Last week’s verdict against former President Donald Trump is significant. First, because it is the first time that an American president has been criminally convicted and unanimously by the jury which found him guilty of 34 charges against him. Then, because the most optimistic will say that despite its immense imperfections, despite the polarization of the American population at the political level, it is a sign that American democracy still functions. But in the end, what does that change in this race for the presidency? Nothing in appearance…
In the polls, Donald Trump was already leading the race against his rival Joe Biden by a narrow head. He was also ahead of him in the famous six states (swing states) which can make the difference on November 5. And on this level, nothing has changed. Opinion polls have not shown a drop in Trump’s popularity, nor an advance for Joe Biden. On the contrary, Trump fans are galvanized and convinced that their champion is the victim of a cabal. As for Trump himself, even though he initially grimaced as he left the court, he will now return fully to the campaign because with this trial, he had to be physically present four days a week in New York to attend his own trial. The New York billionaire will be able to travel the country and galvanize his troops.
Donald Trump will also have financial support, notably to pay his trial costs, because an investigation by the Bloomberg agency shows that the financing of Trump’s campaign is accelerating. Many bosses from Wall Street and even Silicon Valley (formerly Democratic) took up his cause. Another major fact: they no longer hide it today. Some because they do not want an increase in taxes on corporations and wealthy individuals promised by Biden, others because they do not want tougher regulations on bank capital, and others, like Steve Schwarzman, the founding CEO of the Blackstone fund, because they believe that the Biden administration is still too timid in its response against the pro-Palestinian demonstrations on American campuses.
And that brings me to the financial markets that did not flinch when Trump was declared guilty. Normal, again, because the verdict was already anticipated by the investors, in the jargon, we say “that he was already registered in the races”. All the more easily registered as let us not forget, this lengthy trial lasted several weeks and investors had plenty of time to get an idea of its final result.
But the most funny thing is that the popular votes in favor of Trump are votes – beyond ideology – criticizing Joe Biden for inflation rates and interest rates that are too high. Funny, because if Trump is elected, inflation will remain high… His reduction in taxes and the increase in customs duties against Chinese imports will automatically cause an increase in inflation, particularly imported inflation. And interest rates will not fall or not as much as expected by the American citizen, because of this inflation that they fear today but which will be accentuated by Trump’s tax, trade and budgetary policy. If the American central bank is so hesitant to lower its rates, it is also because of the possible arrival of Trump at the White House with an inflationary program. But now, these economic truths are insults to the spirit of the times and the swallows risk going on strike for Joe Biden.
