Monday 5 December 2016

Trump may have luck on his side if the Great Depression repeats itself

Published 12/11/2016 | 02:30

President-elect Donald Trump and his wife Melania walk with Senate Majority Leader Mitch McConnell. Photo: AP
President-elect Donald Trump and his wife Melania walk with Senate Majority Leader Mitch McConnell. Photo: AP

There are almost as many explanations for Donald Trump's election victory as there are votes in the US electoral college. One of the less obvious ones, which has history on its side, is that Mr Trump is part of the 'fat tail' of the global financial crisis.

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This little bit of jargon is used to describe an event with long-term consequences which are difficult to predict. The fat tail of the crash of 2008 is turning out to be very hefty indeed and its consequences appear in the general disgruntlement across so much of the rich, democratic world.

History suggests we should not be too surprised. This was a great crash by any standards, but commentators were generally reluctant to use a phrase so reminiscent of the Great Depression of the 1930s. Perhaps they should have done, which might have made it easier to see how close the parallels are.

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