Donald Trump´s unexpected victory on the 8th of November of 2016 came as a surprise all over the world, leading to headlines such as ‘Trumpocalypse’ for the French newspaper Le Figaro, or ‘Estados Populistas de America’ in the Spanish tabloid ABC. The obtention of 289 delegates, 19 more than needed, made him one of the most voted for Republican candidates in a presidential election with most of the keys to his success coming from the connection he accomplished to build with a huge segment of angry voters: black, hispanic and white, who had seen their wages cut and economic situation being worsen. Furthermore, he emphasized the economic protectionism of his future administration, something that never was on the agenda of the historically pro-free trade GOP.
Most of the Republican heavyweights such as George H.W Bush, Ted Cruz, Jeb Bush and Mitt Romney, despised Trump because of his inflammatory rhetoric against illegal immigrants, especially regarding his remarks on building a wall on the southern border. But Trump won the GOP Primaries, against all the predictions of the polls, managing to defeat Hillary Clinton. His speeches against the corrupt political establishment, labelling his rival as ‘Crooked Hillary’, managed to even attract towards him a significant number of pro-Bernie Sanders supporters.
Trump´s victory however shouldn´t be interpreted as the victory of a lone outsider such as a Ross Perot look-alike in 1992 or even as a victory against a two-party system. Instead, it should be seen as a manoeuvre of a certain element of the establishment to retake power. That clique is a collection of neocons such as John Bolton who served as the US Ambassador to the United Nations, during the Bush Administration from August 2005 to December 2006. Also one of the leaders of the ‘Moral Majority’, Pastor Jerry Fallwell, endorsed Donald Trump early on and David Petraeus, the top US commander during the campaign in Iraq during the George W. Bush administration, supported Trump and is now a strong candidate to become the Secretary of State. Furthermore, Mitt Romney, whom initially was sceptic of the tycoon´s intentions and speech, has jumped to the first stage, and his name is also being considered for the top diplomatic position. Mitt Romney has also strong links with the Moral Majority coalition and with Mormon voters who hold powerful political leverage in key states. Romney also is a close friend of Benjamin Netanyahu who labelled Trump as a friend of Israel. Richard N. Haas, head of the Council on Foreign Relations, and special assistant as well as National Security Adviser to George Wh. Bush endorsed Trump as well.
These names are just the tip of the iceberg, Trump has declared many times how rich he is, and therefore he doesn´t need the money of anyone but himself to run his campaign. Moreover, he opposed Wall Street’s greed , famously calling Jamie Dimon, CEO of JP Morgan Chase, the worst banker in the world.
Reality tells a much different story. Wall Street has in fact vast influence on the Trump campaign in the figure of Steven Mnuchin. Mnuchin graduated from finance at Yale University, jumping straight into the investment bank behemoth Goldman Sachs. After Goldman, he worked at SFM Capital Management, a hedge fund owned by the billionaire George Soros. In 2004, Mnuchin with the support of Soros, founded Dune Capital Management along with two other colleagues from Goldman Sachs. From that moment on, Dune Capital became a big player in the financing of Hollywood blockbusters such as Avatar, with 21st Century Fox.
Apart from Mnuchin, Carl Icahn and Steve Bannon are two names who deserved to be mentioned. Icahn, in fact, is one of the wealthiest men on Wall Street with a net worth estimated around 20 billion dollars. His business, Icahn Enterprise, has an astounding turnover of more than 800%. Steve Bannon, chief editor at Breitbart News, and chief strategist of Trump’s campaign, spent years at Goldman Sachs, where he became a partner.
Recently, Steve Mnuchin was appointed as Secretary of Treasury , an appointment that certainly puts him on the same path as many before him, starting with Bill Clinton whose secretary of Treasury, Robert Rubin, was from Goldman Sachs, George W. Bush who appointed former Goldman Sachs CEO Hank Paulson, or Barack Obama who appointed Timothy Geithner from the powerful New York Federal Reserve Bank. Those appointments marked a time of de-regulation of the banking industry, beginning with the derogation of the Glass-Steagall Act during Clinton’s presidency and the passing of the Gramm-Leach-Bliley Act, which fused commercial and investment banking, setting the scene for the crash of 2008.
One of Trump’s most significant economic goals is to abolish the Dodd-Frank Act, which specifies regulations for banks regarding liquidity and the quantity of loans they are allowed to make, in order to control the leverage index of the financial firms. The derogation of Dodd-Frank, would allow the banks to lend money to small businesses and likely once again start to be overleveraged.
It´s curious to observe how Wall Street, big pharmaceutical and oil companies, cashed in from the Trump victory, augmenting the value of its shares in the stock exchange the day after the election. Some of the biggest profiteers were defence companies. By 2:51 pm that day, the value of the shares of Raytheon were up 8%, Lockheed Martin 7%, and Northrop Grumman 5%. The reason of that is the predictable increase in defense expenditure under Trump. It is interesting to note that one of Trump’s closest associates is Joseph P. Schmitz, who served as a former executive with Blackwater Worldwide.
Donald Trump, far from being an anti-establishment candidate, it is in fact, a product supported by some of the same forces who backed the neocons. Trump implemented a triangulation strategy, maintaining some of the core messages of the Republican Party, such as the anti-abortion, pro-family and pro-life posture defended by the likes of House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. But at the same time Trump copied the anti-establishment rhetoric of Bernie Sanders to dismantle his rivals arguments. It’s a similar strategy to that used by Bill Clinton during the 1996 election, known then as triangulation and devised by Dick Morris, Clinton’s chief strategist at the time. Triangulation is based on presenting yourself as a third way party and distancing yourself from the traditional two-party politics.
Trump symbolizes the return of the neocons with a different face, an outsider against the establishment, but surrounded by them. The Republican Party needed a different strategy to retake power by distancing itself from the previous failed candidates: John McCain and Mitt Romney. The apparent power struggle inside the Republican Party served as a platform to increase Trump´s popularity and image as a David against the GOP Goliath, which contributed to attract towards him, most of the disenchanted people who voted for Obama. Trump´s triangulation strategy succeeded greatly.