It’s only natural that expectations about the start of Donald Trump’s presidency were high. US election campaigns have become so protracted that the electorate is waiting with baited breath by the time a new President takes the oath of allegiance. And Mr Trump was keen to promise that he would hit the ground running. If President Obama’s catchphrase was “Yes we can”, Mr Trump’s was more of a “Yes, we will”.
Fast-forward 100 days, and it’s fair to say that we’ve seen relatively little meaningful Presidential action so far. Building the notorious Mexican wall did not start on day one of his presidency, as was pledged. Healthcare reform ran into trouble early on before gaining some momentum last week. A number of his executive orders have misfired. Mr Trump has taken to the task of President with enthusiasm, but perhaps not with the aplomb of a seasoned politician familiar with the nuance of getting things done on Capitol Hill. To this extent, he has generated more heat than light.
From an economic perspective, some of this inaction is a good thing. The administration has stepped away from some of the campaign’s most emotive protectionist rhetoric. China has not been labelled a currency manipulator. In fact, Mr Trump and President Xi Jinping have rather warmed to each other. The US has not torn up the North Atlantic Free Trade Agreement (NAFTA). Instead, Mr Trump has committed to talks with Canada and Mexico to update the deal.
The president’s attempts to curb immigration have also been largely thwarted so far. Immigrants have always been a cornerstone of the US labour market, so a more nuanced approach to the issue should be a positive for the economy’s long-term health.
Mr Trump’s economic priority should be all about improving the supply-side of the economy, rather than stimulating demand.
Putting positive inaction to one side, is there more that Mr Trump should have done in his first 100 days? The US recovery was already motoring along fairly nicely before the President took office. The labour market is close to full employment and capacity pressures are building. So Mr Trump’s economic priority should be all about improving the supply-side of the economy, rather than stimulating demand. That way, the US can grow in a non-inflationary way without forcing the central bank to raise interest rates and choke off growth.
As for what these supply-side priorities might involve, tax reform and infrastructure spending are two obvious examples. Mr Trump spoke passionately about both during the campaign, but it’s fair to say that progress in the first 100 days has been disappointing. The President’s tax plans so far amount to a side of A4 paper, with big gaps on detail and funding. Likewise with infrastructure.
To be fair to Mr Trump, judging a president by his first 100 days is an arbitrary, pointless metric when it’s a 1000-day job. The practice first began with Franklin D. Roosevelt (FDR), who used his 100-day anniversary to enact reforms ranging from a business stimulus plan to new protections for those at risk of losing homes and farms.
But the comparison doesn’t make much sense. No president since FDR has achieved anything similar, so he’s more of an anomaly than a benchmark. The Great Depression defined the start of his presidency and this singular issued helped focus minds, and Congress, to support his policies. Other Presidents started strongly, like Jimmy Carter, but struggled later on.
As for President Trump, if he wants to mark his first 100 days in a meaningful way, he could do worse than flesh out his infrastructure plans. The US is in dire need of better transport, building and utilities and infrastructure. These kinds of supply-side reforms would help set the US economy up for the decades to come. It is over this much longer term horizon that we’ll be able to judge the worth of Donald Trump. More haste and less speed, Mr President.
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