Donald Trump is the quintessential American success story. Bold, confident and well-diversified, Trump’s core competencies are often overlooked. On the surface, people see a wealthy real estate mogul and gaming operator, yet, beneath this, runs a keen sense of market opportunity identification and team-building acumen. His distinct ability to discern and combine strategic opportunities has served him well over the years. This is the heart of Trumpinomics: creating value from seemingly disparate opportunities.
Trump is well-versed in picking the right ideas to focus on while surrounding himself with a strong team of brilliant minds aptly positioned to bring those ideas to fruition. Consistently applying this winning method over the course of his career, he has created massive value for his Company. The question now is how his presidency might translate into massive value for our country? Here are key points to consider:
1) Combining Tax Reform with Infrastructure Investment – Trump knows a few things about building and infrastructure, and he is incensed by the state of our slow rails and roads. However, the need for Infrastructure spending (estimated at over $1 trillion) is too much for our national budget, therefore he will likely seek a public – private solution wherein important infrastructure assets will be privatized. This will lead to better roads and bridges which will likely be funded, at least in part, through a deal to allow companies to repatriate foreign assets at lower tax rates.
2) Combining Tax Reform with a Targeted Industrial Policy – Trump knows that government is not good at picking industrial winners and losers. He is inclined to create incentives for companies in the form of tax credits and accelerated depreciation for those that invest in creating US manufacturing jobs. Outcome? Look for new pro-business investment incentives, especially in the Industrial heartland. Wilbur Ross as Commerce Secretary is a great sign of things to come.
3) Combining Energy Policy and Infrastructure Spending – Enter the great fracking debate. Fracking has driven tremendous growth, but the transport system has not kept up. Our ports, pipelines and rails have not expanded to fully and safely capitalize on this domestic surplus of home grown energy. By combining energy and infrastructure policy, the price tag and projected risk of a project to the environment can be mitigated. Federally funded public works, if targeted in Energy and Transport, can and bring economic growth to industrial coastal cities in desperate need of a shot in the arm.
4) Combining Healthcare Regulatory Relief with Market Based Options – the Reagan economy started rolling in response to massive deregulation across many sectors of the economy. Telecom, Trucking, Financial Services all got a turbo-boost from deregulation. Today, the healthcare market is in need of an overhaul from the struggles caused by the Affordable Care Act. By offering market base- private solutions, such as flexible spending accounts and insurance availability across state lines, the market will become more efficient and ultimately more affordable. Taming the health insurance market could create explosive growth, given its omni-present influence.
Comments or questions? How do you think Trumpinomics will effect the U.S. economy? I’d like to hear your thoughts. Please email me at [email protected].