Surprised? Get ready. More might be on the way

Donald Trump got it right: the United States presidential election was rigged.

He got fewer votes than Hillary Clinton but got elected because the system is distorted. We know about that: in 1978 and 1981 Labour got more votes than National but National ruled. MMP fixed that.

Trump was helped also by onerous registration and voting requirements, particularly in Republican-dominated states, which racial minorities and the less-well-off are least likely to meet (though the courts quashed some restrictions). Long waits to vote didn’t help.

That denied Clinton votes.

But, even so, was Trump’s win a “surprise” or a “shock”?

Not to those who in the past three or four years have watched and, as in this column, written about the rising populist tide in Europe and the United States since the global financial crisis.

In that light Brexit was not a surprise. And a year ago it was clear that the elite’s assumption Trump could not win the Republican party’s nomination was deaf to loud signals from the electorate.

Winston Peters on Thursday argued that point, referring back to his Northland win, in Parliament’s debate on the government’s Americanophilic congratulatory motion on Trump’s win.

But those factors alone did not determine a Trump win. Not finding it a surprise is not the same as predicting it.

The same goes for working out what might be the fallout from Trump-ism.

Exactly what he will do and what the Republican-dominated Congress will do with and alongside him can only be imputed at this point, given his wild campaign assertions.

We can say Trump will make American grate. (He just got the spelling wrong.) That is one potential backhanded benefit: that he is the catharsis that brings the United States over time to its senses.

His outsider-ness might also be, or trigger, the sort of disjunctive shock after which there is no return to “business as usual”. One possible version of that shock could be a breakout from the economic policy orthodoxy of the past 30 years.

We are at the midpoint in commemorating the biggest such disjunctive shock of the twentieth century, the first world war — specifically, 100 years on from the last three days of the deadly Somme offensive.

New Zealand troops fought in the September-October phase of this five-month trauma which pushed the Germans back 8 kilometres but at terrible cost on both sides.

In that phase the British made first use of their new invention, the tank.

While the generals, brought up on “business as usual” warfare, did not make the best use of their new weapon and so endured two more years of orthodox-driven deadlock, the tank did later change warfare when this lumbering, mechanically unsound machine was developed into a fast panzer weapon.

Does a tank lurk somewhere in the Trump-upset? Is he the awkward, mechanically unsound harbinger of a different way of managing economies?

The Financial Times’ Gillian Tett argues he is, that his iconoclasm might break the orthodox deadlock that has overloaded central banks with the task of restimulating economies.

Tett cites Trumpeters’ “batting around” of a “bewildering” mix of ideas linked by “a deep conviction that governments cannot reignite (economic) growth by relying on monetary policy alone.

“Rather, fiscal and supply-side reforms are needed.

“As a result … historians … may well conclude that the most important inflection point … is about the role of central banks.”

To remind: the big rich-country central banks have official rates (unsustainably) close to or below zero.

In effect, they have been waging battle according to doctrine written for past wars and rigged in favour of the better-off and best-off. The result: inflated financial and house asset prices and politically unsettling embedded inequalities.

Broadly the same here — till last Thursday. Reserve Bank governor Graeme Wheeler as-near-as-dammit called Thursday’s cut his last, in effect stalling his downhill slalom.

Well he might. Domestic inflation in the year to September was 2.4% and rising and the “weighted median” measure was 1.7% and rising. That is, Wheeler is risking pushing the inflation he can directly influence well above 2%. Only imported deflation keeps it low.

As head of economics John McDermott told the press conference, the economy is growing faster than potential growth. That is inflationary.

Why the cut, then? Wheeler: “Because we signalled it.”

He acknowledged “risks around how much more monetary policy can do”. Trading banks’ fixed-rate mortgage rises shouted that message earlier last week.

Wheeler is a pingpong ball on the global financial ocean, tossed around by foreign central banks and by financiers who play with the kiwi dollar and have made it the eleventh most traded currency.

The Trump shockwaves will stir up that ocean and the waves will wash up here. If Tett is right, those waves might add current to the rethink of doctrine going on in the Treasury, the Labour party and elsewhere.

If so, don’t be surprised.