Trump will slowly and steadily implement a shock-and-awe program in his first 100 days. He is not one for scaling or holding back the energy or enthusiasm. And right now he has the mandate and the manner, and the Republican Party enthused with his grace. It won’t last of course, this honey-moon period. So what should he do in his first 100 days to start the change to make America Great again? Here are some suggested policies that I think Trump will action.
An early direction with healthcare will help no end economically as well as politically, neutering democratic complaints. He will announce that he still wants to repeal Obamacare but the facts are that cannot do so. He will instead defund some core tenets and strike down some implemented aspects. He will keep coverage that prevented pre-existing considerations for one. But this adds to costs, so this does not address the two main issues with healthcare: healthcare costs (which Obamacare didn’t touch) and those who cannot afford coverage.
Best bet would be to shut down the exchanges. They are a joke; they don’t work like a market and they just pad Federal jobs. Trump will shut them down and close down large swathes of the government agency in charge of them. He will require insurance firms to accommodate pre-existing conditions. He will remove state-level rules that prevent cross state competition. He will announce a new funding package to insure the 29m people who had no insurance before Obamacare. It will consist of a means tested credit system where the ‘poor’ are given credits to spend on healthcare. Trump will announce an initiative to work with the industry to narrow down the focus on meaningful use metrics focused on health not healthcare actions.
The healthcare industry is being mandated by the current government to use technology. This will (and needs) to change. Technology will not be mandated but will be applied using business drivers for improved service level and cost efficiency.
- Premiums will fall
- Costs to cover those uninsured will be more clearly identified and therefore more easily earmarked
- Later, efforts to reduce costs will emerge due to cultural changes in the healthcare service as a result of the productivity goals related to health not activity
Finance: Banking and Financial Services
Dodd-Frank will mostly be repealed. It will be replaced with a smaller ‘systemic concern’ package that will include the introduction of Glass-Steagal varient.
Large swathes of the regulation industry will be shut down. Business costs will fall. Business complexity will start to fall. Start-ups per year will grow in number. Unemployment, the number that includes those disaffected and no longer looking for work will fall from 9% to 4% in 12 months.
Banks will start to make loans again. Capital investment will start to roll. Interest rates will rise as will inflation. Normal economic conditions will start to emerge in 12 months. In 18 months, as ‘normal’ economic conditions materialize, productivity will start to show signs of logical and causal improvement.
The Fed will raise rates December 2016 and every quarter for two years until rates stabilize around 6-8%. Inflation will recover to 2-4% in 18 months; signs of commodity price rises are just emerging now. The stock market will not sink but will grow slowly and steadily through the transition.
The only wrinkle here for me is the massive balance sheet the Federal Reserve has that it needs to dispose of. This will have a negative impact on the stock market.
Short term reduction across the board for broabased income and corporate tax, and introduction of a national sales tax, and an 18 month tax-holiday (nominal tax rate) for corporate repatriation of foreign profit stashes. Numerous removals of recent regulations to prevent reverse take-overs; it’s no longer needed with competitive corporate tax rates.
Long term proposals will be developed to revamp the tax system using Paul Ryan’s original plan of three years ago. They will be passed into law in 2018. By middle of 2018 pundits will be talking of a new renaissance in American business.
Income inequality will remain spread until early 2018 when it will seen to be declining. The rich will get richer (assuming the selling of the Fed balance sheet does not sink the stock market) but the poorer will get less poor more quickly.
Trade and Industry
Large chunks of federal government will be shut down and a new commercial and trade development body will be formed, structured and led by industry experts. New trade deals will sprout up all over the place; not with tariffs automatically but only as part of a negotiating tactic. Trump will be heralded the friend to global trade by the Economist in 2018.
The US and UK will fast track a new Western Union Alliance with the Nordics in late 2017.
- Infrastructure – massive broad basses plan to balance private and public investment on toll roads, Key Stone pipeline, schools and more
- R&D and innovation- significant and notable tax incentive to increase primary investment
- Small business growth – removal of entire swathes of small business regulation and shutting down of several agents focused on that work
- Public backed mortgages: floatations of Fanny and Freddie and transfer to private sector; establishment of new body to support federal insurance protection for first-time buyers and loans for under $150k only. New funds to encourage states to build new public sector housing.
- Tightening of regulations to prevent mortgages being offered to those without jobs and ability to pay. This will result in increased home ownership of the less well off (as prices will stabilize, and job and wage growth will take off)
- Education: Federal control will be lessened (more about smaller governance) and moved to the states to develop. Any new innovations that deem to work will be elevated to Federal levels as optional programs.
Trump is a practical business man. He knows that there are smart foreigners that American companies want to hire. He also recognizes that some jobs will only be satisfied with low paid workers.
Trump will revamp imigration and visa policies. He will build a wall, but it might not be a 15 foot brick wall. He will seek to deport illegal immigrants running around the US today. He will accept some suggestions to accommodate a path to citizenship if there are children born in the US and such migrants are paying their taxes.
My main concern is with foreign policy. I reject the suggestion from defeated democrats and left leaning international ‘regretibles’ that Trump is an isolationist or war monger. I reject such beliefs since I accept that much of what Trump said (and Clinton for that matter) during the election is rhetoric, not policy. I don’t think Trump’s cabinet or Trump himself will destabilize the world. It is already unstable. I think Trump will be pragmatic.
- Yes, NATO needs to step up and pay its own way
- UK-US relations are primed for a new era of close cooperation. Trump will likely accept the UK as America’s closest, trustworthy aide. Even Prime Minster May will be thought of as a better choice than elitist Cameron
- Trump will align with NATO (assuming it pays up) and will not support Russia when it conflicts with NATO goals
For me, the main risk is with China. And for the simple reason that there is no single solution to China. I don’t even know if there is a ‘solution’ since a solution assumes a problem. China is not a problem per se; the growing country creates problems and headaches for others but such things cannot be ‘removed’. It’s more a case for how do we live with an ascendant China? Neither Democrat or Republican offered any such ideas. This reminds me of Britain in the 1950’s and its ‘managed decline’. It was not so much a policy as a series of mistakes and in many cases, indecisions. The US needs to determine how it will handle this next phase of development. At least the country can soon approach this from a position of strength and growth.