Guest Post – Early jump for Trump

Will Artificial Intelligence predict a Trump win correctly?

A reader emails:

You could be forgiven for thinking the election of Donald Trump was going to end civilisation or at least the USA part of it.  Dire predictions fostered by a biased media continue days after the election result.  It is both tiresome and juvenile reflecting not just a biased media but one that is immature and inexperienced and has lost any ability to demonstrate professionalism, independence and sound judgement.

President –elect Donald Trump made some unusual election promises, many of which will cost a great deal.  His catch cry of making America “great again” lacks some detail to be blunt but could mean extra spending in some areas of the economy.  A literal, or even figurative fence on the Mexican border for example will demand a hefty budget even if the Mexicans pay some of it.

One of Trump’s other big undertakings was to reduce taxes, especially corporate taxes.  He proffered this as the main catalyst for creating new jobs and more GDP growth.

How will this work?  

The first thing is that America under Obama has sunk many billions into climate change ‘black holes’.  This bloated budget was spent on low quality research, such as studying the mating habits of Agkistrodon piscivorus – the cottonmouth snake – after global warming.  Even more was sent to various third world countries to help protect them from the ravages of global warming and changing from high CO2 producing forms of energy to cleaner fuel like windpower.  Most of it ended up in the hands of lobbyists and consultants and no one cared.  Shutting off that tap will give Trump a useful cashflow.

Another source of quick dollars and a positive impact on GDP will come from tightening the borders and slowing the flood of imported goods stimulated by free trade agreements.  I expect Trump’s claims about what he intends to jettison and reform will get watered down but expect investment and new jobs in a wide range of economic activities benefitting from higher tariffs and other protective devices.

This is counterproductive, even dangerous in the medium term as the cost of living will rise and negative effects will flow on to the low and middle income earners but in the short term the gains could be sizable.

Lowering tax rates especially for corporates will yield an early harvest.  It will attract new investment and improve bottom lines with surprisingly more tax revenue likely to be gathered from a lower rate as Reagan found when he was President.  Once the business sector gets rolling it feeds on itself.

If Trump appoints someone with determination and strength who knows the weight of regulation on business, especially SME’s he will see quick and lasting rewards in growth and investment.

Many American cities are ripe for inner-city renewal and it would be sensible to have the public sector kick off funding such activity and the private sector follow.  It would be a powerful job creator.  It could also be a catalyst in healing the race divide.

Trump maybe justly accused of many things but no one can criticise him for a lack of entrepreneurial flair and creativity.  If he can elbow his way through the Washington alligator swamp without getting fatally bitten he could achieve a great deal and wear the “make America great again” tag with distinction.

Many of these measures are far from perfect and will have some negative medium term affects but they are capable of kick starting jobs and growth.

I expect Trump will see his job as a ‘nothing to lose’ situation and go for it.  The biggest challenge will be to put people around him who have guts and ability to smash through the bureaucracy and the lobbyist control of Washington.  If he achieves that even in small measure his Presidency will be memorable and worthwhile.

 

Name and address withheld by request

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