If Donald Trump was a start-up, he’d be the perfect disruptor.
I spoke yesterday about his Twitter exploits. A tool he uses to great effect in this regard.
And whatever you think about him and his policies, there’s no question he ran a brilliant election campaign.
Of course, years of railing against the ‘Washington elite’ from the Republican Party sowed the seeds of voter discontent.
Seeds Trump happily cultivated.
Who can forget the images of enthusiastic crowds — complete with MAGA baseball caps — chanting ‘drain the swamp’ in unison?
But the campaign was a lot smarter than a simple populist appeal.
What Trump managed to do was to get three messages out to three unique voter groups. This nuance relied on leaps of logic that would seem impossible to most observers. But not Trump.
And it worked. And now he’s President. And no we need to deal with it…
Which is why this is interesting.
Under sustained pressure, Trump has just played his second Ace card a few days ago.
I’ll explain what this is in a moment. And why he only has one left to play. (Editor’s note: Though he’s frantically looking for a new ace in Pyongyang.)
Trump’s political agenda is important for investors to understand.
Because when you understand the strategy behind his politics, you can understand where we are in the investment cycle.
And why strong share price growth could be set to continue for the rest of his Presidency.
It’s like this…
Self-interest trumps all
Trump, a thrice married, left leaning New Yorker, won the nomination of the highly religious, middle American, Republican Party.
Sure, he paid a little bit of lip service by saying the Bible was the most important book ever. But only an idiot would believe he was genuine.
The question of how he did it is an important one.
Well, first of all he realised that the hatred of Hilary Clinton was deep. As was the hatred of minorities. Both easy targets. Then he wiped the floor with the other Republican nominees, who he made seem weak in the face of his verbal assaults. He knew they had skeletons in their closets. A fact he was quick to exploit.
Trump on the other hand was a pretty open book. There was no ‘gotcha’ moment that would stick.
Having won the nomination, Trump stuck to this agenda, modifying it slightly to encompass three pillars.
The first big issue was the vacancy on the Supreme Court. With the number of left and right leaning judges balanced five all, the filling of the vacancy would be a crucial issue.
In fact, to a lot of people it was more important than who would be President, as these judges are in for life or until they choose to retire.
A Democratic appointed judge could tip the balance in favour of reforms on a whole heap of social issues like abortion, gun control, religious rights and the death penalty.
Voter block two was disaffected democrats. To these people he promised a massive infrastructure campaign to get America working again.
It had a blue collar appeal that certainly worked, judging by the Republican pick-ups of traditional Democrat states of Michigan, Wisconsin and Pennsylvania.
The third voter block was big business. The carrot here was clear. Cut taxes.
Last week Trump played the second of his three ace cards.
Though light on detail — and by no means a certainty to pass — Trump is clearly hoping that the impetus and self-interest of the business community will help him get this through. And in turn create a wave of investment into the US as big American companies like Apple [NASDAQ:AAPL] re-patriot funds to under a lower tax regime.
It’s a sound strategy from Trump’s political point of view.
And he’s hoping that a win here will cement economic growth for a second term.
The judge issue was settled early on in his Presidency with the appointment of Neil Gursch, a 49-year old Conservative judge.
The final card he’s got left to play is the massive infrastructure plan.
Donald Trump’s infrastructure guru spent part of 26 September at a conference in Washington promoting the president’s $1 trillion plan to rebuild the nation’s crumbling roads, bridges and airports, relying in part on public-private partnerships.
Aces high – advantage US stock market?
Right now, the only thing Donald Trump is hanging his hat on is the booming US stock market.
It’s in his strong interest to keep this going in the right direction.
With tax cuts and a massive infrastructure plan in the offing, he’s clearly got the firepower to give it a good nudge.
Whether or not these are good things in the long run for America, with its ballooning debt, is a discussion for another day. And both plans are not sure things, given they will also have to be paid for with cuts elsewhere.
The failure to repeal the hated ‘Obama Care’ showed that governing is a lot harder than coming up with thought bubbles from the sidelines.
But as Trump has shown from day one, it’s dangerous to bet against him. Maybe the smarter thing to do is to bet with him?
If so, tax cuts and infrastructure spending could prop up the US economy for a few years yet.
That’s good news for the stock market.
Editor, Money Morning