03-02-2017, 04:20 PM
This thread title is an updated variation of the phrase "The economy, stupid," which James Carville coined as a campaign strategist of Bill Clinton's successful 1992 presidential campaign against sitting president George H. W. Bush.
According to Investopedia, Trumponomics describes the economic policies of President Donald Trump, who won the November 8, 2016 presidential election on the back of bold economic promises to cut personal and corporate taxes, restructure trade deals, and introduce large fiscal stimulus measures focused on infrastructure and defense. Trump's chief political strategist, Steve Bannon, has summed up these policies as "economic nationalism." Most pundits will defer to the shorthand of Trumponomics.
As with any U.S. president, Trump's fortunes will rise and fall on the strength of the domestic economy, over which he has only partial control. Indeed, a president's economic success is often as much a matter of luck as it is a matter of his fiscal policy. Where America happens to be in the economic and market cycles at the time of his inauguration has as much--if not, more--bearing on his success or failure as any domestic policies he might get enacted into law. Consider Herbert Hoover, who, for all his vast experience and business acumen, had the poor, dumb luck to come into office right as a speculative stock market was headed for a crash. Like Trump, he had similarly ambitious programs, but the twin tsunamis of a bear market and banking crisis overwhelmed Hoover's attempts to revive the economy. Bill Clinton, by contrast, assumed office after a mild recession, and benefited immensely from the dot.com boom over which he had little influence. In the case of "Boomerang Bill," as I like to call him, it's more apt to say that he presided over a long-running recovery rather than engineering it through economic policy.
Trump recently proclaimed, "To be honest, I inherited a mess.” In some respects, that may be true. But if we consider GDP, the U.S. unemployment rate, not to mention market trends (equities, real estate), Trump has very little to complain about and so much to fear. The economy is grinding along (albeit below its long-term average), and the stock market is booming, the latest rally of which can be properly attributed to "great expectations" about the salutary effects of Trumponomics, though it should be said that the stock market seems to be "getting well out over its skis" in the short run.
So let's start the discussion first by countering Trump's claim that he inherited a mess. He hasn't, though there's room for improvement, as pointed out in this article:
"The Economy Trump Inherited, in Two Charts"
https://www.bloomberg.com/view/articles/...two-charts
And FactCheck.org provided a more detailed glimpse of the economy that Trump inherited.
"What President Trump Inherits"
http://www.factcheck.org/2017/01/what-pr...-inherits/
All in all, the economy is in pretty good shape, though there are worrying signs. In addition, there is the omen of history, which is why Trump has much to fear. He's raised expectations sky-high, not least among his supporters. History has not been kind to Republican presidents: recessions are much more common during their terms in office, with the notable exception of Ronald Reagan, whose timing could not have been more fortuitous. (And as I have previously noted, there's certainly something to be said for timing.)
I would liken the economy that Trump has inherited to a baton that is passed during a relay race, a race that I would characterize as a race against time. I say that because so many of the voters that switched their allegiance from Democrats to Republicans in this past presidential election gave essentially the same answer when asked how much time they were willing to give Trump: "Two years."
That speaks volumes about the "patience" of many desperate Americans. The worst of the financial crisis was blunted, and the policies of Obama made up some of the ground, but not enough. Trump may well sprint to the finish line, or he could stumble badly. Time will tell. For now, Trumponomics is taking shape, and experts are already weighing in on the potential benefits--and pitfalls--of his economic proposals. I have my own instincts that I will comment on later...
According to Investopedia, Trumponomics describes the economic policies of President Donald Trump, who won the November 8, 2016 presidential election on the back of bold economic promises to cut personal and corporate taxes, restructure trade deals, and introduce large fiscal stimulus measures focused on infrastructure and defense. Trump's chief political strategist, Steve Bannon, has summed up these policies as "economic nationalism." Most pundits will defer to the shorthand of Trumponomics.
As with any U.S. president, Trump's fortunes will rise and fall on the strength of the domestic economy, over which he has only partial control. Indeed, a president's economic success is often as much a matter of luck as it is a matter of his fiscal policy. Where America happens to be in the economic and market cycles at the time of his inauguration has as much--if not, more--bearing on his success or failure as any domestic policies he might get enacted into law. Consider Herbert Hoover, who, for all his vast experience and business acumen, had the poor, dumb luck to come into office right as a speculative stock market was headed for a crash. Like Trump, he had similarly ambitious programs, but the twin tsunamis of a bear market and banking crisis overwhelmed Hoover's attempts to revive the economy. Bill Clinton, by contrast, assumed office after a mild recession, and benefited immensely from the dot.com boom over which he had little influence. In the case of "Boomerang Bill," as I like to call him, it's more apt to say that he presided over a long-running recovery rather than engineering it through economic policy.
Trump recently proclaimed, "To be honest, I inherited a mess.” In some respects, that may be true. But if we consider GDP, the U.S. unemployment rate, not to mention market trends (equities, real estate), Trump has very little to complain about and so much to fear. The economy is grinding along (albeit below its long-term average), and the stock market is booming, the latest rally of which can be properly attributed to "great expectations" about the salutary effects of Trumponomics, though it should be said that the stock market seems to be "getting well out over its skis" in the short run.
So let's start the discussion first by countering Trump's claim that he inherited a mess. He hasn't, though there's room for improvement, as pointed out in this article:
"The Economy Trump Inherited, in Two Charts"
https://www.bloomberg.com/view/articles/...two-charts
And FactCheck.org provided a more detailed glimpse of the economy that Trump inherited.
"What President Trump Inherits"
http://www.factcheck.org/2017/01/what-pr...-inherits/
All in all, the economy is in pretty good shape, though there are worrying signs. In addition, there is the omen of history, which is why Trump has much to fear. He's raised expectations sky-high, not least among his supporters. History has not been kind to Republican presidents: recessions are much more common during their terms in office, with the notable exception of Ronald Reagan, whose timing could not have been more fortuitous. (And as I have previously noted, there's certainly something to be said for timing.)
I would liken the economy that Trump has inherited to a baton that is passed during a relay race, a race that I would characterize as a race against time. I say that because so many of the voters that switched their allegiance from Democrats to Republicans in this past presidential election gave essentially the same answer when asked how much time they were willing to give Trump: "Two years."
That speaks volumes about the "patience" of many desperate Americans. The worst of the financial crisis was blunted, and the policies of Obama made up some of the ground, but not enough. Trump may well sprint to the finish line, or he could stumble badly. Time will tell. For now, Trumponomics is taking shape, and experts are already weighing in on the potential benefits--and pitfalls--of his economic proposals. I have my own instincts that I will comment on later...