To say that the Trump Administration has been a volatile one would be sugar-coating it. I would estimate that when President Trump was elected, about 55% of U.S. citizens were devastated, 25% were curiously optimistic, and 20% were elated. That last group included what I consider to be the 5% of those who are diehard capitalist and the people who “run the money” when it comes to the markets. The stock markets, in general, have reacted very positively to this new administration.
The markets aren’t paying attention to the day-to-day scandals that are being reported by the mainstream media; but, they are looking forward to the Trump Economic Agenda, which I would say is the most pro-business agenda since Bill Clinton. There are four components to the administration’s economic agenda that could really change the fundamental landscape of the economy. Three of these are very republican in nature and the fourth is a very democratic concept.
The first thing that President Trump will attempt to do is to lower corporate tax rates. The U.S. does pay some of the highest corporate tax rates in the world, and he is looking to get that decreased. Cutting taxes is very republican and with Republicans holding both the House and Senate, this should be a no-brainer and very pro-business. His second item is regulatory rollbacks. According to Trump, “Global Warming is a hoax,” which the majority of people disagree with; but because of his beliefs, he has already and will continue to roll back the regulations of the Obama Administration.
Again, very republican and pro-business. Thirdly, on the republican side, he’s been touting fair trade as a large issue facing America since he was on Oprah in 1988. You can actually Google it (“Trump on Oprah talking about running for president”) and you’ll see that even in that interview, he was very passionate about the American business owner being taken to task by unfair trade deals. Lastly, and the one democratic economic policy on his agenda, he wants to do the same $1 Trillion spending deal that President Obama wanted to implement but the Republicans would never let him do. Trump realizes that our roads, bridges, airports and water lines all need to be updated and replaced, and what better way to get people to work than to implement a spending program that would employ hundreds of thousands of people?
This is something that the average Republican would never vote through, as they feel it’s fiscally irresponsible, as we don’t have $1 trillion we can just spend on infrastructure. Trump sees bringing on another trillion in debt over ten years at the current 3% long-range interest rate as a good investment. Heck, he’s probably never been able to get 3% of debt on any of his other business deals. A democratic move, but still pro-business.
Needless to say, the economy is starting to rev up and President Trump hasn’t been able to implement hardly any of his economic agenda. Our unemployment rate is now at 4.6% (Bloomberg.com), corporate earnings are coming strong, and companies all over the U.S. are looking for ways to put some of their cash hoard back to work. We need a strong economy to finally bring us out of what has felt like a ten- year recession, and there is a possibility that the Animal Spirits of the economy are going to move forward with or without the help of our Pro-business President. Perhaps U.S. businesses just needed a reason to hope for better things and this becomes a self-fulfilling prophesy. All I know is that there are still a lot of people who need not only jobs, but careers – and I’m hopeful that with or without the Trump Economic Agenda, the fundamentals of our economy are turning a corner.
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