The Trump victory shocked America. Even those that supported Trump went into election night with just a hope of winning, and little expectation of what was to follow. The upset was on the magnitude of the Brexit vote, and therein lies part of the explanation of why Trump won the election.

Not since just after the Civil War have Republicans enjoyed this kind of across-the-board political power. They have more, and the democrats have less congressional seats, governorships, and state legislators since the days of Ulysses S. Grant. That is the real significance of this election. It wasn't just about Trump, it was about a change going on far, far more fundamental than politics.

We saw it in Britain, and we see it throughout the world. Populist movements are occurring in Germany where manufacturing is robust and exports are surging and in poor countries as well. What is the common denominator?

In my opinion it all comes down to mass immigration. Millions of immigrants are pouring into countries throughout Europe. And here in America we have witnessed millions of immigrants enter our shores over the years. There is a pervasive feeling around the world that nations are losing their culture, their traditions, and their national identities.

They are losing their language as a unifying identity, their neighborhoods, and they are losing the values they have known since birth. This is true in Germany, France and Britain, and many other countries in the eurozone, as well as here in America and throughout various nations of the world. There are sections in all of these countries where not even the police can go for fear of their lives.

The world-wide populist movement, I believe, is the result of a feeling that the citizens of nations are losing their national identity; and this affects them personally and deeply. It isn't racism, it’s cultural. The degree and speed of the change in the populations of countries has been disruptive. Donald Trump’s election was simply the latest expression of the disruption in people’s lives.

Is it true that bigots and racists have jumped on this bandwagon, of this nationalist populist movement?  Yes. But for the most part the movement is a desire to preserve cultures, not discriminate against others.

 

The second world-wide theme pushing nationalism and populism is the years of economic stagnation around the world. People have lost confidence in their political leaders to provide prosperity, and lately they've lost confidence in central banks to provide stability. Regardless of the various economic systems employed, all nations have suffered through years of economic stagnation, and crisis after crisis, and their patience is coming to an end.

When people lose faith in a better future they demand change, and change for better or for worse is what we’re seeing world-wide. Countries have been disrupted. Donald Trump’s election was simply the latest expression of the disruption in people’s lives.

And lastly, the motivation of nationalism and populism is exemplified by a world moving toward protectionism. Every nation wants to run a trade surplus. They believe it is in their national interest. But for every surplus, there must be a deficit. Expressed another way: for every producer there must be a consumer. Some nations can export but only if other nations import. The idea of free trade is to have equilibrium -- a balance of trade. This is achieved through free markets that allow prices to rise and fall on goods and services around the world and also wages. It is like a pendulum that swings toward exports then back toward imports; toward higher prices then lower prices. It is the "invisible hand" of Adam Smith at work. The great equalizer is competition.

 

But when governments stop the pendulum from swinging and dictate that exports are a national goal, trade breaks down. Nationalism and populism demand exports and block imports. We are entering a period where free trade is being replaced with nations declaring trade warfare. As I write this China has warned America that if we impose tariffs and quotas on their goods they will retaliate. Protectionism is an "us versus them" policy.
 
Donald Trump was elected on protectionism and nationalism – “America first”. He was elected to “make America great again”; to “win again”.  Over our 237 years as a nation, America has practiced free trade and has been, and is today, the strongest and most prosperous economy in the world. Protectionist nations are not. Hopefully cooler minds will prevail and we will not engage in a trade war which is unwinnable.
 
So Donald Trump and a slew of new republicans are in power as a result of fear of losing our national identity and the weariness of economic stagnation. I hope that in their attempt to remedy these very real problems, the new Administration will move toward freedom and free market solutions to our problems and not government force and mandates. 
 
It is part of America's national identity to give the power to the individual and not to the government to solve problems. The best the government can do is to unshackle American citizens from the burden to taxation, controls, and regulations while at the same time protecting Americans from force domestically and from foes abroad.
 
The goals and many of the policies of a new Trump administration are good ones. If they are implemented wisely and with freedom in mind they may indeed make America great again. But if they arise out of government force, authoritarianism, and heavy-handed mandates, they will make America worse off than we are today, and possibly much worse off.
 
America: proceed with boldness. But proceed wisely.
 
Paul Nathan
paulnathan.biz