In how many ways should we regret the ascent of Trump?

I confess I see no hint of a “bright side” to this abomination. Have deeply-rooted anxieties ever settled on such a wretchedly unsuitable means of deliverance? It provides harsh evidence that the world is succumbing to irrationality and recklessness, regardless that its complexities and challenges have never required such collective focus and intelligence. There’s hardly an aspect of public discourse and policy-making that likely won’t be resultingly degraded over the next four years.

Is financial reporting immune to this? Obviously, this election extinguishes any faint remaining hope for adoption of IFRS in the US. Less predictable is the impact on IFRS elsewhere. It’s already been speculated here and there that the UK’s “Brexit” might generate a momentum (perhaps rooted in specific animosities against the standards, perhaps as much in generalized symbolism) for a retreat to at least partially “home-grown” standards. More broadly, we seem to be living in an age of resistance to the very philosophy that underpins the IFRS project. Here’s an extract from a recent commentary in the New York Times, by Ruchir Sharma:

• “The age of globalization generated great prosperity. As the flow of goods, money and people across borders surged, millions benefited. But the elite gained the most. And as inequality rose, it stirred pockets of fierce resentment among those left behind. When the great shock came, the discontented turned to nationalist firebrands, who promised to impose controls on free trade, global banks and immigrants. Globalization stalled. A new age of deglobalization hit full stride.
• That great shock came in 1914, with the outbreak of World War I, and it ended an extraordinary four-decade period of rising migration and trade. But that era provides clear parallels to the globalization boom that gained momentum in the 1980s and stalled during the financial crisis of 2008…
• Today, 2008 looks to be as clear a turning point as 1914. With global demand weak, and many nations erecting import barriers, trade is slumping. Measured as a share of global gross domestic product, trade doubled from 30 percent in 1973 to a high of 60 percent in 2008. But it faltered during the crisis and has since dropped to 55 percent.
• The flow of capital — mainly bank loans — is retreating even faster. Frozen by the financial crisis and squeezed afterward by new regulations, capital flows have since slumped to just under 2 percent of G.D.P. from a peak of 16 percent in 2007…
• In an echo of the 1930s, the slowing of trade, global investment and migration are further weakening the global economy. There are many reasons to expect that this new age of deglobalization will last, as the postwar order is under assault from both popular autocrats in emerging powers like Russia and China, and populist candidates in Western democracies…”

As a sort of shining embodiment of the borderless project, IFRS might come to resemble a symptom of all that’s now being rolled back. If nothing else, I suppose it has on its side that accounting standards aren’t likely to be high on any regressive tyrant’s to-do list, given the stickiness of any existing financial reporting system and its low public visibility. But would you be surprised at any development in this global festival of regressiveness?

As I mentioned, the coarsening and degradation of collective decision-making is a pure tragedy for the ages (assuming we can anticipate any more ages). If we study the US election purely as abstraction (which is certainly more appealing than studying it as a real thing), we can extract a sobering lesson in the malleability of interpretation and outcome. Certainly the polls comprehensively underestimated the possibility of a Trump victory. But bear in mind too that Trump received fewer votes than Mitt Romney did four years ago; that Hillary Clinton won the popular vote by more than (say) Kennedy’s 1960 margin over Nixon; that a shift of just a few hundred thousand votes across a few states would have achieved a different outcome; that almost half the US election didn’t even vote. This hardly constitutes a sound basis for a crazed plummet into ignorant right-wing extremity, but there’s little doubt this will be the direction. Whatever forward momentum we can glean from history, and whether such progress proves sustainable: these are always a tangled mix of the triumphs of some, the errors of others, and the bitter arbitrariness of the often-archaic moral and political structures in place around them.

If nothing else (and perhaps there really is nothing else), we can hope that puerility in one public sphere promotes greater acuity in another. For all the reasons noted above, and many others, making risk-appropriate capital allocation decisions with reference to any kind of long-term horizon will become more challenging than ever. It demands that organizations like the IFRS Foundation attain their highest-possible level of progressive, nuanced clarity, even if this only casts them as lonely, besieged lighthouses in a poisoned global sea…

The opinions expressed are solely those of the author