Donald Trump What should we make of Donald J Trump? He claims he is smart and in one strong sense he is. He won the election. Yes, he lost the popular vote but that is not the point; he won the electoral college vote which is what matters. We should not forget that the Republicans also strengthened their grip on both Houses in Washington. And here we have something interesting. Trump articulates rage; the antagonism the forgotten middle class feel against the Washington elite. And yet it is an elite who gain most from Trump’s election. This is not the elite of the bureaucracy and the universities, but the big business elite, those with the huge pay packets. They are salivating at the prospect of big cuts in income and corporation tax and the roll-back of regulation. Some of these changes will be sensible; the treatment of taxation of overseas profits by US firms just does not make sense. And it is not clear that Dodds-Frank Act is the best way to regulate the finance sector. There is also a palpable revival of animal spirits in the US as evidenced by the strength of Wall St since the election. That is the good news and don’t knock it. The global economy has been lacking in animal spirits ever since 2008 and such spirits are essential for a strong economy which can deliver benefits to everyone. Unfortunately there is a very large ‘but’. Firstly it is not clear how a rampant Republican party will benefit the forgotten middle class with tax cuts for the rich and the repeal of Obamacare. Yes, some jobs will be created in the Mid-West as corporations are brow beaten into opening plants there rather than in Mexico. But increased costs through tariffs will soon eat into living standards. And as interest rates rise relative to the rest of the world, a rising dollar will reduce the attractiveness of the US as a manufacturing base. Secondly however smart Trump was in winning the election, there is no evidence that he is a particularly good businessman. He is nowhere in the same league as Warren Buffett, Bill Gates or the late Steve Jobs. It may be smart to use the bankruptcy laws to your advantage but it suggests that Trump has been bankrupt rather too often for comfort. Thirdly there is Trump’s approach to trade and diplomacy. He is an advocate of doing deals for the benefit of Americans, rather than the benefit of the US’s trading partners. This is a narrow and incorrect view of trade. Trade benefits both the US and Mexico or China or elsewhere; it is not a zero sum game. There is no evidence that the US has lost out in its trading arrangements with other countries. It is something similar with diplomacy; what strategic benefit does the US gain from alienating its friends. Trump’s attitude to Mexico is inexplicable. His attitude to Europe is also strange; whatever the faults of the EU and NATO, keeping Europe onside is ultimately more important that coddling up to Russia Finally, there is the rise of ‘alternative facts’. It is this that may well define Trump as a president. Truth has morphed into truthiness. Truth is what you want it to be, not what it is. Trump wants to believe that he attracted the largest inauguration crowd ever because that appeals to his narcissism and so makes it ‘true’. So, is Donald Trump smart? Yes, I would concede that he is but it is the smartness of the demagogue and a liar. It is not what you want from an American president.