Published On: Tue, Apr 11th, 2017

Can President Trump translate his own business Success into achievement for American economy?

carlo-barbieriBy Carlo Barbieri

During his presidential campaign last year, Donald J. Trump summarized his plan to improve the American economy in four small words: “Make America Great Again.”

Now that he has resided at 1600 Pennsylvania Ave. going on three months, he has found that propping up a financial system that was slammed into the cellar nine years ago and has risen at an unprecedentedly slow pace isn’t going to be a quick fix.

The Trump triumph last November was met with some surprising victories. After a brief dip in stock prices, traders began working the numbers – and prices rose to unprecedented levels. But the hike in market prices still hasn’t equated to an increase in dollars in working Americans’ pockets.

Actually, gains in stock prices reflect anticipated higher profits, not always a healthier real economy. Even if the market keeps doing well, that doesn’t necessarily transform into better conditions for ordinary workers and consumers. At some point, higher profits come at the expense of wage gains, and that is a likelihood we will not know until time passes and circumstances continue to play out.

Ironically, at a time when workers for companies like McDonald’s are picketing for a $15-an-hour minimum wage, we are actually seeing some employers who deal directly with consumers – including McDonald’s – installing automated systems allowing customers to order their meals without interacting with human beings.

With situations like this going on, it is difficult to say with certainty what the impact of Donald Trump’s overall economic plan will be. Often, we can only speculate.

So, in this week’s column, we will examine what President Trump has done to date and comment as accurately as possible about the impact on the economy. Next week, we will go a bit further — to see how his financial foundation will affect America and the citizens of the USA in the near and far-off futures.

Even before Trump stepped into the White House as the 45th chief executive, he was beginning to impact the economy.  While still president-elect, Trump was working to prevent American companies that had threatened to take their factories and corporate headquarters elsewhere to reconsider.  And many did.  Ford and Nabisco didn’t go to Mexico after all, just for example.

And while Trump was at it, he slashed the cost of the Boeing deal for construction of a new Air Force One plane by billions of dollars.

Since taking office, the president has issued a number of executive orders in addition to presenting Congress with a lean budget proposal. At the same time, he took the promised step of exiting the Trans-Pacific Partnership trade deal so as to improve America’s bottom line and has revived the Keystone Pipeline proposal.

He has instituted a temporary immigration ban on a half-dozen nations – largely Muslim countries – to prevent terrorists from sneaking into the US as refugees. He wants all immigrants to be vetted by appropriate and proper means so the US won’t suffer more attacks by terrorists sneaking into the country under the wire.

Illegal immigration was a key issue for the Trump campaign. He has pledged to build a wall between the US and Mexico to stem the flow of undocumented workers and make Mexico pay for it. But Kent Smetters, Wharton professor of business economics and public policy, said statistics show that deporting these workers — estimated between 11 million and 12 million overall — would hurt the U.S. economy.

Trump’s plan assumes that if these workers were deported, native-born men and women would take over these jobs. “That’s just simply not empirically true,” Smetters said. “When you export undocumented workers, those jobs typically aren’t replaced by native-born workers” but by automation.

Smetters does see Trump softening his stance on immigration once he builds his long-promised Mexican wall. “If he gets that political win, everything will be more negotiable.”

Ironically, the Trump proposal that has helped the chief executive gain the most headway is infrastructure spending. Smetters said: “One idea is to focus on repairing existing infrastructure instead of building new ones. Repairs have the highest ROI [return on investment].” He noted that more than 400 Pennsylvania bridges need inspection in the next two years. If they fall into disrepair, “the disruption to transportation there could be very large.”

These are hands-on issues, things that everyone, rich or poor, blue collar or white collar, can see and grasp. If a bridge fails, if a train jumps a badly worn track, if a highway bridge collapses due to old age and poor maintenance, these are issues that people can perceive; that they can grasp and understand without explanation.

Clearly, President Trump’s financial mission now and during the remaining years of his term will be to influence on the economy at all levels for all people: To keep the stock market moving, to keep traffic moving on roads and highways; to keep businesses operating and maintain an inflow of employees – Americans, properly vetted immigrants and men and women of all nationalities who truly and honestly want to make a difference for the USA.

I do believe that, after have to frontiers safe, he will make his best to create a solution for the immigrants without criminal record.

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