I Just Don’t Understand (Suburban Republican) Women. But the Mandate is STILL for “CHANGE.”

I spent the last two days at a conference trying to wrap my brain around the emerging infrastructure of cloud computing.  Actually a welcome distraction from trying to comprehend the election.  But I woke up at 5:40 AM with brain buzzing so starting the catharsis here.

Mandate?  There is a mandate here, but its the SAME mandate for “change” that got Obama elected.   Seriously.  It is clearly NOT a mandate FOR Trump or FOR the Republican party (as much as they are trying to claim one).  Trump had 60% unfavorable ratings.  So a lot of Trump voters were holding their noses to vote against Hillary and the “establishment” she represents. An un-published post of mine from September 22 (full text below).   In 2008, Americans voted for CHANGE = Obama.

• They didn’t get CHANGE.  At best, they got “change.. ish?”  Obama himself is a cautious centrist.  Calling him a socialist doesn’t change the fact that, policy-wise, he’s a late 80’s Republican.  Hint – ObamaCare is just Massachusetts’ RomneyCare re-warmed.
• Moreover, the Republican Congress held CHANGE hostage.  Obama would get no victories large or small.  The threat was clear.  No CHANGE unless you elect a Republican President.  The assumption was that would be Jeb Bush, Rubio or some other guardian of the status quo.

8 years later, Americans are voting louder and angrier for CHANGE.

• They are calling the Republican’s hostage bluff.  Backing a (nominally Republican) change agent (and total wacko).  Same goes for Sanders.  The obvious common thread is CHANGE.

Worryingly, that message already seems to be slipping away in the post-election chatter.  I guess the chattering classes can’t handle the self-scrutiny.  Although that self-scrutiny is the key first step in real CHANGE.  So it could be a tough few years in that regard.

One thing that will help Trump is a stronger economy.  We will finally get the fiscal stimulus we’ve so desperately needed. That will take the form of un-paid-for tax cuts under Trump, but stimulus is still stimulus so I’ll take it.

Will that be enough to paper over the cracks in the Republican coalition?  It’s a certainty we’ll get an orgy of small-ball corporate special interest legislation (why the market is up).  But that’s not the CHANGE Trumps voters are looking for.  A question for later…

For the market, the interesting question now is the inter-play between equities and fixed income as money flees bonds as yields go up (pricing in inflation not real rate rises). Equities are a better inflation hedge, so they should benefit. Plus we have a recovering economy so we could be off to the races for actual fundamental reasons.

What did I get wrong?  

• Suburban Republican Women.  I thought Trump would turn off too many women in the suburbs.  They don’t want to pay taxes.  They live in communities designed to keep out poor people (who often happen to be non-white, but whose real sin is poverty).  But I guessed that Trump would be too much for them to stomach.  I guessed wrong.  53% of white women voted for Trump, according to CNN exit polls.  White women without a college degree supported Trump over Hillary Clinton by nearly a two to one margin. White women with a college degree were more evenly divided, with 45% supporting Trump, compared with 51% supporting Clinton.
• My forecast was NOT based on those women voting for Hillary.  It was based on them not showing up to vote.  Handing the “edge” of that rural/urban divide to the Dems.  But they showed up and held their noses.  And that was the election IMHO.

What did I get right?

• I did get the “angry populists vs elites” dynamic right.  I didn’t under-estimate rural, white working class despair.  I did under-estimate the white upper class’s loyalty to “Team Republican” even with Trump at the helm.  I think that’ll be a bad bet for them long-term (see below) but they made it.
• I did expect actual voters to differ wildly from the “likely voter” models of the polls.  I just thought it would skew the other way (disheartened women not showing up, Hispanics showing up).
• I did get that Hillary was the wrong candidate for the time.  My pre-election joke was “I wish Hillary had won in 2008 (grinding it out through the financial crisis) and Obama was running on “CHANGE” in 2016.”  Its not a joke anymore.  I just misunderstood how deeply that would prove to be true.

Kiss the Gig Economy Goodbye?  Repealing ObamaCare is going to be the first major “but can you govern?” challenge for those Republican majorities…  I’ve just married a wonderful woman with a steady job so I still have access to healthcare.  But how many other self-employed people are waking up to that worry right now?  All those Uber drivers…  Repealing ObamaCare is going to be the first major “but can you govern?” challenge for those Republican majorities.  I’d guess they make an even bigger mess of it than Obama….

