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I understand that people believe Trump is good for business. And I also understand that people believe Trump is good for the rich. And I also understand that pe

by xigency 10y ago

I understand that people believe Trump is good for business. And I also understand that people believe Trump is good for the rich. And I also understand that people believe Trump is good for the blue-collar worker. But I don't understand how Trump could be a good influence, in the long term, on business and the stock market, when looking at his positions and policy changes. Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The cost of cars will increase. The cost of consumer electronics will increase. The cost of many goods that Americans buy will increase and that will most directly affect the poor. Why Trump isn't good for business - Many American companies source their parts from other countries. Increased tariffs and taxes impact their bottom line. Trump wants American companies to hire American and is willing to enforce it. American workers have a higher minimum wage. This also affects the bottom line. Why Trump isn't good for the rich - If businesses are impacted then investments should decline, but if you've seen The Big Short, then it's possible that we could just have a fraudulent, unpredictable market instead. The huge tax cut should also benefit the rich, so actually, Trump does seem great for the rich. All in all, I'd like to hear what others think and why this sort of thought isn't widely circulated.

soundwave106 10y ago
From what I understand via articles, a lot of the current rally presumes that the talk of trade wars and tariffs is bluster... and that the rise is due to anticipated decreases in regulation and taxes making it easier for businesses. It is still very possible that serious talk about major tariffs and trade wars from Trump might cause a US stockmarket wobble, similar to how the FTSE wobbled after Theresa May confirmed her desires for a "hard Brexit". This IMHO is the main angle of Trump's campaign that is potentially very bad for the business climate. (Of course, there are many factors in a stockmarket's price so who knows. In the long run of course it is best to ignore day-to-day speculation. :) )
steveplace 10y ago
What makes you think "trump" is the stock market? The graves of investors have been dug with political shovels.
- mccoyspace 10y ago
  "The graves of investors have been dug with political shovels." awesome quote! hadn't heard that one before. reminds me of the old 'the market can stay irrational longer than you can stay solvent' line.
rdtsc 10y ago
> All in all, I'd like to hear what others think and why this sort of thought isn't widely circulated. Except a lot of things I've seen predicted about Trump so far (for one a total market crash) haven't come true. I see that maybe it takes longer... But presumably investors can also go through the same analysis you are and we should see a failing trend already. I've heard of a complete market collapse, a disaster, people losing their retirements (heard it on NBC right on the election night). I think a lot of what the market does is unpredictable and attributing this to Trump or other political moves is probably a good way to lose money. Well at least I am not going to and buy gold and bitcoin or reshuffle my investments just because Trump is here.
mjolk 10y ago
I'm sorry that I don't have the time to respond to all of your assertions, but I have done a reasonable amount of research on one of the points and figured I'd add my $0.02. > Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The United States is a net exporter of agricultural goods[1], where a large portion of the expense and challenge is transportation without creating a high amount of spoilage (as many of the products require a maintained temperature range and are only considered fit for human consumption within a (compared to dry goods) tight time-tolerance). On a much smaller scale, if you've been to a farmer's market and you've noted that the goods may come from a number of smaller farms, this (along with normalizing product with slightly variadic crop-yield) is often the "why." As is intuitive, the challenges of transporting (food) product become more complicated over greater distances and time. This very obviously translates to greater expense, which means that the economic choice to sell internationally is only made when less profit can be had if remaining in the domestic market. An exception to this pattern is if a product is unrealistic to turn a profit on if attempting to grow in a non-native climate (e.g. trying to grow bananas in Alaska or coffee).[2] What this means is that the USA can handily supply its own food product, with its lands available for agriculture easily being enough for its population, opposed to high-density regions such as China, which are approaching the point of being dependent on globalization to feed its population or a foray into geopolitics to get more arable land.[3] Put another way, the USA is rich in food goods to the point that, unless Russia decides to make up for a major global deficit[4], the US can demand higher prices for its exports. Further, being the world's dominant market, the USA can demand more favorable prices on its imports, due to the fact that it is more than capable of domestic supply and, if the cost of international trade becomes unwieldy, will instead invest in domestic infrastructure and supply, which adds further challenges for international competition -- "the cost of groceries" will only increase to the point that it becomes logical to switch to domestic supply. Coffee and tropical foods may increase in price, but consumption rates are a marketing problem due to a wealth of substitute goods. [0] https://www.ers.usda.gov/ https://www.ers.usda.gov/ [1] https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58310 https://www.ers.usda.gov/data-products/chart-gallery/gallery... [2] https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58362 https://www.ers.usda.gov/data-products/chart-gallery/gallery... [3] https://www.ncbi.nlm.nih.gov/pubmed/12285198 https://www.ncbi.nlm.nih.gov/pubmed/12285198 [4] https://www.ft.com/content/af66f51e-6515-11e6-8310-ecf0bddad227 https://www.ft.com/content/af66f51e-6515-11e6-8310-ecf0bddad...
