How the next four years are going to feel

The vibe shift in the US is leading the Western World. It's time to take The Sniff Test.

Forewarning

Geopolitician George Friedman reminded us this week that times define presidents rather than the other way round. Trump is symptomatic of where we sit in a long cycle in which the US is leading the Western World. It’s all making sense to the scholars predicting a crisis around 2030.

At any one time we are in three cycles. There is the transition between left and right every four or five years. Then there are decades-long political and economic cycles, and there are epochs. In the West we are in the Enlightenment Epoch, but a lot of the world isn’t and there are those hellbent on taking us out of it. It’s happened before.

Friedman informs us that ineffective presidents are elected at the end of 50-year cycles. Ineffective is an epitaph applied after the fact and ignores that there was little the president could have done differently. The ensuing chaos allows an incoming effective president to carve their name in history. Andrew Jackson, Franklin D Roosevelt and Ronald Reagan were such presidents. Friedman concludes,

“A transitional president like Reagan, Roosevelt or Jackson tends to usher in shifts that are often despised by the establishment until they are successful. One does not need to have supported Trump’s election to see how it will play out.”

A Vibe Shift

In the UK, Labour represents more of the same. For decades, the country has drifted left as many in the West have, embracing higher debt and increased state involvement in the economy. Now green politics and government are made for each other, because they provide a whole new reason to spend and a source of funding for uneconomic investments.

Labour is nothing new, despite its manifesto promises. Doubling down on what isn’t working is not change. Starmer meant change the people not the policies and he pushes harder on tax and spend. The expectation in the US is that Trump means don’t tax and still spend, but the noises he is making and the stir his appointments are creating, suggest more.

The US is undergoing a vibe shift and a political shift. The vibe is summed up in the ‘bros not hoes’ meme, pushing back against cultural opinions associated with a particular type of white woman. The political shift is reflected in the horror some of Trump’s nominees for office has generated, which I have no doubt amuses him. When 92.4% of Washington D.C. votes Harris for President, it’s no surprise Trump favours outsiders.

Too Far Left

Musa Al-Gharbi is the author of We Have Never Been Woke. If like me you cannot get enough election analysis, his is fascinating and highlights the trends through the last three electoral cycles. If you can’t stomach another election piece, the TLDR is Democrats shifted too far left at the same time as white women embraced the party. Here it is in pictures.

Democrats veered violently left in the past 12 years. They are much further from the average voter than Republicans, despite screaming extremist insults at their opponents. The centre still wins elections.

This is a crazy chart but look to the right first. A majority of women vote Democrat since 1996, while most men vote Republican. The bros not hoes vibe is a consequence of this.

The top three reasons voters rejected Harris are inflation, immigration and cultural issues such as transgender rights.

Source: Blueprint2024

The full list is in Al-Gharbi’s post and features two immigration issues. What Biden did matters more than what Harris might have done. Voters re-elect good governments and throw out bad.

What that means is interpreting the results of any election as a mandate for change is a mistake. The public expects promises to do things to be broken, but is much less forgiving of backtracking on commitments to leave things in place. Labour does not have a mandate for change, but will be hung out to dry if it cannot find the money it committed for hospital upgrades. Trump does not have a mandate for change, but he may try it anyway.

Al-Gharbi has some other beauties. Gen-Z and Millennials are drifting right while those over 65 shift left. The Democrats had more money and more billionaire backers. The media narrative is wrong because it peddles what commentators want to be true as fact. Election losers spend all their time imagining why people didn’t vote for them, rather than studying why they lost.

Bluesky Thinking

Trump is the grey warrior Friedman and the Fourth Turning predict for the end of a cycle, but his team are Gen-X agents of change. History teaches this does not end well and both theorists expect it will be a new generational leader, a Millennial, who emerges as the next effective President. What is the next four years going to look like while we wait?

Trump’s team are pro technology, crypto, innovation, growth, entrepreneurs, energy and defence startups. They are passionate nationalists. They are optimists who believe change is good and comes from challenging the consensus.

The book-burning, cancel culture, stop-the-world environmentalists are the ones who want an end to progress. The forces of inertia defeated those of progress twice before, when Sparta crushed democratic Athens and Savonarola’s zealotry overthrew the Medici’s. Enlightenments do not have to last forever.

If you hate Trump you’ve probably switched to Bluesky. This is where Guardian journalists hang out with people who want to cancel Elon Musk. Meanwhile Musk targets $2 trillion of cuts from the federal budget, which is a third of total spending. How’s he going to do that?

He’s not and he knows it. Musk makes outrageous claims, fails to back them up and then makes new ones. He defines the direction but not the speed of travel. The federal government’s discretionary spending, including defence, is less than $2 trillion. 10% might be cut, but regardless, there is going to be lots of noise.

America spends far more on health than any other nation, yet its people are less healthy. Over prescription of drugs and crap in the food are the main causes. Trump wants RFK Jr. to change this, which triggers a media outcry. They say he is a conspiracy theorist with no medical training. True, but he has a point.

The development of personalised healthcare will be one the biggest changes of the next few years. When most symptoms are met with advice to take paracetamol and drink lots of fluids, how could it not be. The change will be machine driven and have to overcome entrenched interests in the medical and food industries. I cannot wait.

Three Bad Options

Trump’s team is bad news for European governments who will see their favourite global gatherings defunded. Nobody told Keir Starmer, who took 470 delegates to COP 29 when no other major world leaders attended. Stock markets have seen this coming for years.

The beginning of the end was the financial crisis of 2008. Started in America, suffered elsewhere, this triggered the money printing response that is the end game of the long economic and political cycles. How should we respond?

My financial adviser loathes crypto. He disapproves of my holdings even though we have the same investment thesis. Governments spend more than they tax and there are three ways to address this.

First, tax more. Rachel Reeves is pushing the limits and farmers and small businesses are pushing back. Trump most likely will result in US companies paying less tax. Option one is just too small to make a difference.

Governments might spend less, but can’t. The people did not vote for less. Cutting spending is the fastest way to lose an election and the Republican congressional majority will melt away when laws hurt a politician’s home state.

The remaining option is more of the financial engineering we’ve seen since the financial crisis. There are going to be a lot more dollars, pounds, euros, yuan and yen floating around and they will find their way into capital markets. Bitcoin is an extreme play on this, shooting up when governments spend more and collapsing on every threat of cutbacks.

Should Musk manage to curb the US deficit he would kill crypto, an irony given he’s the poster boy. This is the one thing that would end his reign as the leader of the bros. Not going to happen.

The times are always changing, but sometimes change is faster than others. Uncertainty and anxiety are going to grow over the next few years. Trump’s team will follow through on America first, leaving Europe to flounder without a tech industry, its own energy, or raw materials.

The vibe from the US feels totally different from that in the UK, where we are playing the old tune. The politicians hope to wait Trump out and that things go back to where they were. But where things were was a mirage, as Democrats just discovered.