I’m including below a piece I wrote Sept 22 but never got around to publishing.  Its embarrassingly “right” in its analysis and “wrong” in actually reaching the (now obvious) conclusion.  I guess I just don’t understand women (or at least Suburban Republican ones…).  But I still think this is best seen as part of a leftward swing although “establishment” Republicans already seem to be ignoring that at their (eventual) peril.

——————————————————————————————————

This is NOT a Democrats vs Republicans election.  This is a Plutocrats vs Plebes election.  A majority of American voters are clearly voting to re-balance a system they see as tilted in favor of the powerful.  The powerful are trying to keep things as they are.  Masses of people vs. masses of money…

A useful way to re-narrate the last decade is to cast the dynamic in power/class terms.  This is deeply uncomfortable for many in the national dialogue, but that’s sort’ve the point….  Anything to void acknowledging “everyone” isn’t middle class.

In 2008, Americans voted for CHANGE = Obama.

• They didn’t get CHANGE.  At best, they got “change.. ish?“
• Obama himself is a cautious centrist.  Calling him a socialist doesn’t change the fact that, policy-wise, he’s a late 80’s Republican.  Hint – ObamaCare is just Massachusetts’ RomneyCare re-warmed.
• Moreover, the Republican Congress held CHANGE hostage.  Obama would get no victories large or small.  The threat was clear.  No CHANGE unless you elect a Republican President.  The assumption was that would be Jeb Bush, Rubio or some other guardian of the status quo.

Standing behind that stasis was a numerically small number of people wielding a collectively HUGE pool of money.  They liked things just the way they are.  I call them Le Pouvoir.  But “Plutocrats” or “Davos Man” or “the 1%” (really the 1% and their 9-15% enablers) will do….  No need for a vast conspiracy.  A lot of elbow rubbing and group-think is all that needed to cohere them into a school-of-fish-like collective (non) action.  Extend and pretend….  Hope the bread and circuses are enough to keep the status quo rolling under a new set of slogans.

8 years later, Americans are voting louder and angrier for CHANGE.

• They are calling the Republican’s hostage bluff.  Backing a (nominally Republican) change agent (and total wacko).  Same goes for Sanders.  The obvious common thread is CHANGE.
• Le Pouvoir is in a bind.  Trying to thread the needle between avoiding Trump while sustaining gridlock in Congress.  And keeping Elizabeth Warren at bay at ALL costs (see below).  Funding Republican Senatorial candidates alongside a whole lot of foxhole conversions to the Clinton camp.

What is surprising is that anyone is surprised at voter’s deep disenchantment with Clinton.  She is nakedly the candidate of Le Pouvoir.  Sure I’ll vote for her.  Anything over Trump and the wack-a-doodle wing of the Republican party.  But I don’t think she’s going to satisfy “them.” And “they” are saying that loud and clear…

So the battle will continue on past November.  Who wins?  I’d bet on the side of the Plebes (spluttered out as “mob rule/the 47%/those people” over in the trenches of the status quotidians).

• The Plebes have little to lose (see “Trump”) and the prod of sheer awfulness across huge swathes of the American experience (on-demand flexible scheduling of part time jobs, Epi-Pen’s price increases, WalMart’s neutron bomb effect on small downtowns, Meth, etc… etc….).
• Le Pouvoir’s coalition will break down out of naked self-interest.  The plebes are a mass, but Le Pouvoir is small enough for individual action to matter.  And those individuals will defect.  Putting personal gain over collective self interest.  Discreetly starting to fund the “winning team.”
• Of course those change agents are just seeking power for their own ends (see Elizabeth Warren).  But that pursuit of power will still drive change.

Looked at another way, it is really hard to thread that needle of populism vs Pouvoirism.  I think there will be too much money that leaks into funding CHANGE.  They’re in that metaphorical sled pursued by wolves.  They’ve already thrown out a whole passel of the weaker, less important passengers to those snapping jaws.  Why stop now?

So what to do?  Don’t plan for the status quo to remain.  I would position your portfolios and plans for a long swing left.  How long?  The same 20-30 year cycle as the post-Reagan swing to the right.