Trump Nation’s Capitulation

Stock market crashes are almost always accompanied, if not provoked, by panic selling. Investors, large and small, sell everything fearing that no amount of market stimulus, or bromides, will rescue their fortunes.

There is no good news on any front -- be it employment, durable goods orders, commodity prices, emerging market economies, global conflict, or currency rates. There are no safe harbors. Large cap, small cap, high dividend yield, growth plays, IPOs, Triple A bonds, junk bonds -- all to be flushed.  Even contrarians can be swept up in the torrent of despair.

Flight from the status quo becomes a stampede. No instruments are safe except cash and gold. Precious metals other than gold get crushed like any commodity, joining stocks and bonds in freefall. Wholesale surrender. Sell, sell, sell!

The word in financial jargon is capitulation.

Trump Nation has capitulated.

Trump Nation is well beyond rage, and sending a message. Trump Nation is dumping every traditional asset imaginable; yes even the kitchen sink. Fundamentals, if any remain, are ignored. Nothing from the “old order” works. Nothing from the ruling oligarchy registers. Trust and belief in the status quo is long gone. Might as well get out.  Start over.

Trump Nation’s rejection of the political market -- and its psychological surrender -- looks and feels just like a financial market capitulation. Embracing Donald Trump is the equivalent of flight from capital into cash, despite the pain of accepting big chunks of realized losses. At least raising cash, in a financial crash, has a floor. It can’t get any worse.

Voting for Donald Trump is the desperation farm bankruptcy auction.  Raise whatever cash you can and then walk away from the stubble, from the overleveraged machinery, from the scourges of bovine TB, from perennially crappy milk prices, and nasty chores like cleaning up mastitis, and shoveling out the calves’ pens… not to mention decades without a day off.  At least a few hard dollars remain to start over.  All else is hopeless.

Some have foretold the Trump capitulation phenomenon as nihilism.  Walter Russell Mead back in August likened Trump nihilism to entertaining barroom banter.

“By flouting PC norms, reducing opponents and journalists to sputtering outrage as he trashes the conventions of political discourse, and dismissing his critics with airy put-downs, he is living the life that -- at least some of the time -- a lot of people wish they had either the courage or the resources to live…

“For voters who’ve come to believe that both parties are owned and operated by the kind of people who pay Hillary Clinton hundreds of thousands of dollars to make platitudinous speeches, who believe that the system is rigged and will never be reformed, that the candidates offering “real solutions to real problems” are fooling either themselves or, more probably, you, Trump at least offers the satisfaction of making the other rat bastards and pompous PC elites squirm. He laughs at them and makes them look small; he defies their hatred and revels in their pursed-lip disapproval. By incurring the hatred of the chattering classes, he seems to some voters to be signaling both that he hates the empty showmanship of the capital as much as they do and that, by making himself the enemy of the self-determined arbiters of the rules of the political game, he is throwing himself on the support of the American people…

“Trump is a sham, of course, but for many Americans in 2015 the whole political process is a sham. Trump, however, is an entertaining sham, and some voters think that if the establishment is going to screw you no matter what you do, you might as well vote for the funny one.”

Far from amusing, classical nihilism is peeing on your own ashes, heartily cheering complete destruction by scorching your neighbor, and oneself.  Nothing in the established social order is worth preserving. Repressive conditions under the Tsars in mid-19th century Russia gave rise to classical nihilism that has pervaded the Russian psyche ever since:

“Nihilism was a specific fashion style. Nihilism was a new approach to aesthetics, criticism and ethics. Nihilism was the contradiction between a studied materialism and the desire to annihilate the social order.

Trump Nation’s capitulation, if channeled productively could be a necessary cleansing political transformation. But can its practitioners know when to stop short of the modern equivalent of Russian nihilism?

And how will Trump Nation reconcile Trump’s nihilist inherent conflict between his material excesses, that benefit only him, and his mode of liquidating social order that betrays everyone else -- all shtick, no substance?

Instead, a more selective, and enduring, form of socio-political nullification might take a page from Maine wild blueberry growers who burn off the blueberry barrens every three to four years.

Burning off the blueberry thatch wipes out everything above the topsoil -- leaves, and stems, along with latent diseases -- fungus, insects, and invasive weeds. Burning the blueberry barren enables nourishment of the roots that are largely unaffected by the inferno.   Once the burn-off has purified above ground, fresh Potassium, Phosphorus, Nitrogen, and micro-nutrients below ground can replenish the blueberry stock -- and within two seasons produce bumper crops.

Burns on the blueberry barrens are managed by skilled operators, carefully gauging humidity, wind speed and direction, fuel oil ignition, monitoring equipment fittings, and spray nozzle pressure. Neighboring fields, woodlands, and homes are untouched; more than selective pruning, much less than salting the entire ground, certainly far removed from the sociopath recklessness of an arsonist.

So, what follows capitulation?  Just like the blueberry barren, typically, recovery and restoration. Ditto when financial market capitulation leaves behind a market structure, the means to rejuvenation. While the content of the marketplace may be abandoned, the governing lattice is not swept out.

While affirming the validity of capitulation, now the question is whether Donald Trump is the skilled blueberry barren burn-off operator, deft enough to cleanse the topside while improving fertility at its roots, preserving the surrounding fields, woodlands, and real property.

Is Donald Trump the statesman-in-waiting, best equipped to survey the charred rubble, and restore the republic?

Or is Donald Trump simply a crass opportunist without principles, except those that enhance his non-stop shallow and crude self-promotion? 

And is Donald Trump a fraud, a ruse, a charlatan, a phony, a hoax?  Is Trump mere brand, more illusion than faithful portrait? 

The answers are obvious. Trump Nation doesn’t really care. Capitulation is all the fashion, and all that matters now.