Donald Trump begins his second term in office today. His inauguration ceremony, which will be held indoor given the adverse weather conditions, is going to be very different from the one we witnessed 8 years ago, in January 2017. On that occasion, Trump unexpectedly won against Hillary Clinton, in a contested race in which she had won the popular vote but lost what actually matters, the majority in the electoral college.
Trump himself was surprised by that victory, and his first inaugural speech, while being as incendiary as one could have expected, occurred in a surreal atmosphere, in which half of the gigantic gardens in Washington’s National Mall were empty, as Trump was perceived to be a divisive figure, and to some extent an unknown quantity, from a political perspective. Four years in the White House then proved how divisive he was, and the high level of incompetence culminated in the disastrous management of the first phase of the Covid pandemic. This cost him the presidency, which returned, for four years, to the hands of the Democrats.
This time around the situation is completely different. In spite of extraordinary economic results, with dozens of millions of jobs created, and inflation having returned within reach of the central bank’s objective, public perceptions of the economy as being in a poor state, with unsustainably high prices for most Americans, have cost Biden his presidency. Kamala Harris wasn’t able to acheive the miracle of resurrecting the Democratic campaign. Trump won by promising a new golden age for the US, resulting from massive deregulation and a boost to new segments of the economy, including the incipient sector of digital assets, and within it that of cryptocurrencies.
Investors’ animal spirits have been in play since Trump’s victory in November, with a new upwards push for equity prices, the US Dollar, and the entire crypto space, but with the countervailing results of higher long-term rates, which could eventually hinder economic growth. The tech space, formerly Trump’s fierce opponents, has either supported his second ascent to the White House (with Elon Musk and Peter Thiel having sponsored the campaigns of Trump and Vance respectively) or else fallen in line (Mark Zuckerberg, Jeff Bezos, etc). All the largest tech companies have raced to contribute to the inauguration expenses, by donating at least USD 1m each.
Trump will likely deliver an even more incendiary speech at the inauguration, promising a further boost to the economy as well as mass deportation of illegal immigrants, heavy tariffs on China (using the possibility of keeping Tik-Tok alive for longer as a lever to obtain more concessions from the Chinese government), and indeed tariffs on all countries that refuse to get in line with Washington’s directives. His attitude will be as fierce as ever, as the new official presidency picture (see above) shows.
The picture resembles the one taken after his arrest in New York, where he was eventually convicted of 34 felonies, for which he received no punishment, as the judge recognised it was de-facto impossible to punish a soon-to-be sworn-in president. The picture has no sign of smile (as in the first official picture), a raised eyebrow and a semi-closed right eye, in sign of open defiance to anyone that dares to stand in his way.
As we discussed in several columns previously, this will not be a normal presidency, as testified by the launch of its own meme crypto-currency (the $TRUMP) on the eve of its inauguration. This is a gigantic conflict of interest, since his administration will decide on the regulation of all crypto activities. The second Trump presidency will likely transform the US liberal democracy into something new, which we will start discovering starting from today onwards.
