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Why President Trump Will Not Revive the US Economy

By: Iván Carrino - Nov 11, 2016, 7:37 am
Los Estados Unidos siempre se caracterizaron por tener una economía dinámica, empresarial e innovadora, lo que le permitió alcanzar uno de los niveles más altos de vida en el mundo (Flickr).
The United States has always been characterized by its dynamic, entrepreneurial,and innovative economy. Trump won’t bring it back to that. (Flickr).

After months of a grueling and hostile campaign, Republican candidate Donald Trump has finally been elected President of the United States.

Clearly, this result is a direct criticism of the political establishment, and proves the consolidation of populism throughout the First World.

Now the question is whether this eccentric business tycoon will be capable of reviving the US economy.

The United States has always been characterized by its dynamic, entrepreneurial and innovative economy that allowed the country to reach one of the higher standards of living in the world. However, excess spending, public debt and too many regulations have reduced its overall performance.

According to a study conducted by the Mercatus Center of the George Mason University, Barack Obama had imposed 105,602 new regulations on businesses through 2014, becoming the most regulatory president of the last 40 years.

In response, Trump said he will deregulate the economy and lower taxes — proposals that please many defenders of the market economy. However, Trump’s good ideas end there.

One of his most pretentious proposals is the commercial war on imports, along with his threat to abandon the North American Free Trade Agreement.

This proposal is a contradiction at best. He promises to reduce taxes and raise customs tariffs (which are also taxes), at the same time. Perhaps the worst thing about this measure will be the negative impact it will have on the economy.

Without as many cheap imports, US consumers are going to be impoverished. Producers in North America will begin to manufacture things that were previously imported, distorting the country’s production and reducing efficiency. Fewer imports implies less supplies at a low cost, which will hinder the production of companies.

More protectionism means more poverty, and less growth. This is not the way to “make America great again.”

The New Yorker asserted his government will carry out a gigantic infrastructure plan that will “rebuild freeways, bridges, tunnels, airports, schools and hospitals,” and that it “will put millions of people to work on that reconstruction.”

In other words, pure and hard Keynesianism.

The government spends and creates jobs to revive the economy. However, the question is how will they pay for all that expense if at the same time they are promising to cut taxes. The answer is simple: more public debt.

But debt is, as this article has already established, one of the reasons US has experienced a decline in economic growth. Explain again how borrowing more will make the US grow?

It is good news that the US has said no to the traditional political establishment, and that citizens are punishing the Democrats for their poor economic policies and corruption scandals. But Trump isn’t going to help either.

At best, this experience will serve to prove that populism is not the answer. It is not the plans of megalomaniac politicians that help the economy, but the entrepreneurs when allowed to produce freely.

Iván Carrino Iván Carrino

Iván Carrino holds a Master's Degree in Economics and a Bachelor's Degree in Business Administration. An economics professor at Belgrano University and at ESEADE in Buenos Aires, he also works as a consultant at Inversor Global. Follow him: @ivancarrino.

Trump’s Victory Should Have Been Obvious to Anyone Paying Attention

By: Priscila Guinovart - @PrisUY - Nov 10, 2016, 3:00 pm
Trump's victory is due, in large part, to the tremendous failure in the campaign of his democratic counterpart (Flickr).

EspañolDonald Trump won and now most media outlets have dismissed the victory as if a mysterious and invisible hand acted with divine intervention. Read more: Peña Nieto to Trump: Mexico and the US Must Continue Alliance The truth is that both the public and the press seem to have been absent in a campaign that was lost by Hillary Clinton and announced as such months ago. The clues were always there in plain sight, but for cheap progressive fanaticism or, in this particular case, simple hatred, nobody wanted to admit it. Donald Trump is the winner of a race that Clinton lost, and this is something that must be understood in its entirety: The victory of the "xenophobic sexist" is the result of the resounding failure of a manipulator with few scruples. Clinton was grasping at straws by the end, needing help not from one, but from two Obamas, and from any actor who has enjoyed some popularity in his life. Hillary is not Michelle and they both know it. And Barack, with all his faults, is not Hillary. She's not even Bill. Beyond her contradictions, beyond being investigated by the FBI, beyond the complicity of half of Wall Street, beyond Libya, beyond e-mails, Hillary Rodham Clinton has the charisma of a rusted spoon, and she knows it. Read more: Uruguay Officials Say they "Respect" Trump Victory, Question Pollsters She dedicated a good percentage of tweets and Facebook posts to ranting against Trump, to the point of becoming everything that she claimed to dislike about the Republican candidate (aggressiveness and violence) and made little reference to what she intended to do in the event of winning office. Robert de Niro appeared at some point on behalf of Clinton as part of her #VoteYourFuture campaign, telling the whole world how much he would like to hit Trump in the face. Many found it fun and ingenious, few were the ones who realized that the mythical actor sank to the level of the Republicans. Not many were scandalized when the Democrat insulted what we now know is the majority of the American people, calling Trump's voters "deplorable." And so, with all of the above, the media and polls still do not understand why Hillary Clinton is not celebrating a victory. Explanations border on the absurd. Time writer Charlotte Alter said on Twitter that people shouldn't forget how much people hate women ( "never forget: people hate women)." But sexism was one of many possible explanations for a defeat, and the easiest, the most at hand. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); }); Others have said Trump won by appealing to a society full of hatred and resentment, and this might actually be true: he won by understanding the anger of a people tired of political correctness in a society that does not allow anyone to think differently — in which inclusion is an obligation. Trump's victory is the defeat of the establishment, the status quo, cronyism with big banks. Political analysts failed to interpret the average American's craving and are now amid a collective hysteria that isn't cooperating at a time when unity is essential for a country. It is their surprise that surprises.

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