The Trump Economy

Today, we’re talking about the Trump economy, and the state of the US market.

Love him or hate him, America is doing better than ever – Trump just can’t stop winning when it comes to a lot of political and economic factors.

In his first 2 years in office President Donald J. Trump has achieved results domestically and internationally for the American people – he is the first President in my lifetime that seems to be putting his own countries interest first rather than signing a bunch of international pacts that look after other countries more so than his own.

• The American economy is stronger, American workers are experiencing more opportunities, confidence is soaring, and business is booming.
• Why is this going on? What we hear in the media is that America is going through so much trouble
• President Trump has put the American people first and made government more accountable – he is one of the most transparent Presidents in America’s history.
• I will focus on the economics in this episode, but with that said, Trump has turned ISIS into an afterthought, and de-escalated tension with North Korea
• The share market may have corrected but it is still massively up.

The play by play:

America Economy is Stronger: American workers are better off thanks to President Trump’s ‘pro-growth’ agenda

Here’s the evidence

• Share Market – Still Up 33% since Oct 2016 and the ASX only up 7.5% since then
• GDP Growth – 4.2% – which has beaten all expectations
• Nearly 3 million jobs have been created – 304k manufacturing, and 337k construction (Highest levels since 2008)
• Unemployment rate has dropped to 3.7, the lowest rate in over 50 years.
  • Job openings have reached 7 million, the highest level recorded.
• Gallup Polls – 67% of Americans believe now is a good time to find a quality job
  • Only under President Trump have more than 50% of Americans believed it is a good time to find a quality job since Gallup began asking the question 17 years ago.
• Restored confidence in the American economy, with confidence among both consumers and businesses reaching historic highs.
  • Consumer confidence has reached a 17-year high
  • Manufacturers and small business confidence/optimism hit record highs
• Energy production – Net energy exporter
  • Trump travelled the world to promote the sale and use of U.S. energy

How he do it?

1. Work Force changes and taxation – Leading to confidence
2. Job training and workforce development to empower workers to seize more opportunities, signing an Executive order to expand apprenticeship opportunities.
   • This is great for an economy – Everyone keeps saying that replacement of humans by technology is going to replace us – hearing that for hundreds of years – but, we adapt!
     • Do you think that a medieval serf, where 80+% of the population were farming based populations – think that a computer engineer, or pilot would be an occupation?
     • We are adaptable – why we are the #1 species
3. President Trump signed historic tax cuts and Jobs Act into law, cutting taxes for American families and making American business more competitive.
   • Each American now gets more money in their account each week – Most Americans are now earning more due to the income tax cuts
   • The top corporate tax rate was lowered from 35 percent to 21 percent so American businesses could be more competitive. This has caused companies to bring back money into America.
   • President Trump has rolled back unnecessary job-killing regulations beyond expectations.
     • When you make it easier for business to operate – they do wonders for the economy
     • The free market can choose very efficiently – Someone gets sick from eating at a restaurant for example. In the modern age, someone has invented an app letting people know that it may not be the best restaurant to go to.
     • Businesses are incentivised to give the best service – or lose customers in the long run once loyalty runs out

In 2017, President Trump far exceeded his promise to eliminate regulations at a two-to-one ratio, issuing 22 deregulatory actions for every new regulatory action, saving $8.1 billion.

• Fair Trade – lower regulations
  • Since taking office, President Trump has advanced free, fair, and reciprocal trade deals that protect American workers, ending decades of destructive trade policies.
    • Torn on this – Free trade is good, but not everyone wins
  • Days after taking office, the President withdrew the United States from the Trans-Pacific Partnership negotiations and agreement.
  • Made good on his campaign promise to withdraw from the Trans-Pacific Partnership.
  • Opened up the North American Free Trade Agreement for talks to better the deal for the U.S.
  • Worked to bring companies back to the U.S., and companies like Toyota, Mazda, Broadcom Limited, and Foxconn announced plans to open U.S. plants.
    • Trump wasn’t entirely wrong. Companies from developed countries that signed up to the deal, such as Japan and the United States, would have outsourced to developing countries that have low-cost labour and fewer labour laws, such as Vietnam. In which case, unemployment in developed countries could have risen.
• Accountability and transparency – lower regulations
  • Accountability and Whistleblower Protection Act of 2017, improving processes for addressing misconduct
  • Government shouldn’t be clandestine – which has been the trouble in the US for a while now. They have never been too forthcoming with information.
  • Cleaning out the FBI and DOJ for individuals who allowed politicians to break the law
    • Likely chance that Military Tribunals coming in the next few months

Why this is all so important?

1. Gets barriers to the free market out of the way – Increases incentive and transparency
   • Peoples’ behaviours change over time in relation to what incentives are around
2. Gives confidence – Has a clear stable message – Strong leadership
   • If a country has a clear direction it goes well even in tough times
   • Example – War times, a uniting factor is the best thing for a country/culture
     • In WW2 the English were bonded – some even missed the war times, as back then they were all in it, bonded by their comradery, when they worked together for survival, helping one another
     • In Brisbane, Australia – In the floods people were really nice to each other, with strangers helping strangers
   • Hard to achieve in democracy – as there will always be tribalism. But unifying factors in countries are important
     • Has to come from what people want – having a good life and being free

Here’s the take away

1. Regulations and taxation hand in hand lead to a society declining in economic power
2. It has happened throughout history
   • Rome is a good example – Went away from a republic where there were many representatives, to an Empire with one dictator ruling them all, and it became a popularity contest.
3. It is the cycle of all empires – we just need to realise the signs and ignore the noise
   • Always vote for freedom over free stuff
   • It is trading good stuff now for less freedom in the future
4. It is best to focus on your individual freedom – Building wealth – Increasing your own ability to take care of yourself
   • Be wary of the trap of voting for economic instant gratification – Economic freedom is better
   • Instant gratification / Gain through handouts might feel good now, but reduces potential in the future
   • Working for what you own – nothing feels better. The first $1,000 I earned as a 14yo felt pretty good, especially at $8 an hour