Make the Economy Great Again
Tuesday, January 24, 2017
It has been a few months since I shared any of my thoughts. Maybe it was the busy holidays, maybe I had nothing to say, perhaps none of you have missed me.
First of all, Happy New Year! 2016 was quite a year of change. Besides the many market swings and a wild political environment, our company made changes to our business that were challenging, but necessary, and I am already seeing the benefits of those changes.
Speaking of change, I just finished watching the inauguration of Donald J. Trump, the 45th president of the United States of America. He ran on the theme of making America great again.
I am going to share some thoughts on making the economy great again. We will all start grappling with the reality of campaign promises and policy reality, yet I have no doubt that policy will change over the next four years.
It is obvious that we are about to experience a profound president-led ideological shift that will make a big impact on both the United States and the world. Not only will there be a shift in government policy, but also a shift in how government policy is pursued.
President Trump is a dealmaker who negotiates hard and doesn't mind playing hardball. He admires strong, can-do, profit makers. An example of that is the difference in the incoming administration s business experience relative to that of the prior administration.
Bridgewater Associates, L.P. defines the administration as the President, Vice President, Chief of Staff, Attorney General, and secretaries of State, Defense, Treasury, and Commerce. Under President Obama's administration, there were 122 years of cumulative relevant experience; 117 years of government and military experience and 5 years of business experience.
When you analyze the people President Trump has chosen for his administration, there are 138 cumulative years of experience. The years of government and military experience total 55 while the years of business experience are 83.
Just think about that comparison; five years of business experience between the people who ran our government versus 83 years of experience of the people who will be running our government over the next four years.
For our citizens who have been looking for a more business-oriented administration, it has just arrived. President Trump has proposed cutting corporate taxes, allowing repatriation of corporate cash overseas, rolling back the thousands of regulations that have been issued the last several years, lowering individual tax rates, spending on infrastructure, and rebuilding the military of this country.
The next 100 days will be very interesting and whether or not all of the president's proposals become reality has yet to be seen.
The reality is that our economy has only averaged 1.8-percent annual gross domestic product (GDP) growth over the last eight years. That rate does nothing to help the serious issues that face our country. It is my hope that the change of policy that is coming will increase that number dramatically and begin to make our economy great again.