Trump’s Agenda Could be Volatile for Market

Donald Trump won the presidency largely on nostalgia for his economic success in his first term. In 2016, he inherited a recovery from the great recession of 2008 and then accelerated it with a substantial tax cut, jawboning down interest rates and lifting some regulatory burden. The Dow rose 10,000 points from 19,000 shortly after his November 2016 election to more than 29,000 in early 2020 (pre-COVID). But, as Joe Biden ends his term, the Dow has crossed 44,000, a spectacular 14,000 point rise during his four years. And the DOW is the laggard index with the NAZ up 32 percent and the S&P up 28, the second year of double digit increases for both.

But Trump’s Day One agenda of tariffs, massive deportations and cuts in federal discretionary spending could have significant costs in terms of economic disruption and inflation. Trump, himself, finally admitted that his program could cause prices to rise. In his Sunday, December 8, Meet the Press interview, when asked about possible high consumer prices from his trade penalties, said, “I can’t guarantee anything. I can’t guarantee tomorrow.”

Although corporate leadership, especially in the financial markets, see mostly positive results from Trumps’ agenda, the construction, agriculture, and hospitality industry have all predicted significant impact on their costs from mass deportations of undocumented workers. And most economists still predict a bad effect from more tariffs and the possible trade war they initiate.

The latest consumer price index report is up (2.7%) confirming inflation is not yet tamed and the Federal Reserve faces difficult decisions on keeping the current rate or continuing to lower it. The American economy is entering a volatile 100 days as Trump launches his administration.

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There Will Be Blood

First day of Legistlative Session 2023 | Photo: Hugh Carey, The Colorado Sun

The headlines tell the story, “There Will Be Blood,” Senator Jeff Bridges, chair of the JBC is quoted in Denver Axios in a report of the state budget with a $1 billion gap and draconian cuts expected. Denver just passed a restrained budget without their usual amendments for add-ons from City Council.

• State and local governments cut 2025 budgets. Colorado budget writers warn “There will be blood”. (Axios 12-2-24) “Denver Mayor Johnston unveils slim spending plan for city”. (Axios 9-12-24)

This restraint is not a surprise. Recent reports highlight factors contributing to Colorado’s and the Denver metro area’s new fiscal reality:

• Population growth slowed dramatically since 2020. “Coloradans are making fewer babies and migration can’t be counted on to fill the gap”. (Denver Post 11-18-24)
• Metro area and state sales tax revenue stopped growing in 2023 and is now below last year - “Sales tax recession”. (Ciruli Buzz 11-14-24) This is within the context of a myriad of recent local government tax and wage rate increases. ”Is Johnston’s tax in trouble?” (Ciruli Buzz 9-12-24)
• Jobs growth in Colorado slowed in 2024. “Colorado’s job picture weaker than previously known.” (Axios 8-22-24)
• Federal dollars from COVID relief have ended and the Trump administration promises a new austerity and even cuts. End of federal COVID money means shortfalls for states and schools. (Governing 2-2-24)

Persons and groups planning new taxes and expenditures in 2025 will have a difficult environment.

Democrats’ Missteps Move Public Opinion Against Immigration

Ellis Island Immigrants | Photos: NYC Public Library

The White House and much of the Democratic Party establishment support of a chaotic and inadequate border policy since 2021 helped lead to a flood of migrants, which was not firmly addressed until too late in 2024.

Not only did the White House gridlock provide the top issue Donald Trump used for his political recovery and final campaign, but new polls show public opinion, including among Democrats, has moved firmly against immigration. A sad legacy for Joe Biden and the Open Border, human rights advocates who captured a policy for their clients and ignored the political cost.

The latest Gallup poll captures the massive shift in political opinion which started in 2022. In 1920 and 21, opinion was closely divided across increasing, decreasing, or keeping the same level of immigration. “In your view, should immigration be kept at its present level, increased or decreased?” The public is now more than 3 to 1 in favor of decreased immigration above increased. The 55 percent majority that want immigration reduced is the highest since 2001.

The change is impacting all voters, with 88 percent of Republicans for a decrease (up 15% from 2023), independents now 50 percent for a decrease (up 11% since last year) and 28 percent of Democrats (up 10 percent from 2023).

It provides the political leverage for the incoming Trump Administration to seriously advocate a near shutdown of immigration, massive deportation (potentially millions) and 25 percent tariffs.

KOA Election Night Coverage

The 2024 presidential election was slated to be close but became a Donald Trump and Republican sweep.

850 KOA live coverage and analysis of the early returns Tuesday, November 5, highlighted the difficult night Kamala Harris and Democrats were likely to have. Managing the booth for iHeartMedia was executive producer Ryan Schuiling directing field reports and guest interviews, including Senators John Hickenlooper and Michael Bennet. Kathy Walker, news director, Jeana Gondek, morning host, and Ross Kaminski, talk show host provided reports and analysis.

