Is populism becoming popular?
- The US electoral process has no consideration of the timing of the UBS WM morning call. The House and Senate are staying Republican. The presidential race is still undecided, with Trump in the lead in the electoral college.
- This may be the new economic reality. Social media promotes a form of direct democracy in countries where the constitution is for representative democracy. The result is political populism. Regardless of the outcome, markets will increase populist risks in other upcoming elections.
- Were Trump to win, it would represent a clean sweep with the legislature also Republican. However, as with Carter in 1976, an anti-establishment figure with little or no experience in handling a legislature may not be able to get their policy agenda through.
- Any president of the United States can end trade deals, impose tariffs (as per Nixon in 1971) and seek deport illegal immigrants (per Obama) without reference to Congress. But regardless of the result the message from this election may be that populist politics gives prejudice an outlet, which has long-term economic consequences.