davidw 10y ago
For an indicator, look at what Silvio Berlusconi did for Italy: pretty much nothing. The country stagnated while he was in power, mostly looking after his own interests. He accomplished little in a country that really does need some "market friendly" reforms. Also, be wary of the difference between being pro-business and pro-market: https://promarket.org/donald-trumps-economic-policy-pro-business-not-pro-market/ https://promarket.org/donald-trumps-economic-policy-pro-busi...
- deleted 10y ago
  [deleted]
forgetsusername 10y ago
>All in all, I'd like to hear what others think I think that "command and control" and "free market" economies are the extremes of the spectrum, neither optimal, with lots of room in between. Trump has talked a lot, but we don't know where he will actually fall, policy-wise. It's not out of the question he implements economically beneficial policies. We should judge what he does, not what he says.
- PopsiclePete 10y ago
  He did pull the US out of the TPP. And I'm confused why they did not affect the market like I thought it would. Did the US just not hand over all its influence in Asia to China by doing that ??
  - tonyedgecombe 10y ago
    Because the market new it was coming? I don't think it was expected to boost trade that much anyway.
jcfrei 10y ago
I have this - admittedly very condescending - theory that a large part of the middle class is still "financially illiterate". Wages are hardly ever discounted for inflation and thus growing wages (in absolute terms) make most people happy. Even if their purchasing power is declining. As long as there is no sharp increase in prices most people won't complain.
- munificent 10y ago
  People read their pay stubs more often than their grocery bills. You can suck a lot of money out of the middle class by making the latter go up more quickly than the former.
- danans 10y ago
  Money illusion is well a known theory, first proposed in 1928, and backed by empirical evidence from behavioral economics: https://en.wikipedia.org/wiki/Money_illusion https://en.wikipedia.org/wiki/Money_illusion
- Terr_ 10y ago
  I wonder what things would be like if employers were somehow required to adjust pay for inflation by default. I guess they'd just label it a "raise" and take credit. Heck, I'd be happy if Congress would pass legislation to make the minimum-wage automatically adjusted too.
  - billions 10y ago
    How about the government stops printing money instead? It would have a similar effect on buying power as your suggestion.
    - Terr_ 10y ago
      That's a little reductive -- there's always going to be some inflation (or deflation) over time, because there's no instant accurate measure of "how much value exists." So making mistakes in inevitable, and it's safer to err towards inflation than deflation.
smileysteve 10y ago
> But I don't understand how Trump could be a good influence, in the long term, on business and the stock market By reducing the corporate tax rate, he is on a path to ending double taxation.
etangent 10y ago
> Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The cost of cars will increase. The cost of consumer electronics will increase. The cost of many goods that Americans buy will increase and that will most directly affect the poor. You're confusing median-income consumers with median-income producers. The latter will benefit from increased prices if the product is made at home, by them. > Why Trump isn't good for business - Many American companies source their parts from other countries. Increased tariffs and taxes impact their bottom line. Trump wants American companies to hire American and is willing to enforce it. American workers have a higher minimum wage. This also affects the bottom line. On the other hand, there is now less red tape to get domestic projects done. It goes both ways. > Why Trump isn't good for the rich - If businesses are impacted then investments should decline, but if you've seen The Big Short, then it's possible that we could just have a fraudulent, unpredictable market instead. The huge tax cut should also benefit the rich, so actually, Trump does seem great for the rich. Apparently the stock market disagrees about the decline in investment. Fraudulent market is possible under any president.
oculusthrift 10y ago
people have trouble understanding something like, "everything I buy is 10 pct cheaper thanks to globalization" versus "thanks to trumps tarrif's I make 5 pct more". One is direct and noticeable while the other isn't.
- BenoitEssiambre 10y ago
  Except the average price is fixed to rise by 2% a year (Or rather price of paper money relative to average purchase is fixed to fall 2% a year). So using your numbers, globalization would have actually raised wages by 10% compared to what they would have been if we didn't have it and a lot of people's job here would consist of making t-shirts in sweat shops.
jimbokun 10y ago
I think when this came up in the debates, Trump all but admitted this is just an initial negotiating position and he doesn't expect to have to actually follow through with it. So will just have to see if other nations call his bluff, and whether or not he will then back down from implementing the tariffs.

