National Post (National Edition)
AMERICAN CENTRE MUST LEAD THE WAY.
There's been much hand-wringing all week about the cliffhanger election in the United States, but the stock market has had its best week since the onset of COVID-19.
There are three reasons for the market's reaction.
First, a razor-thin electoral victory by Joe Biden or Donald Trump is guaranteed, as opposed to a landslide in either direction. If Trump loses, this also means less chaos and bombast. Secondly, once all is said and done, markets assume that another massive stimulus program will be passed. And lastly, markets are betting that a COVID-19 vaccine and better therapeutics will be widely available sometime in 2021, which will allow economies to reopen even further.
But the election has revealed permanent fault lines in America. Trump got more votes in 2020 than in 2016 due to support for some of his policies — if not his boorish and embarrassing behaviour. And support for those issues will still be there no matter who occupies the Oval Office. Any successful leader must recognize that there are a number of truisms about the American public that aren't going to change any time soon.
Americans dislike elitism. Trump gained by portraying himself (somewhat inaccurately) as a champion of the underdog against big government, big banks, big media, academia, Davos, Hollywood, big business, Silicon Valley, China, NATO deadbeats, as well as international treaties and organizations like the United Nations and the World Trade Organization.
Americans distrust outsiders. Trump's immigration controls, based on criteria that are similar to Canada's, are popular. One telling manifestation of this is the fact that Trump won Florida due to support from immigrant Hispanics, and took Texas thanks, in part, to the heavily Latino Rio Grande Valley. In Starr County, Texas, which is 96 per cent Mexican-American, Trump narrowly lost by five per cent, compared to a 60 per cent loss in 2016.
Millions of people from Mexico, the Caribbean and South America have come into the United States illegally since the Second World War. This has disrupted labour markets and cities, and tough immigration laws will remain even if Biden takes power.
Americans distrust foreign nations and foreign wars. Fortunately, Canada occupies a lofty position, even in Trump world, as “another country” and not a “foreign country.” No matter who's in the White House, Canada's leadership must remain non-judgmental, co-operative and respectful. As should Europe, Australia, Japan, South Korea, Britain and other allies.
Americans are pathologically competitive as a result of their dog-eat-dog society. This leads to a blackand-white or good-or-evil mentality and impedes compromise on any policy. Whether it's the NFL, war or a legislative impasse, Americans on both sides consider their opponents to be enemies, not competitors or potential collaborators. This makes sudden change impossible.
For all that, Americans did manage to make some progress in this election. For instance, more Republican women won House seats; more Blacks ran and voted for the party than in 2016; and some notable referendums received ballot approval: Oregon decriminalized the possession of hard drugs, choosing to use rehab as a remedy as opposed to prison; several states legalized marijuana; and Florida joined the growing list of states where voters chose to more than double minimum wage to US$15 ($19.50) an hour.
Americans remain Cold Warriors. Trump has also benefited by trotting out the socialist bogeyman because Americans equate socialism with totalitarian communism. So far, the progressive branch of the Democratic party, led by Bernie Sanders, has failed to educate the public and effectively counter the Republican slogan that “socialism is a threat to the middle class.”
This means that even if Biden wins, and Democrats squeak through by getting control of the Senate, any dramatic veer to the left is out of the question. Same applies to Trump if he wins and veers to the right. That is because the electorate is likely to punish extremes on either side.
This week, Americans refused to hand a landslide to anyone and that's a good outcome, given the temper and trends of the time. Leading America from the centre is the only path to stable governance.