It was after the first presidential debate that I decided to vote for Hilary Clinton because I believed she would be better for the economy. I had been leaning in her direction already, but a friend thought that the country needed a “hard reset” as he put it, and Donald Trump would certainly fall into that category. There was a lot of talk about the presidential election being a choice between the lesser of two evils. If the hard reset theory was true, the “evils” to choose between were war (the traditional hard reset for us humans) and a completely unpredictable Donald Trump presidency.
There is plenty of evidence that not only the United States, but many other countries are experiencing strong divisions within their citizenry, and that tensions are leading to dangerous situations. In many places, there is strong anti-immigrant sentiment. Actually, it’s broader than that – physical and verbal attacks on people who don’t look, speak or believe as you do. This is that tension bubbling up, and wars – civil or otherwise – occur when too many people react to that tension and the actions of others. I would like to go on record here: I want to avoid war forever.
So, Donald Trump can theoretically be that hard reset without leading the U.S. into a war. The country is incredibly divided and tensions are very high, so what has to change to cool things off? While the economy is thriving in many areas of the country, it has left many people behind. They may have jobs, but they don’t like their jobs and they want something better. Mr. Trump has promised to increase infrastructure spending and military spending. When the government spends money, it creates jobs and generally fairly good paying ones. But every economic analyses of the President-elect’s tax and spending plans – conservative, liberal and non-partisan – conclude that the deficit will balloon because Mr. Trump’s projected 4% GDP growth rate is unattainable.
But what if that is not true? What if Mr. Trump is the one person who can pull it off?
The incident that makes me wonder about that occurred a week ago. During the Tampa Bay-Dallas NFL game last Sunday, the Cowboy’s Ezekiel Elliott dove into a large Salvation Army kettle after scoring a touchdown. The next day, donations to the Salvation Army rose 61%.
We are a country of sheep – and that can become our greatest asset. When we see a famous person show support for an organization, we jump on board. The ALS ice bucket challenge on Facebook a couple years ago is a perfect example. As a result of the challenge which featured the famous and non-famous alike, national and regional chapters of the ALS Association received $128 million in donations, which was about a 450% increase over the donations received in 2013. People in the United States respond well to this kind of high profile attention, and therefore, we will probably respond well to what President Trump tells us we should be doing. He is the ultimate reality television star after all.
Economists doubt that Mr. Trump’s tax and spending plans can generate a 4% growth rate because that growth requires more workers and more productivity. Additionally, studies show that cutting taxes on higher income individuals does not stimulate the economy over the following two year period because the wealthy save the money instead of spending it. Conversely, tax cuts on low and middle-class earners do stimulate the economy because these people spend the extra money.
But economists are not figuring in the Trump-factor (Trump card? – I’m still working on the name). Reality TV and social media star Donald Trump can get people to act how he wants them to act.
If he and Congress have cut taxes on the rich and they are not investing in business at a rate sufficient to generate enough jobs, President Trump will scold, shame and guilt them into making those investments and creating those jobs. If consumer spending is insufficient to keep those businesses producing, President Trump can pull some kind of stunt which will increase demand. It could be anything. He could find an American made product and use it in a way that we Americans will want to copy. For example, he could release a photo of himself, his wife and/or his whole family in a bathtub or hot tub full of CelebriDucks, the only rubber duck made in the U.S, and encourage the rest of us to do the same. Social media will be full of these photos and CelebriDucks will hire more workers.
The Trump-factor could be HUUUUUGE. And as with so many other things over the past couple years, the experts could be wrong, and Mr. Trump could be right. I have gotten conditioned to that possibility.