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Trump Will Have A Hard Time Making The Economy "Greater"

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Trump Will Have A Hard Time Making The Economy "Greater"

Post by Deleted User 8570 » Mon Jan 23, 2017 1:12 pm

Challenges ahead:
WASHINGTON (AP) — President Donald Trump's economic plans are nothing if not ambitious: Annual growth of 4 percent — or more. A diminished trade gap. The creation of 25 million jobs over 10 years, including the return of good-paying factory positions.

It all adds up to an immense challenge, one that Trump aims to achieve mostly by cutting taxes, loosening regulations, boosting infrastructure spending and renegotiating or withdrawing from trade deals. At the top of his agenda: Pulling out of the 12-nation Pacific trade agreement and rewriting the North American Free Trade Agreement to better serve the United States.

Yet to come anywhere near his goals, economists say Trump would have to surmount at least a handful of major hurdles that have long defied solutions.

He may yet succeed. But he faces deep-rooted obstacles that have bedeviled presidents from both parties for years.

Among the challenges are these:

___

A SHIFT TOWARD AUTOMATION

Trump's goal of vastly expanding manufacturing would require at least the partial reversal of a decades-long trend toward a service-oriented economy and away from factory work. Former President Barack Obama sought to add 1 million manufacturing jobs in his second term but came up two-thirds short.

Even if Trump could return factory production to its heyday by toughening trade deals and threatening to slap tariffs on America's trading partners, a surge of new jobs wouldn't necessarily follow. The increased use of robots and automation has allowed factories to make more goods with fewer workers. Research shows that automation has been a bigger factor than trade in the loss of U.S. factory jobs.

The trend is spreading outside factory gates. Uber is experimenting with self-driving cars. Restaurant chains like Eatsa can now serve meals through an automated order-and-payment system. No cashiers or servers are needed.

"You cannot just slap tariffs on and hope that will bring back middle class jobs," says Daron Acemoglu, an economist at MIT. "The jobs that went to China would come back to robots rather than people."

___

A SHORTAGE OF SKILLED WORKERS

Jobs that can't be automated typically require education beyond high school. Yet not everyone can or wants to attend college. Many analysts say the economy needs better and more widely available post-high school education and training, whether through community colleges, vocational schools or boot camps offering technology training.

Such a boot camp is how Sharnie Ivery managed to move beyond the retail and sales jobs he'd held right after high school. In 2013, Ivery began a six-month computer coding boot camp at Flatiron School in New York through which he obtained internships. Last year, he began working as a software developer at Spotify, the music streaming service. "There weren't many opportunities for a career in technology" without training and experience, Ivery, 24, said.

Last year, the Obama administration opened some financial aid programs to Flatiron and other boot camps. But such efforts remain in an experimental phase, and any widespread successes from those programs are likely years away.

A lack of technological skills isn't an issue only for the tech industry itself. Modern manufacturing work increasingly requires high-tech know-how requiring some education or training beyond high school. Since the economic recovery began in 2009, only 12 percent of manufacturing jobs have gone to workers with no more than a high school degree, according to research by Georgetown University's Center for Education and the Workforce.

___

SLUGGISH WORKER PRODUCTIVITY

In the past decade, the growth of American workers' productivity — the amount they produce per hour worked — has slumped to roughly half its long-term average.

That slowdown has imposed a dead weight on the economy. When employees become less efficient, it slows economic growth, and companies can't raise pay without boosting prices. A faster expansion needs a combination of more people working and more efficient workers.

Trump's proposals might help somewhat. He favors expanded tax breaks for companies that invest in new machinery and equipment, which typically make workers more productive. And he's vowed to build more roads, tunnels and other infrastructure, which can save on shipping and commuting costs.

Douglas Holtz-Eakin, president of the conservative American Action Forum, says Trump's push to loosen regulations might also lead to more startup companies, which could prod established businesses to become more efficient.

Still, many economists, like Robert Gordon of Northwestern University, argue that today's innovations — in mobile communications and biotechnology, for example — aren't transformative enough to fuel the explosive productivity growth that resulted from inventions like the automobile, telephone and computer.

