Eric Orts and Theodore Ruger on the fallout from Trump’s election

Donald Trump was elected the 45th president of the U.S. in a stunning victory that defied the expectations of polls. He becomes the first modern president without military or government experience, besting Hillary Clinton on the strength of rural, white voters who say they are concerned about their jobs disappearing overseas and sick of the political status quo.

Global markets dropped, U.S. stock futures fell and the dollar began to slide as Trump’s victory solidified on election night and in the early hours on Wednesday. But markets later recovered, as Trump delivered a victory speech that urged reconciliation after a nasty campaign.

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Donald Trump by Gage Skidmore on 2011-02-10 12:47:12
Donald Trump

Wharton legal studies and business ethics professor Eric Orts and University of Pennsylvania Law School dean Theodore Ruger appeared on the [email protected] show, part of Wharton Business Radio on SiriusXM channel 111, to discuss potential fallout from the election. Here are five keys points from their conversation. You can listen to the full podcast at the top of this page:

Red Flags: The first sign of trouble for Clinton, according to Orts, was that the vote in “Virginia was so close, even though she ultimately won the state. The loss of North Carolina was a bad sign; after holding a huge rally in Philadelphia, Clinton got on a plane for a midnight rally in North Carolina hoping to have that as a bulwark,” he said. “And then when Ohio went down and you started to see it close in Michigan, that was when I said this was looking pretty bad for the Clinton campaign.”

Orts also noted that voters in large urban areas such as Philadelphia, Cleveland and Milwaukee could have saved those states for Clinton, “but [voters] were not motivated. They did not come out; the younger voters were not mobilized as much as we saw in the Obama campaign.”

Other Trends: Ruger noted that the down ballot story is ambiguous on whether the election truly represented a Republican sweep. While Trump’s candidacy seemed to boost statewide candidates in North Carolina, down ballot Democrats in Pennsylvania largely won their races, save for Katie McGinty’s failed bid for the Senate. “We have to analyze what went on at the top of the ticket [in Pennsylvania], whether there was some gender bias – we have to ask that.”

Orts pointed out that Libertarian candidate Gary Johnson “took from both sides” and that even the small number of votes garnered by Green Party candidate Jill Stein would have made a difference for Clinton. “Clinton had trouble getting the Bernie Sanders enthusiasts on board. I’m not sure they all did and some probably went to third parties,” Orts said.

The Impact of Globalization: The larger story of why what was once called the “blue wall” of Rust Belt states like Ohio and Pennsylvania crumbled is about globalization. “A lot of manufacturing jobs were lost over the years of 2008-2009, during the recession. People saw Wall Street guys getting bailed out; nobody was really taking responsibility for people losing their houses, losing their jobs,” Orts noted. “Statistically, there has been job growth [since the recession], but a lot of the basic manufacturing jobs people had had were gone…. There was a lot of anger seen about this in the middle parts of the country.”

Studies show that the single variable most voters cared about in this election was “making a change,” Ruger said. “It was more important than the economy, more important than national security. Among voters who prioritized making a change, 83% went for Trump. It remains to be seen how this translates into governance, but it was a protest vote.”

“Among voters who prioritized making a change, 83% went for Trump. It remains to be seen how this translates into governance, but it was a protest vote.” –Theodore Ruger

Key Issues: Ort said if Trump follows through on his campaign promises, policies to combat climate change could be in serious jeopardy. “If the U.S. comes out of the Paris agreement, already people are saying Paris doesn’t go far enough; if we lose U.S. leadership and lose possible deals with China on this, we’re almost certain now to face extremely severe consequences within a few decades.” The refugee problems currently facing Europe would be dwarfed by future surges in refugees and global conflicts over access to water and food, Orts added, and without leadership from the government, businesses will have to mobilize on their own to combat climate change. “A wall is not going to solve this problem.”

Another key issue is the future of health care and the Affordable Care Act, more popularly known as Obamacare. It would be difficult to outright repeal the legislation, Ruger said, but its functioning — “which was already somewhat wobbly” — is clearly problematic. “There will be somebody in the White House, in control of the executive branch, who doesn’t support funding the exchanges or making the fixes the statute needs to function,” Ruger said. “I’m very pessimistic about that.”

There is a lot of uncertainty about how Trump will fill the thousands of political appointee positions that he is about to control. One place where the picture is clearer, Ruger notes, is the Supreme Court and replacing late Justice Antonin Scalia. Trump released a list of possible replacements that was “surprisingly conventional – qualified judges who happen to be very, very conservative.”

“[Trump] says he wants to make America great again and that includes not heading us into another recession in 2017.”  –Eric Orts

Optimism for the Future: If Trump truly believes the comments he made during the campaign about women and minorities, “then we’re in for a very dangerous world,” Orts said. But he saw some room for optimism in Trump’s drive to be successful. “He doesn’t want to fail; if he pursues a lot of his policies, a lot of economists have said he will crater the economy, [create] massive unemployment,” Orts noted. “I think there is hope in that he will want to be successful…. He says he wants to make America great again, and that includes not heading us into another recession in 2017.”

“You’re essentially saying it’s a good thing he doesn’t stick to what he says,” Ruger added. “If he does want to succeed, he may take a more centrist path.” And other election results point to voters being in favor of that Ruger said, noting that three states approved recreational marijuana initiatives, Colorado passed a right-to-die bill for terminally ill patients, and taking a page out of Bernie Sanders’ playbook, voters in four states raised the mandatory minimum wage. “If you view Trump as a protest vote, it was about working-class angst, as much as the specific policies Trump spoke about,” Ruger added.

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