By 8:30 p.m., the pattern was set as states were called for their electoral votes and U.S. Senate races. My analysis during the broadcast:

• Polling showed Democratic weakness with the Hispanic/Latino community and the early-reported, massive Dade County and Florida votes for Trump, was ominous for Democrats.
• Weakness in the Wisconsin returns for Harris highlighted the Blue Wall was fragile and Trump could win at least 5 battleground states. He won all seven.
• When Sherrod Brown lost his Ohio Senate seat, it became clear the Republican strength would affect down ballot races. At least six senate seats were in play. Republicans won 4 along with the House of Representatives.
• The highly competitive 8th Congressional District remained within a few thousand votes. Field reports observed both camps were hopeful but stressed, and went home as the snow piled up Tuesday night. By Saturday late votes gave the win to Republicans.
• Voters picked their way through a long and complicated ballot. Liberals in Colorado were pleased abortion and gay rights did well on the statewide ballot but the law and order position on parole, bail, and police funding dominated. Also, the Mayor of Denver lost his $100 million tax increase for housing. Statewide and Denver voters rejected bans of lion hunting, fur sales and a slaughterhouse. Finally, the multimillion dollar campaign for election reform failed.

The 2024 national election was a major shock for Democrats and much of the political/cultural establishment. America has entered a new political era and major changes are coming.

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Orange County Voters Support Law and Order and Democrats Hold Ground

OC Congressional Map via https://ocvote.gov

Three quarters of Orange County voters support Proposition 36 for stricter prosecution and punishment of drug and property crimes (69% statewide). Kamala Harris beat Trump by 2 points (20 points statewide) but Adam Schiff was losing to Steve Garvey by a few votes on November 19. Democrats were successful in three competitive Congressional districts. They won the Mike Levin Congressional seat (17,000 votes) and held the Katie Porter open seat with Dave Min (9,000 votes). Derek Tran is ahead of incumbent Michelle Steel (314 votes 11-19-24).

Also, OC voters supported school and wildfire, climate bonds (about 52% for each) and constitutional marriage rights (57%). Like voters statewide, they rejected housing bonds (38%), minimum wage (38%), rent control (35%), and banning inmate forced work (42%). As the table below shows, OC voters are about 5 points more conservative on each proposition.

Orange County maintains its reputation as a competitive county for the parties and moderate-to-conservative on the issues.

The Country Moves to the Right, Including Colorado

From left to right: Jeff Herd, Jeff Crank, and Gabe Evans

Immediately after the election, Colorado Democrats were arguing the state provided a Blue Wall and didn’t shift to the right with the rest of the nation, but the defeat of Congressperson Caraveo mostly ended that discussion. And in fact, Colorado voters, including many Democrats, were out of sync with the party’s direction on several key issues:

• Along with losing a congressional district that will help Republicans pad their renewed majority, they failed to win the 3rd District, which was within sight before Lauren Boebert moved, but is now represented by a Republican, Jeff Herd, likely to be in office for many years. The state’s other new Congressperson, Jeff Crank, represents a non-MAGA conservative leader, helping build a new center of the Republican Party. Also, Boebert, the Democrat’s chief antagonist, won her new district handily.
  
  
• The state’s voters supported a package of law and order propositions on the state ballot related to parole, bail, and funding police that are not part of the Democratic agenda. Animal rights groups lost bans of lion hunting, and in Denver, bans of fur products and a slaughter house were beaten solidly.
  
  Denver Democrats defeated their new Mayor’s $100 million sales tax increase for housing, reflecting exhaustion for new taxes and ill-defined programs.
  
  
• Democrats failed to achieve their top goal of a super majority in the state senate and lost their super majority in the state house. One of the state’s historic working class Democratic strongholds with a large Hispanic voting base, Pueblo County, gave Donald Trump a 4,000 vote edge, elected another Republican county commissioner and a Republican DA. The city already has a Republican mayor.

As Democrats return to D.C. facing a trifecta of dedicated opposition and local Democrats assemble at the legislature to manage a diminished state budget, they should realistically examine their policies and tactics in light of this election.

Election 2024: Candidate and Party Vulnerabilities

CU Denver School of Public Affairs | Photo via Instagram

In their respective 2024 presidential campaigns, the professionals in each party analyzed the opposition’s vulnerabilities and spent most of their campaign energy highlighting them. The following graphic displays each party’s weaknesses. Polling and content analysis show the Democrats’ vulnerabilities of incumbency, inflation and immigration were the greater liability.

Donald Trump’s greatest vulnerability was his own personality and character. Kamala Harris opened and closed her campaign focused on it. Harris’s biggest vulnerability was having been in office the last four years with the aftermath of the pandemic, the economic disruption – especially inflation, and a world in greater conflict. She inherited the weakness of the incumbent, President Joe Biden. And of course, Trump never stopped discussing immigration, which he linked to crime and all manner of other problems. Unfortunately for Democrats, the voters, even liberal Californians, are angry about crime and weak prosecution. They regularly remove controversial district attorneys. Although Trump’s personal focus on inflation and DEI was at a lower level, it was a major feature of online and legacy media advertising, especially during football games, “Kamala’s for they/them. President Trump is for you.”

Besides Trump’s personality, the Democrats’ most influential issue was abortion. Trump was never able to get around his responsibility for overturning Roe v. Wade and the extreme views of many Republican legislatures. Democrats also focused much attention on the threat to democracy that the January 6 violence posed and Trump’s responsibility for it. His authoritative rhetoric highlighted by the Madison Square Garden rally made it a major Democratic issue late in the campaign.

On Friday, November 8, Floyd Ciruli presented the “Vulnerabilities” at the CU Denver School of Public Affairs program on the election aftermath. Some 100 participants joined a Zoom panel discussion as a foot of snow closed the school. It was the last of a 5-session program on the election. Ciruli, a Senior Fellow of the school developed the program with Dean Paul Teske and moderated three of the panels.

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