Trump’s Victory: Shocking But Not Entirely SurprisingLearn more about this firm
In a year in which events in the United States and throughout the world continue to startle and surprise, another occurred on the evening of November 8 when Donald Trump shocked almost everyone by decisively defeating former US Secretary of State Hillary Clinton to become the 45th President of the United States.
Trump will be the first person ever elected to this office who neither held high political, governmental, or military office, and his victory was seen less as a ratification of support for him, but a repudiation of the status quo and global and US elites.
To a certain degree, the election results should not have been entirely surprising even though it was shocking.
Election polls had revealed that it was going to be a close race, and the peculiar features of the US electoral college under which votes are tabulated on the basis of support within each individual state, rather than the aggregate, seemed largely to favor Secretary of State Clinton, but it was close enough that anything could have happened, and it did.
Defying expectations in battleground states
During the long November 8 evening, states which were presumed to have favored Clinton: Pennsylvania, Michigan, and Wisconsin, moved in the other direction and others which were viewed as being more tight: the large states of Florida, Ohio, and North Carolina and the smaller state of Iowa, moved to Trump. Clinton did win the state of Virginia, where 30 percent of the electorate lives in the Washington, D.C. suburbs, but by a much narrower margin than anyone would have predicted. She also won in Colorado, Nevada, and is currently leading in New Hampshire. In each instances, her margin of victory was smaller than expected.
Public polling in the era of mobile phones may not be as accurate as it was a decade ago, but the results are perhaps more skewed in elections in which anger against the status quo, and particularly the elites, is at play. This was evidenced by the Brexit vote in the United Kingdom in June. Pollsters often rely upon traditional voter turnout patterns, but when anger is in play, the polls will lose their meaning.
Over the last two generations, wages and economic security in the US have fallen for middle- and lower-income workers while they have risen for not only the highest-income earners, but also for upper-middle class and college-educated workers who have largely benefited from globalization, and whose attitudes on a host of issues, including immigration, cultural changes, and climate change were consistent with those shared by global and US elites, but divergent from those of people who have felt left behind. These voters often come from the same neighborhoods, universities and families of the media and perhaps the pollsters as well. They create an echo chamber of what has commonly become known as the ACELA corridor, running from Boston to Washington, where we all missed out on what was happening as our opinions and facts reinforced each other’s.
And then there is the US regulatory environment, which has become particularly onerous under the Obama administration. Most notable is the Department of Labor (DOL) fiduciary duty rule, which has the potential to upend the way financial advisors do business. Scheduled to go into effect in April 2017, there is now a real possibility that the regulation, which creates a new fiduciary duty obligation on those who sell or produce retirement products, be rolled back or stopped altogether.
The new President and the Republican Congress could block funding for the regulation or repeal it. The new DOL administrator can seek to rewrite the regulation although this might take time. Perhaps the most likely result could be that the Trump administration will not defend the regulation in several of the US District Court cases filed by several financial service company trade associations. This might facilitate the chance of the regulation being overturned by the courts. Nothing is certain and for those who lament the regulation they are advised to proceed as it will take effect until clarity is provided. It is "hope for the best and prepare for the worst."