Published on “The Boca Raton Tribune”
On 04/11/2017 By 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 lived at 1600 Pennsylvania Ave. for some 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.
Still, 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 highs. 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. At some point, increased profits have a negative impact on wage gains.
Ironically, during the same period that workers for companies like McDonald’s are picketing for a $15-an-hour minimum wage, we are actually seeing employers – including McDonald’s – installing automated systems allowing customers to order their meals without interacting with human beings. As often happens, automation is taking a toll on the workforce.
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 distant futures.
Even before Trump stepped into the White House as the 45th chief executive, he began to impact the economy. While still president-elect, Trump prevented American companies that had threatened to take their factories and corporate headquarters out of the country 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.
The president and his aides have not been shy about trumpeting the administration’s record. Trump upheld a campaign promise by withdrawing from the Trans-Pacific Partnership, a massive trade deal between the US and 11 Pacific Rim countries. The move wasn’t met with unanimous hoorays. The decision drew significant criticism, including some from Republicans, who argued the move ceded economic control in the region of China.
In addition, the president signed a memorandum to clear the way for the Keystone XL and Dakota Access pipelines, two embattled fossil fuel projects opposed by former President Barack Obama and a number of left-leaning interests.
On Jan. 25, Trump signed the highly anticipated executive order calling for construction of a wall along the US border with Mexico. The wall was a top priority for the now chief executive during his campaign – a plan that wasn’t always received favorably.
In addition, Congress must still come up with a plan to pay for the wall – despite Trump’s protestations that Mexico will cover the check.
The president has also instituted a temporary immigration ban on seven nations – all of them 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.
Still, the prohibition was blocked in court, dealing the White House a stinging early setback.
In the same vein, the Trump administration has also begun an aggressive push to deport undocumented workers who have committed crimes – another of the chief executive’s campaign vows.
But Kent Smetters, Wharton professor of business economics and public policy, said statistics show that deporting these workers could actually hurt the U.S. economy.
Trump’s plan assumes that if these laborers are deported, native-born American men and women would take over their 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.”
Coincidentally, the Trump proposal that has gained him 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, people can perceive the sorry results; 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 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 the inflow of refugees — properly vetted men and women of all nationalities who truly and honestly want to make a difference for themselves and 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.