, it’s hard to argue that the popular vote tells us anything of import. But, everybody likes to have something to complain about. And in the land of safe spaces, winning the popular vote is something to hang on to.
