By Eric Peters, CIO of One River Asset Management, first published in Jan 2017
“There’s this whole culture of liberal art grads,” said the investor.
“They spend their youth in safe spaces, isolated from micro-aggressions.” Then it’s off to big cities. “They surround themselves with people whose political beliefs mirror their own; it borders on religion.” Political disagreement becomes anathema. They’re incapable of processing it.
“Why does anyone think Trump cares about these people?” he asked. “Does he actually care about a few million protestors from the bubble cities that didn’t vote for him and never will?” Nope.
“You see these people prancing around with placards, talking about a ripe time for revolution.” And he paused, sighed.
“What they miss is that they’re generally not the ones who do well in a revolution. These are the people who prosper in a rules-based, stable society where prosperity is more or less achieved based on education, merit.”
As societies grow more prosperous, they generally become more homogeneous. Increases in wealth support a stable social and economic structure, until severe downturns tear the national fabric. But that’s not where we are today.
Despite Trump’s rhetoric about American carnage, his arrival comes at a time of growing income inequality and general prosperity.
“This is not a scary time for America, rather it may be the opposite.” The strength of democracy is its flexibility, and Trumpism may, in time, be seen to be a deep knee bend.
“If The Donald fails to create a sense of greater shared prosperity, that will be scary. It’s a severe downturn during Trump’s term that should really worry us.” It’s hard to imagine that would not usher in socialism, or something even worse.
“The real problems in society emerge when their fabric is torn, when a candidate wins under controversial circumstances and the military intervenes. So we should all relax for the time being, because we’re not anywhere close to there yet.”
Again, this was first published just days after Trump’s inauguration in Jan 2017.