You don’t need to like, admire or condone Trump’s electioneering style to form the view that we may well be better off with him than any other recent predecessor, says Trevor Abrahmsohn…
It is evidently difficult to reconcile Donald Trump’s incendiary comments, puerile diction, mindless misogyny, homophobic remarks, bombastic and repugnant demeanour. However, whether you like him or not, his proposed policies of smaller government, less regulation, lower taxation, greater infrastructure spending, strategic and military pragmatism, are all laudable aspirations if, of course, you have a conservative bent.
After all, he has already proved that an unlikely candidate can attain the most powerful political position in the world by spending a third of the more usual amount spent by any other presidential candidate for the ‘top job’, whilst at the same time demonising a large chunk of the electorate.
It is somewhat of a paradox that a majority of Trump’s political support came from relatively poor, white voters and yet he made no secret of the fact that he is an obscenely rich billionaire. You can imagine what would happen to an aspiring politician in the UK, if the main plank of his or her mantra was that they were part of the “filthy rich”. British politicians do their very best to hide their wealth, for this very reason.
Since the Republican Party will control both Political Houses, Trump will be able to “borrow to invest” unbridled by the political process which stymied Obama, and the American Economy will undoubtedly be stimulated by this measure which will bolster its growth. He is a reluctant military interventionist and will ask NATO allies to pay their share of the protection under this umbrella which the USA facilitates with its huge defence resources and who can argue with this logic? Whilst he may question the efficacy of this august institution, say what you like, it has nevertheless maintained world peace for an unprecedented amount of time since World War II.
Trump has made it quite clear that he distances himself from the discredited and inept President Obama with his bullying and partisan remarks about the UK being at the “back of queue” for trading arrangements with the USA during Operation Fear, before the recent Referendum. One could observe that there may have been an illicit, informal pact between him and the former Prime Minister Cameron i.e. that the one would help the Remain camp propaganda machine, whilst the other made derogatory comments about the aspiring Republican candidate, Trump … thank goodness, both backfired and it had the opposite effect on the final Referendum result.
Despite Boris’ misplaced remarks about him hitherto, Trump, by all accounts, still sees the UK as a vital ally and strategic partner and clearly wishes to nurture the “special relationship” between both countries – even though his first welcome call to Prime Minister May, was 11th in the queue.
How does all this benefit the UK Economy and the Residential Property Market?
Now to the effects on the UK property market. It is widely known that in the sectors of middle to upper ranges, these have been greatly unsettled by the combination of the draconian Stamp Duty rises, fiscal changes for non-doms and buy-to-let investors, all of which were imprudently imposed by the former Chancellor, George Osborne. These have conspired, with the negative effects of Operation Fear, the unexpected Brexit result, plummeting oil prices, slowing of world economies and Russian sanctions which have, in aggregate, reduced the turnover of properties sold, by 70% and have eased underlying values by up to 35%, from the former highs achieved in 2014.
The UK currency devaluation, as a direct result of Brexit, has encouraged a number of foreign investors to buy properties in London and as such, they can benefit from a total discount of 50%, which is unique in the world today.
There is no question that the uncertainty as to whether the UK will be able to access the Single European Market and on what terms, after Article 50 is issued, is weighing heavily on sentiment. It is reassuring though, that the USA will give us priority with trading agreements in the Trump regime and this will greatly boost confidence and perhaps set a useful precedent in the present discussions with other major trading nations such as India, China, Canada and Australia, much to the chagrin of the Europeans, who may want to exact retribution upon the UK, for having the temerity to leave the EU.
If Trump lowers taxation in the US, Americans will flock to the UK using their enhanced dollars to buy or rent property and those already in the UK, will have a field day.
Since the USA and the UK have aligned economic models, if the former enjoys greater growth, this will have a contagion effect on the latter, whilst Europe remains in a parlous economic state, nursing a 50% unemployment rate (in the southern parts of their continent) and very low overall growth.
I am not sure what benefit has flowed to the UK from having President Obama in charge and, therefore, it does beg the question though, that you don’t need to like, admire or condone Trump’s electioneering style, to form the view that we may well be better off with him, than any other recent predecessor.
It has to be said, with all the potential candidates for the Presidency, if Trump and Clinton were the most eligible candidates, then something has gone systemically awry with the US political system.
Have we all been well and truly “Trumped”?
Trevor Abrahmsohn is Managing Director of Glentree Estates
Views of Contributors are not necessarily those of PrimeResi or its Publishers
Donald Trump by DonkeyHotey (CC-BY-2.0)