___

INCOME INEQUALITY

Economic growth since the recession ended has been both slow and uneven: It's benefited wealthier Americans far more than low- and middle-income households. Trump's nominee for Treasury secretary, Steven Mnuchin, noted this concern at a confirmation hearing last week: "The average American worker has gotten nowhere," he said.

The tepid gains for low- and middle-income families have slowed the economy because those groups typically spend more of their income than do affluent households, and consumer spending is the economy's primary fuel. Against that backdrop, Trump's goal of 4 percent annual economic growth — a formidable one under any circumstances — might be next to impossible.

Mnuchin said the administration's proposals to cut taxes for individuals and businesses would shore up families' finances and encourage companies to hire more. Yet America's wealth gap has widened even as previous presidents have cut individual taxes.

And there's no way to know how companies would use their tax cuts. Many large companies return profits to shareholders by boosting dividend payments and share buybacks, rather than by expanding investment and raising employee pay.

___

A SLOW-GROWING WORKFORCE

Trump has pledged to add 25 million jobs over the next decade. But with fewer people looking for work now than just a few years ago, it's unclear where all those extra workers would come from.

The president's pledge will run up against a long-standing trend: A decline in the proportion of Americans either working or seeking work. That's largely a reflection of an aging population. Roughly 10,000 baby boomers turn 65 every day, and many retire. The Congressional Budget Office forecasts that the proportion of Americans working or looking for will keep dropping to 61.5 percent by the end of 2020.

Mark Lashinske of Tempe, Arizona-based Modern Industries, which makes machine tools, says he's struggling to fill 14 machinists' positions. He blames the steady loss of manufacturing jobs since 1980 for discouraging an entire generation from factory work. His company is expanding its efforts to find younger job applicants.

The company has established an internship program and is working with a nonprofit group to encourage disadvantaged high school students to consider manufacturing careers.

"We've been looking for quite a while," he says. "We have such a shortage."

Most economists argue that encouraging more legal immigration could help counter an otherwise slow-growing workforce and might help accelerate economic growth. Yet Trump campaigned on tightening immigration restrictions.

"In the absence of immigration, we shrink the size of our population and our economy and our global influence," Holtz-Eakin says.

___

STRONG DOLLAR

Through renegotiating treaties like NAFTA and pushing companies to keep more jobs at home, Trump hopes to reduce — or even eliminate — the trade deficit, a measure of how much more America imports than exports. The U.S. has run trade deficits since 1975.

Yet if Trump's policies accelerate growth, the Federal Reserve would be more likely to raise the short-term interest rate it controls to keep inflation in check. Faster growth and higher rates, in turn, would attract more investors to the dollar, raising its value compared with other currencies.

The catch? A stronger dollar makes U.S. exports costlier and imports cheaper — a recipe for an even wider trade deficit and a headwind for growth.



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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Plate Cap » Fri Jan 27, 2017 9:19 am

Hmmm......

I'm confused.

This post seems almost celebratory......

Am I reading here that to justify the dislike for Donald Trump, failure is wished / expected on all these matters in order to justify said dislike?

Since the article refers to longstanding problems, are we to draw that somehow the OTHER candidate would have magically solved them?

Our country is in a sorry, sorry state when people predict, celebrate, and seem to wish for national failure in order to justify their political preferences.


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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Calvert DeForest » Fri Jan 27, 2017 9:49 am

I don't think anyone is celebrating the potential failure of the president's policies. I'm certainly not. I would love nothing more than to be pleasantly surprised for the sake of our nation. Doesn't mean I'm not skeptical though.

Trade reform is needed. I agree with President Trump on that. What concerns me, as I've stated previously, is the idea of slamming on the brakes at 90 MPH. An all-out trade war would trigger hyper-inflation, which could be devastating to the economy without gainful employment to counter it. Manufacturing jobs are not going to reappear overnight, but a trade war could be triggered quickly if we're not careful.

My take is that we as a society have been spoiled with the allure of "low, low prices....always". Immediate tariffs without forethought could adversely affect imports and exports, and have the potential to end that party in a hurry. I certainly wouldn't celebrate paying $5/gallon for milk because farmers have to make up for goods they can no longer easily export to other countries. I'm not saying it would necessarily happen. To be honest, nobody knows what will happen for sure. I am, however, concerned about the speed at which Mr. Trump wants to implement trade reforms.

