Trump’s policies mirror those of fascist leaders in the 1930s – who knows how the economy will react

The masters of the universe have clearly not been dethroned.

At moments of political rupture, we still look to that small group of dealers, brokers, investors and assorted money-movers in the City of London, New York and a handful of other lesser financial centres around the globe for insight, for direction. For answers.

Whether we do or don’t subscribe to the idea that there is wisdom in crowds, we are conditioned to accept the premise of wisdom of the global capital markets.

So what did the masters of the universe think of the dawning of the age of Trump? There was the now familiar initial dive into perceived safe haven assets such as gold, the Japanese Yen and the Swiss franc when the result swung the unexpected way.

But the rush to safety eased off. Riskier assets were not flogged at bargain basement prices. Stock markets in Europe even rose. They opened flat in the US. There was certainly no market crash, as some had predicted.

So all clear then? Are the markets welcoming our new bigoted, woman-groping overlord? This is the wrong way to gauge the impact of the arrival of Donald J Trump as the world’s most powerful man. In a sense, Trump’s impact is too complex and too significant for markets to calculate and respond to.

America is still the largest and most important economy in the world. And now it is in the hands of a man of total political inexperience who won a campaign with perhaps the flimsiest economic and fiscal policy platform ever taken into a US presidential election.

His platform is a mix of the mad, bad, stupid and – believe it or not – the reasonable. The mix of traditional left and right-wing economic policies mirrors those of Hitler and Mussolini and fascist leaders in the 1930s.

So there is, apparently, to be a tearing up of free trade deals but also much-needed infrastructure investment. There is to be rolling back of Barack Obama’s healthcare reforms but also attempts to control drug price inflation. Everyone will get a tax cut, but there will also be more paid time off for new parents. Unlike the rest of his party, Trump doesn’t even pretend to care about balancing the budget.

How seriously should we take any of this? Who knows? And then there’s the nativist crowd-pleasers: the Mexican wall and the deportation force supposed to round up some 11 million undocumented workers.

Was this merely campaign trail rhetoric? Or will it actually happen? Is there a serious possibility of 6 per cent of the entire US workforce being deported?

Who honestly knows?

We are in a desert of uncertainty. And of course the “free world” now rests in Trump’s hands – not just America. What damage could Trump inflict not just on existing trade deals, but the entire Western post-war military alliance? How would he respond to further armed incursions by Russia on Europe’s eastern border? Or a hot conflict between China and Japan in Asia? Will he bomb indiscriminately in the Middle East?

We are talking here about the kind of geo-political tectonic shifts that set off economic tsunamis. We haven’t asked these big questions in generations because we have had a degree of confidence in how the American hegemon would behave. That confidence today lies in pieces on the floor.

There is a universe of things we cannot know – or even hazard a guess at, for there is nothing to guide us. All we know is that Trump is heading for the most powerful job in the world and that he is a man of colossal ignorance and laziness. He has demonstrated no willingness to learn a policy brief, to talk with care about sensitive and weighty matters.

He has no respected economists on his team, barely even any economists at all. He is bereft of serious diplomatic advisers. So how are traders and investors supposed to act in the face of the vacuum? How do you invest in this climate? Where do you put your money?

Speaking of climate, the existential threat to the planet’s economy – global warming – was not even mentioned in the campaign by him. Trump has literally nothing to say on the threat of climate disaster on his policy website.

What hope that Obama’s strict new environmental regulations – designed to get decarbonisation action by bypassing Congress – will survive in the hands of a man who once suggested that global warming was a giant hoax designed to benefit China?

The reality is that financial markets are like the rest of us: deer frozen in the headlights of the oncoming Trump juggernaut.

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