The Coming Trump Slump [View all]
Trump's tumultuous presidency is damaging the U.S. economy.
By Benjamin P. Edwards and Sarah C. Haan | Sept. 22, 2017, at 6:00 a.m.
Despite President Donald Trump's asserted focus on job growth and the business environment, his administration is damaging the fundamentals undergirding U.S. economic growth. A slowdown seems likely because Trump's fractious months in office have already degraded the nation's business and investment environment.
Contrary to Trump's belief, controversy-generating reality television strategies do not generate good governance and growth. While the president promised Guam's governor that tourism would go up "tenfold" because of media attention from his Twitter tirades about North Korea, the numbers tell a different tale. The war of words cost Guam's tourism industry $9.5 million last month. It appears vacationers would prefer to avoid possibly atomic attractions.
Sustained economic growth and investment require stability, predictability, public integrity and a strong commitment to the rule of law. These fundamentals matter when investors examine opportunities. They must consider political risk – the odds that a changing political climate introduces new risks without additional returns. Without predictability and reliable law, investors and business leaders may hesitate to risk capital here. Many investment decisions require parties to trust that a "so-called judge," as Trump has said, will apply settled law in predictable ways. Stable immigration laws also enable businesses to recruit and compete for global talent. Shocks create dangers and force investors and businesses to slow down to assess risk. As dangers escalate, investment shifts overseas to more predictable jurisdictions.
Consider the investments imperilled by the Trump administration's announcement that it would end the Deferred Action for Childhood Arrival program. The decision threatens to waste America's investment in educating hundreds of thousands of Dreamers. It also hurts American citizens doing business with them. Will deported Dreamers repay car loans, student loans, and credit cards if displaced to foreign nations? Their employers' investments in training may also be squandered. The decision may even drive up insurance premiums for Americans that do not interact directly with Dreamers by removing their insurance premiums from the pool.
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https://www.usnews.com/opinion/articles/2017-09-22/donald-trumps-presidency-is-hurting-american-business-and-economic-growth
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