Six Colorado College business and economics professors voiced their doubts and expectations the day after Donald Trump was elected president: Kristina Lybecker, Rich Fullerton, Katrina Miller-Stevens, Jessica Hoel, Bill Craighead, and Jim Parco.
Kristina Lybecker:
In her analysis of the changing economy, Lybecker focused on international trade agreements, healthcare, and job creation.
“The most important changes that are on the horizon are the way in which he is going to treat our international trade agreements,” she said, “So whether or not he’s really serious about renegotiating NAFTA [North American Free Trade Agreement], whether or not he really wants to back out of the Trans-Pacific Partnership… I think that if we significantly change our commitment to free trade, it will be significantly detrimental to the American economy.”
In regards to healthcare, Lybecker said, “Are we just going to throw all of those people back into a situation in which they don’t have health insurance again? That would be significantly damaging to the economy.”
The global economy has already changed since Trump’s election on Tuesday night. “Europe has reacted in a similar way as they did when the Brexit passed,” said Lybecker.
Rich Fullerton:
Fullerton’s initial impressions consisted mostly of questions concerning viability of trade agreements and immigration policy. He said, “I think it entirely depends on what policies he actually implements. Governing as a president is much different than running as a candidate.”
Fullerton said that well over 90 percent of economists believe that free trade agreements are generally economically beneficial to all parties involved, and expressed concerns about Trump’s campaign promise to enact policy to limit them. He also said that most economists would agree that immigration has a positive effect on the economy, and thinks that dramatic immigration restrictions could harm the economy.
He is doubtful about trade and immigration policy, but is also hopeful. He expects that decreased regulation will be positive for the economy. In addition, he is confident in America’s hard working citizens to continue to fuel the economy. “We have incredibly high productivity,” he continued, “Over the long run, economic prosperity depends on the productivity of its citizens and the change in Presidents does not change overnight the productivity of citizens.”
Fullerton is hopeful that these changes will not actually take place. He said, “Chances are his economic advisors may say we need to be more careful and more retrospective about the restrictions we placed on trade. In that case, it may not have that much impact.”
Katrina Miller-Stevens:
Miller-Stevens attributes initial changes in the economy to disappointment and fear because “major leaders that we depend on do not respect his values.” In the long term, she does not think that President Trump will help our standing in the global market.
Despite concern, Miller-Stevens said, “I think that change did need to happen.”
Jessica Hoel:
For the most part, Hoel refrained from comment. However, she did find the following important to note:
“I think one of the single most important things for reducing poverty around the world is a stable, growing U.S. Economy. two percent growth on average is much better than six percent sometimes, minus six percent other times. That kind of uncertainty is hard for the continent of Africa to then develop.”
Though not a direct reflection on what Trump will change, she argued that stabilizing the U.S. economy is the most important contributor to reducing global poverty.
Bill Craighead:
As a connoisseur of macroeconomics, Craighead spoke to specific changes in the market.
“The Mexican Peso has declined,” he said. “Interest rates on U.S. Treasury bonds have risen on the expectation that the U.S. government will be borrowing more, and possibly that inflation will be higher, in the future.” Exchange and interest rates have already started to change. In the next two weeks, he expects stock prices to rise for firms that will benefit from decreased regulation under Trump.
Like other economics professors, Craighead is far less certain about Trump’s economic impacts on the long-term future, largely due to uncertainty about Trump’s policies. He does expect that large tax cuts will stimulate the economy as a whole. He supports Trump’s recent announcement to invest in infrastructure, and thinks Trump has a much higher chance of actually passing an infrastructure bill than Hillary would have. According to Craighead, however, economical stimulants, both tax cuts and increased spending, “will also lead to higher interest rates which can reduce investment.”
Craighead also has concerns about Trump’s intentions to restrict immigration and increase trade barriers. “It will lead to a less efficient use of resources, which means the U.S. will ultimately be slightly poorer than otherwise,” said Craighead.
Jim Parco:
Like Lybecker, Fullerton and Craighead, Parco questioned the validity of Trump’s campaign: “Candidates behave differently than elected officials… We haven’t seen a lot of details from the Trump campaign.”
In terms of the how the economy will change, Parco simply said, “I don’t think it’s anybody’s business to have an opinion.” Until he sees proposed policies, he said, there is too much uncertainty.
In his first 100 days, Donald Trump has pledged to renegotiate the North American Free Trade Agreement, withdraw from the Trans-Pacific Partnership, repeal Obamacare, and drastically restrict immigration–all of which CC economics professors argue will be detrimental to the U.S. economy. Trump’s decrease in regulation will likely benefit the economy. Though Trump’s investment in infrastructure and tax cuts may temporarily stimulate the economy, they are also expected to increase interest rates, therefore reducing investment.