by xigency 10y ago

soundwave106 10y ago

From what I understand via articles, a lot of the current rally presumes that the talk of trade wars and tariffs is bluster... and that the rise is due to anticipated decreases in regulation and taxes making it easier for businesses. It is still very possible that serious talk about major tariffs and trade wars from Trump might cause a US stockmarket wobble, similar to how the FTSE wobbled after Theresa May confirmed her desires for a "hard Brexit". This IMHO is the main angle of Trump's campaign that is potentially very bad for the business climate. (Of course, there are many factors in a stockmarket's price so who knows. In the long run of course it is best to ignore day-to-day speculation. :) )

steveplace 10y ago

What makes you think "trump" is the stock market? The graves of investors have been dug with political shovels.

mccoyspace 10y ago
"The graves of investors have been dug with political shovels." awesome quote! hadn't heard that one before. reminds me of the old 'the market can stay irrational longer than you can stay solvent' line.

rdtsc 10y ago

> All in all, I'd like to hear what others think and why this sort of thought isn't widely circulated. Except a lot of things I've seen predicted about Trump so far (for one a total market crash) haven't come true. I see that maybe it takes longer... But presumably investors can also go through the same analysis you are and we should see a failing trend already. I've heard of a complete market collapse, a disaster, people losing their retirements (heard it on NBC right on the election night). I think a lot of what the market does is unpredictable and attributing this to Trump or other political moves is probably a good way to lose money. Well at least I am not going to and buy gold and bitcoin or reshuffle my investments just because Trump is here.

mjolk 10y ago

I'm sorry that I don't have the time to respond to all of your assertions, but I have done a reasonable amount of research on one of the points and figured I'd add my $0.02. > Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The United States is a net exporter of agricultural goods[1], where a large portion of the expense and challenge is transportation without creating a high amount of spoilage (as many of the products require a maintained temperature range and are only considered fit for human consumption within a (compared to dry goods) tight time-tolerance). On a much smaller scale, if you've been to a farmer's market and you've noted that the goods may come from a number of smaller farms, this (along with normalizing product with slightly variadic crop-yield) is often the "why." As is intuitive, the challenges of transporting (food) product become more complicated over greater distances and time. This very obviously translates to greater expense, which means that the economic choice to sell internationally is only made when less profit can be had if remaining in the domestic market. An exception to this pattern is if a product is unrealistic to turn a profit on if attempting to grow in a non-native climate (e.g. trying to grow bananas in Alaska or coffee).[2] What this means is that the USA can handily supply its own food product, with its lands available for agriculture easily being enough for its population, opposed to high-density regions such as China, which are approaching the point of being dependent on globalization to feed its population or a foray into geopolitics to get more arable land.[3] Put another way, the USA is rich in food goods to the point that, unless Russia decides to make up for a major global deficit[4], the US can demand higher prices for its exports. Further, being the world's dominant market, the USA can demand more favorable prices on its imports, due to the fact that it is more than capable of domestic supply and, if the cost of international trade becomes unwieldy, will instead invest in domestic infrastructure and supply, which adds further challenges for international competition -- "the cost of groceries" will only increase to the point that it becomes logical to switch to domestic supply. Coffee and tropical foods may increase in price, but consumption rates are a marketing problem due to a wealth of substitute goods. [0] https://www.ers.usda.gov/ https://www.ers.usda.gov/ [1] https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58310 https://www.ers.usda.gov/data-products/chart-gallery/gallery... [2] https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=58362 https://www.ers.usda.gov/data-products/chart-gallery/gallery... [3] https://www.ncbi.nlm.nih.gov/pubmed/12285198 https://www.ncbi.nlm.nih.gov/pubmed/12285198 [4] https://www.ft.com/content/af66f51e-6515-11e6-8310-ecf0bddad227 https://www.ft.com/content/af66f51e-6515-11e6-8310-ecf0bddad...

