How Donald Trump Has and Will Affect the Economy
By Michael Heinen
Just in case the news hasn’t come to anyone’s attention: Donald J. Trump is the newly crowned President-elect. Due to Donald’s volatile and unpredictable nature, it is nearly impossible to tell how the he will affect the economy in the long run, but judging by his proposed policy, which could change at any moment, we can extrapolate some general predictions. Since the general economy is a macro topic and so far in AP economics class we have only covered micro topics, I am not very qualified to talk about this topic. However, like a true American, I will make a passionate argument from an uninformed point of view: Donald Trump in total will be bad for the US economy.
Let’s take a look at one of Trump’s main intentions when concerning the economy: “I will bring back jobs from China.” And exactly how does Trump plan on doing this? By imposing massive import tariffs. A tariff is basically a tax and in this case, if China wants so trade with us, there will be more barriers and restrictions. Government mandated barriers and restrictions are almost always bad. Free trade is good. These limits will most likely limit specialization between the US and whoever they trade with, even though we both have comparative advantages. For example, China manufactures everything, because they have a surplus of cheap labor available. The US just can’t compete in that regard. So if that advantage diminishes because of government imposed barriers, inefficiencies will arise which is bad for the economy.
In the other side of the Trump coin, it can be argued that he will be good for the economy because he is a business man. However, Trump has always been the boss of his companies and as the boss he has total control and can do whatever he wants. This has given Trump strong authoritative impulses which make him believe he can fix the economy with more government intervention. An example of this government intervention is his proposed change to how student loans work. He wants to impose that people with a job and student debt need to pay a certain amount for a certain amount of time. Although I don’t know of this will be good or bad, it serves as evidence for how Trump sees a problem and reacts by wanting to solve that problem with more government instead of going to root of the problem which is usually the imposition of more government.
In the midst of these concerns, the NASDAQ has actually reacted positively to the election of Trump in the short run as seen here:
So despite my best efforts to stump the Trump, it seems as though the economy likes Donald being President-elect. In addition some actual economists with “degrees” believe that Mr. Trump will be a net good for the economy as seen here:
In conclusion, I will remain cautiously optimistic about Trump’s presidency, but predict that he will be bad for the economy against the opinion of professionals.
Conerly, Bill. "Economic Growth After The U.S. Election." Forbes.com. N.p., n.d. Web. 15 Nov. 2016.
Fiegerman, Seth. "Trump Could Be Bad News for Tech IPOs." Money.cnn.com. N.p., n.d. Web. 15 Nov. 2016.
Lobosco, Katie. "8 Million Americans Could Get a Lower Rate on Their Student Loans." Money.cnn.com. N.p., n.d. Web. 15 Nov. 2016.
Stewart, Emily. "With Donald Trump as President, Here's What Will Happen to the U.S. Economy." TheStreet. N.p., 2016. Web. 15 Nov. 2016.
Zumbrun, Josh. "GDP, Inflation and Interest Rates Forecast to Rise Under Trump Presidency." WSJ. Wsj.com, 2016. Web. 15 Nov. 2016.
I think this is a very debatable subject, but you really know what you're talking about and you use good evidence to back up your claims which makes this a very effective piece. I was very interested in learning about and understanding why you think Trump is bad for the economy. Free trade is definitely a topic that both types of economists and politicians alike have different views on. Personally, I agree; free trade is a good thing, especially when we trade with countries like China that specialize in goods and production that we have not and mostly likely cannot specialize in. I do however kindly disagree with one statement you made in your post, which is that as a boss you can do whatever you want. I know this isn't a huge point in your post and it really doesn't have much to do with Trump affecting the economy, but I want to make the point that all bosses of their companies act differently and treat their costumers, employees, suppliers, and everyone they work with differently. From an entrepreneurial standpoint, being the boss is the hardest part of the company because yes you can decide what you do with your company, but you are in charge 24/7 and you are the one doing most all the work. Again, Trump may have been a different boss than other small business and corporate business owners, but I just wanted to make a point that not all bosses take the advantage of doing whatever they want to. Going back to Trump and the economy, I think it's very important for everyone to see both sides of the story and see that some economists believe he will help the economy, which you have shown us in your post using graphs, and hear your side that you do not think he will be the best for our economy.
ReplyDeleteFuture presidents affecting the economy is usually something that is highlighted significantly within presidential elections, but this year, it wasn’t. It was interesting that you brought some true perspective on how he will actually affect the economy as president. Since Trump won the election, I was also cautious about the repercussions that might come with his newly found power. I am nervous that he will take things out of control, mostly with the things he says and how he offends people. I think that is enough damage to ruin people’s desire to spend money or support organizations that work to benefit the government or the people who run it. Trump supporters will obviously be willing to back him, but there has to come a time where power cannot dominate how the country will function. There will probably be a greater divide between the rich and the poor because we will have a president who advocates more for the dollars behind the rich, so it will probably be heavily unbalanced.
ReplyDeleteThis is extremely opinionated. Trump, as a businessman, could be great for our economy. He knows how to handle money, and despite his businesses declining right now, you can't say that he won't at least keep us from increasing the debt ceiling. The President-elect could very well be a great president, you have to give him a chance. I mean, it's not like he could be any worse than Nixon... Right?
ReplyDeleteI largely agree with your arguments on the effect of a Trump presidency. His proposed tariffs would likely cause inflation and greater unemployment. It has been stated by some that as a businessman he would be great for the economy. This is false. Businessmen attempt to generate greater profits in the short run often without consideration of longer priorities. For example, many politicians argue that we should eliminate welfare as they believe it costs too much. While this may cut costs in the short run, a strong correlation between children who use welfare and moving up the economic ladder has been established. In addition if it weren't for regulations businesses would take great risks and cut corners in order to create larger profits. However, this can have disastrous consequences.
ReplyDelete