The Trump administration is constantly sending conflicting signals, noted Viktor Shvets, global strategist at Macquarie said, adding, "Trump, as well as the Republican Party, is basically channeling grievances, popular grievances across a range of areas and people and groups. Those grievances are not mutually compatible."
In an exclusive conversation with Moneycontrol, Shvets said that today’s Republican movement is far from unified. It's an uneasy alliance of three broad factions, each with fundamentally different worldviews.
Also Read | US Fed may no longer lead the global rate cycle, says Macquarie's Viktor Shvets
On one side are the tech elites, people like Elon Musk, Marc Andreessen, and Peter Thiel. “They’re globalists,” Shvets explained. “They believe that technology ultimately will reduce marginal and average cost of everything down to zero. They are against unions, they are against the government putting regulatory restrictions on what technology can do, how much technology can propagate.”
Ironically, some in this group even support universal basic income, viewing it as a method to support the economy.
The second side is the nationalist, parochial faction, which is made up of like Vice President J.D. Vance, Stephen Bannon, and Stephen Miller. “These people are very different. They actually want to return America to 1950s and 1960s,” Shvets said. “They want U.S. to save, invest rather than consume. They want to have traditional values. They want to almost completely close down immigration, legal and illegal.”
However, this group supports trade unions; they want to have trade unions to have stronger power.
On the third side, this group is made up of members, such as Scott Bassett, who believe in Reagan-era conservatism, with concerns on government spending and government debt. "They want private sector to take a leading role, rather than the public sector and more traditional conservative values," Shvets said. "And so all of these things are in contradictions."
"So when people ask, is America in favor of strong U.S. dollar or weak U.S. dollar? The answer is both. Is America in favor of free market or protectionism? Both. Is America in favor of unions or against trade unions? The answer is both."
Therefore, what the world is seeing, is contradictory signals. "There is no consistency in the grievances because Donald Trump represents a huge array of popular grievances across the United States that are not the same," the Macquarie strategist noted.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