davidw 10y ago

For an indicator, look at what Silvio Berlusconi did for Italy: pretty much nothing. The country stagnated while he was in power, mostly looking after his own interests. He accomplished little in a country that really does need some "market friendly" reforms. Also, be wary of the difference between being pro-business and pro-market: https://promarket.org/donald-trumps-economic-policy-pro-business-not-pro-market/ https://promarket.org/donald-trumps-economic-policy-pro-busi...

deleted 10y ago
[deleted]

forgetsusername 10y ago

>All in all, I'd like to hear what others think I think that "command and control" and "free market" economies are the extremes of the spectrum, neither optimal, with lots of room in between. Trump has talked a lot, but we don't know where he will actually fall, policy-wise. It's not out of the question he implements economically beneficial policies. We should judge what he does, not what he says.

PopsiclePete 10y ago
He did pull the US out of the TPP. And I'm confused why they did not affect the market like I thought it would. Did the US just not hand over all its influence in Asia to China by doing that ??
- tonyedgecombe 10y ago
  Because the market new it was coming? I don't think it was expected to boost trade that much anyway.

jcfrei 10y ago

I have this - admittedly very condescending - theory that a large part of the middle class is still "financially illiterate". Wages are hardly ever discounted for inflation and thus growing wages (in absolute terms) make most people happy. Even if their purchasing power is declining. As long as there is no sharp increase in prices most people won't complain.

munificent 10y ago
People read their pay stubs more often than their grocery bills. You can suck a lot of money out of the middle class by making the latter go up more quickly than the former.
danans 10y ago
Money illusion is well a known theory, first proposed in 1928, and backed by empirical evidence from behavioral economics: https://en.wikipedia.org/wiki/Money_illusion https://en.wikipedia.org/wiki/Money_illusion
Terr_ 10y ago
I wonder what things would be like if employers were somehow required to adjust pay for inflation by default. I guess they'd just label it a "raise" and take credit. Heck, I'd be happy if Congress would pass legislation to make the minimum-wage automatically adjusted too.
- billions 10y ago
  How about the government stops printing money instead? It would have a similar effect on buying power as your suggestion.
  - Terr_ 10y ago
    That's a little reductive -- there's always going to be some inflation (or deflation) over time, because there's no instant accurate measure of "how much value exists." So making mistakes in inevitable, and it's safer to err towards inflation than deflation.

smileysteve 10y ago

> But I don't understand how Trump could be a good influence, in the long term, on business and the stock market By reducing the corporate tax rate, he is on a path to ending double taxation.

etangent 10y ago

> Why Trump isn't good for poor working class America - Assuming there's a large tax on every good coming into the country, then the cost of groceries will increase dramatically. The cost of cars will increase. The cost of consumer electronics will increase. The cost of many goods that Americans buy will increase and that will most directly affect the poor. You're confusing median-income consumers with median-income producers. The latter will benefit from increased prices if the product is made at home, by them. > Why Trump isn't good for business - Many American companies source their parts from other countries. Increased tariffs and taxes impact their bottom line. Trump wants American companies to hire American and is willing to enforce it. American workers have a higher minimum wage. This also affects the bottom line. On the other hand, there is now less red tape to get domestic projects done. It goes both ways. > Why Trump isn't good for the rich - If businesses are impacted then investments should decline, but if you've seen The Big Short, then it's possible that we could just have a fraudulent, unpredictable market instead. The huge tax cut should also benefit the rich, so actually, Trump does seem great for the rich. Apparently the stock market disagrees about the decline in investment. Fraudulent market is possible under any president.

oculusthrift 10y ago

people have trouble understanding something like, "everything I buy is 10 pct cheaper thanks to globalization" versus "thanks to trumps tarrif's I make 5 pct more". One is direct and noticeable while the other isn't.

BenoitEssiambre 10y ago
Except the average price is fixed to rise by 2% a year (Or rather price of paper money relative to average purchase is fixed to fall 2% a year). So using your numbers, globalization would have actually raised wages by 10% compared to what they would have been if we didn't have it and a lot of people's job here would consist of making t-shirts in sweat shops.

jimbokun 10y ago

I think when this came up in the debates, Trump all but admitted this is just an initial negotiating position and he doesn't expect to have to actually follow through with it. So will just have to see if other nations call his bluff, and whether or not he will then back down from implementing the tariffs.