Trump: revival or disaster for the US?
|Date:||24 January 2017|
What will Donald Trump bring by 2021? Bart van Ark, economist of the New York-based The Conference Board and professor at the Faculty of Economics and Business in Groningen, analyses the road ahead.
The presidency of Donald Trump may mark America’s turning away from an idealistic, imperfect meritocracy towards crony capitalism. Or perhaps, it could be a turning point to something better.
Potential paths ahead
One possibility is that there will be an unpredictable disaster, perhaps resulting from Trump’s erratic behaviour. But setting that aside, there are some other potential paths ahead. These are:
- Business as usual. The Trump presidency could mark a swing back to a conservative Republican agenda, which aims to revive the idealistic aspects of the meritocracy. After four to eight years, we may see another swing, back towards a Democratic agenda.
- Acceleration of America’s decline. This means a deeper entanglement between business and government, based on favouritism and state interventionism.
- A move towards America’s revival. The first two possibilities may fail, and be a wake-up call for America to get its act together and repair the deep divisions in society.
Who stands to gain and who to lose?
Who stands to gain and who to lose from these scenarios? These can be divided into several interest groups. There they are, listed from who stands to gain the most, to those most likely to lose.
- The Trump family and its entourage has much to gain as government and business interests are entangled.
- The U.S. business sector may benefit from policy changes under Trump, but a move towards crony capitalism would damage more companies than the few it would favour.
- The U.S. economy may see short term gains due to fiscal policy. But in the medium term there are some sources of slow growth, particularly weak demographic trends and slow productivity, that don’t seem to be the first priority of the new administration.
- Trump’s voters may see some short term gains in their interests. But in the medium term, the forces of technological change that have left factories empty require different policies than the ones Trump has on offer to really bring about change.
- The U.S. political system itself may stand to lose under this presidency. Divisiveness over how to tackle fundamental problems in the country can only get worse.
- Overall, the global economy does not stand to gain from Trump’s policies.
- Finally, the biggest loser of all may be America’s standing in the world.
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