Like it or not, we depend on our global trade partners. Probably more than we should, but it's gonna take time and careful negotiation to talk these countries down to a fairer trade standard. Going into trade negotiations with a baseball bat rather than an olive branch is not a good idea IMO.


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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Deleted User 8570 » Fri Jan 27, 2017 9:55 am

Plate Cap wrote:Hmmm......

I'm confused.

This post seems almost celebratory......

Am I reading here that to justify the dislike for Donald Trump, failure is wished / expected on all these matters in order to justify said dislike?

Since the article refers to longstanding problems, are we to draw that somehow the OTHER candidate would have magically solved them?

Our country is in a sorry, sorry state when people predict, celebrate, and seem to wish for national failure in order to justify their political preferences.
Nobody is wishing for anything... merely stating the reality that in the economic and aging demographic state we find ourselves in it's going to be extremely difficult to do what he promised. Nobody is taking sides here. Reality is not on his side economically.

What you find celebratory here is beyond me... there isn't even any opinion... it's pretty straight.



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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Bryce » Fri Jan 27, 2017 11:49 am

For the full year, the U.S. grew just 1.6%, compared with its 2.6% clip in 2015. It was the weakest performance since 2011. The last time the U.S. topped 3% growth — the historical average is 3.3% — was in 2005.
Frankly, I think 4% is ambitious. I think people will be thrilled if a 3.3 percent growth is reached and maintained.


Cain killed Abel with a rock. God blamed Cain, NOT the rock.

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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Deleted User 8570 » Fri Jan 27, 2017 11:51 am

Bryce wrote:
For the full year, the U.S. grew just 1.6%, compared with its 2.6% clip in 2015. It was the weakest performance since 2011. The last time the U.S. topped 3% growth — the historical average is 3.3% — was in 2005.
Frankly, I think 4% is ambitious. I think people will be thrilled if a 3.3 percent growth is reached and maintained.
The headwinds are quite strong... I would be THRILLED with 4% but I'll take 3.3% too... it's just hard right now... we should all be trying to make automated factories illegal but nobody focuses on that little detail... the small number of outsourced jobs is sexier...



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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Calvert DeForest » Fri Jan 27, 2017 12:00 pm

One thing that isn't being addressed and I don't expect to be addressed....the national debt.

JFK was the last president to make an effective attempt to limit government spending across the board through the issuance of silver notes. Since then, it's been all about who wants to spend money where and for what.

What really gets me is that the Democrats and Republicans continue to justify deficit spending and argue about who expands the debt more than who. They play with the numbers and pass off reductions in spending growth as actual reductions in spending itself (two different things). Meanwhile, we just keep selling the farm to whoever wants to loan us a few bucks, and now we're struggling just to keep up on the interest payments.

Economics 101: If I make interest-only payments on my credit card, I'm just renting whatever I used it to buy. The bank is the real owner. If I can no longer to pay even that, the bank is gonna shut down my card sooner or later and want all their principal back. They're unlikely to say well, you can spend a little more to keep up with the ROI....as long as you don't spend as much as you did last year.

When are we gonna deal with this, and are we beyond the point where we even can?


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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Bryce » Fri Jan 27, 2017 12:06 pm

Calvert DeForest wrote: Economics 101: If I make interest-only payments on my credit card, I'm just renting whatever I used it to buy. The bank is the real owner. If I can no longer to pay even that, the bank is gonna shut down my card sooner or later and want all their principal back.
That concept, along with little or no equity (down payment), is pretty much what caused the mortgage meltdown a few years back.

The problems we are creating that will fall to our children and grandchildren to deal with is nothing short of criminal.


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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by audiophile » Fri Jan 27, 2017 1:28 pm

NS8401 wrote:
Bryce wrote:
For the full year, the U.S. grew just 1.6%, compared with its 2.6% clip in 2015. It was the weakest performance since 2011. The last time the U.S. topped 3% growth — the historical average is 3.3% — was in 2005.
Frankly, I think 4% is ambitious. I think people will be thrilled if a 3.3 percent growth is reached and maintained.
The headwinds are quite strong... I would be THRILLED with 4% but I'll take 3.3% too... it's just hard right now... we should all be trying to make automated factories illegal but nobody focuses on that little detail... the small number of outsourced jobs is sexier...
Automated plants is what should be done to combat cheap Chinese labor. These plants are very expensive to build, but the companies that makes the machines and those that build the facility employs lots people.

I mean you could return to mowing your lawn with an old fashioned push-mower and only paying with cash too :blink


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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Plate Cap » Fri Jan 27, 2017 2:19 pm

Bryce wrote:
That concept, along with little or no equity (down payment), is pretty much what caused the mortgage meltdown a few years back.
Maybe......kinda......sorta.....

But what caused the mortgage meltdown, in actuality, is the timeline below.

It's not on CNN or the major media, because it's not attractive to the liberal cause, but it is what it was:




1977: Jimmy Carter (D) signs the Community Reinvestment Act, guaranteeing home loans to low-income families.

1999: Bill Clinton (D) puts the CRA on steroids, pushing Fannie Mae and Freddie Mac to increase the number of sub-prime loans.

2003: The Bush White House calls Fannie and Freddie "a systemic risk." The Bush administration pushes Congress to enact new regulations.

2003: Barney Frank (D-CT) says F&F are "not in a crisis." He bashes Republicans for crying wolf and calls F&F "financially sound." Democrats block the Republican-sponsored regulation legislation.

2005: Federal Reserve Chairman Alan Greenspan voices a warning over F&F accounting. "We are placing the total financial system of the future at a substantial risk.

2005: Sen. Charles Schumer, (D-NY) says ". . .I think Fannie and Freddie over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world . . .if you look over the last 20 or whatever years, they've done a very, very good job."

2006: Sen. John McCain (R-AZ) again calls for reform. "For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac . . . and the sheer magnitude of these companies and the role they play in the marketplace . . . the GSE's (government sponsored enterprises) need to be reformed without delay."

2006: Democrats again block reform legislation.

2008: housing market collapses; Democrats BLAME the Republicans.


The box that many broadcasters won’t look outside of was made in 1969 and hasn’t changed significantly since.

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Re: Trump Will Have A Hard Time Making The Economy "Greater"

Post by Deleted User 8570 » Fri Jan 27, 2017 2:23 pm

Plate Cap wrote:
Bryce wrote:
That concept, along with little or no equity (down payment), is pretty much what caused the mortgage meltdown a few years back.
Maybe......kinda......sorta.....

But what caused the mortgage meltdown, in actuality, is the timeline below.

It's not on CNN or the major media, because it's not attractive to the liberal cause, but it is what it was:




1977: Jimmy Carter (D) signs the Community Reinvestment Act, guaranteeing home loans to low-income families.

1999: Bill Clinton (D) puts the CRA on steroids, pushing Fannie Mae and Freddie Mac to increase the number of sub-prime loans.

2003: The Bush White House calls Fannie and Freddie "a systemic risk." The Bush administration pushes Congress to enact new regulations.

2003: Barney Frank (D-CT) says F&F are "not in a crisis." He bashes Republicans for crying wolf and calls F&F "financially sound." Democrats block the Republican-sponsored regulation legislation.

2005: Federal Reserve Chairman Alan Greenspan voices a warning over F&F accounting. "We are placing the total financial system of the future at a substantial risk.

2005: Sen. Charles Schumer, (D-NY) says ". . .I think Fannie and Freddie over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world . . .if you look over the last 20 or whatever years, they've done a very, very good job."

2006: Sen. John McCain (R-AZ) again calls for reform. "For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac . . . and the sheer magnitude of these companies and the role they play in the marketplace . . . the GSE's (government sponsored enterprises) need to be reformed without delay."

2006: Democrats again block reform legislation.

2008: housing market collapses; Democrats BLAME the Republicans.
Both parties caused it... don't be a revisionist... understand that the Republicans had both Chambers from 1994-2006 and all the marbles from 2001-2006... there was deregulation that played a major factor and it was bipartisan... killed Glass-Stegal for example... Republicans pushed it, Clinton signed it...



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