Following Donald Trump’s election to become the 45th President of the United States, there was no shortage of thoughts on what impact the businessman and reality TV star will have on the world for the next four years.
Republican Trump, 70, who has pledge to “Make America Great Again,” defeated Hillary Clinton, 69, a former U.S. Secretary of State, former U.S senator, and former first lady to President Bill Clinton, in the wee hours of Wednesday morning as the results rolled in from across the nation. Trump takes office on Jan. 20.
Here are a variety of thoughts compiled from a business and economic standpoint on what a Trump presidency might bring:
Uncertainty is certain when breaking gridlock
“The biggest immediate challenge to the economy will be headwinds created by policy uncertainty. That’s the tradeoff for breaking gridlock in D.C.,” said Jeff Humphreys, director of the Selig Center for Economic Growth at the University of Georgia. “The main economic impacts will be in 2018 and beyond, simply because even with a receptive Republican Congress it just takes a while for federal policy changes to be made and for the changes to gain traction in the real economy. I do not think it will increase a chance of recession for 2017, which is about 35 percent.”
“Also, in terms of the economic outlook there are good and bad aspects of a Trump presidency relative to the status quo and they will at least partially offset each other,” Humphreys said. “The good include less gridlock, better prospects for tax reform, regulatory relief (and fewer new regulations), and more infrastructure spending. The bad include policy uncertainty, a likely pull-back from globalization as we renegotiate major trade agreements and more strictly enforced U.S. immigration laws via something like e-verify, and probably larger federal budget deficits.”
New president has work cut out for him to unite sides
“Everyone’s instinctive response is that 'the Deplorables' have won and the American establishment is reeling. The establishment certainly is. But take a close look at the exit polls: Clinton, not Trump, took the two bottom groups with respect to income: Under $30,000 and under $50,000. Trump won all of the rest, sometimes narrowly, but he won them. And white women college graduates only slightly favored Clinton, while trade and state-of-personal-finances badly hurt Clinton. Views of the parties are polarized, but more people have a better view of the Democrats than the Republicans. So Trump now has to make policy for Carl Icahn, Peter Thiele, and his other supporters, while also doing something real for the heartland. The Democrats and the other Republicans all failed at this.” — Thomas Ferguson, professor emeritus of political science at the University of Massachusetts, Boston
Trump may succeed where Clinton could not
“Candidate Trump’s policy proposals were a mix of conservative and liberal elements, such as large tax cuts weighted toward upper-income households and major infrastructure spending that a President Hillary Clinton could not have gotten through Congress. Even though Republicans do not have a filibuster-proof majority in the Senate, it is likely that a good part of that mixed agenda will be implemented.” — Robert Grafstein, interim dean and Georgia Athletic Association Professor of Political Science at UGA
‘Unclaimed generation’ of Millennials costly for Democrats
“Democrats just assumed that Millennials would lean to the left, but they’re an unclaimed generation. After decades of failed wars and economic policies that have exacerbated income inequality and left half all Millennials living paycheck to paycheck, millennials have lost faith in our political system to solve their problems.” — David Cahn, co-author with Jack Cahn of the book, “When Millenials Rule”
Stock market response to Trump may set the tone
“There’s some evidence that the behavior of the stock market in the days after an election can, under certain circumstances, predict the rate of economic growth for the remainder of the president-elect’s administration. A rally the day after would be followed by four years of recessions and subpar growth; a sell-off would be followed by strong GDP growth. In other words, the stock market was consistently, reliably wrong. In 2012, Obama handily won re-election, but was greeted with boos on Wall Street, with a whopping 313-point sell-off. And then the economy registered quarter after quarter of solid growth for the next four year, hardly the recession that the stock market seemed to signal.” — Stephen Mihm, associate professor of history at UGA
Manufacturers say it’s time for healing, creating more jobs
“Tonight marks the end of one of the most contentious elections in our nation’s history. While many are celebrating tonight, others are disappointed — some with the results, some with the process. It’s time for healing, and that work must begin now ... This election makes clear that Americans agree that manufacturing is the nation’s priority. They want our industry to lead the world and create more jobs. They know that when manufacturing is strong, America is strong. It will be up to us to channel that enthusiasm towards the right policies.” — Jay Timmons, president and CEO of the National Association of Manufacturers, in a letter from more than 1,100 manufacturing and business leaders
Trump’s victory could boost far right in Europe
“The surprise win of Donald Trump is a gift from heaven for the far right around the globe. While the Trump victory could further strengthen the already considerable momentum of the European far right in the coming months, it could come back to haunt them later on. Just as the Brexit vote has decreased Euroscepticism in several European countries, the expected chaos of a Trump presidency could lead to a popular backlash against far-right parties in Europe. This is the main reason why Europe’s far-right leaders are cautious in their embrace of Trump, celebrating the phenomenon rather than the man himself.” — Cas Mudde, associate professor of international affairs at UGA
Shocking result appears to render the polls worthless
“Shock ... shock was the general tone of the media and the talking heads in reaction to last night's presidential election resulting in a conclusion opposite of the national polls. Now many have long assigned a level of legitimacy to national polls equivalent to those calling for Punxsutawney Phil to see his shadow, but coupled with the lack of predictive power ahead of the Brexit, last night's Republican victory, for many, at least at this point, renders national polls virtually worthless. Polling legitimacy aside, the American people have spoken, electing Donald Trump, a Washington outsider, the 45th American President. In an electoral vote 276 to 218, the policies of the past propelled voters to the polls in search of an anti-establishment platform in what many are calling a “stunning victory.” In other words, Trump now faces a heightened expectation of change and progress against the backdrop of stagnant economic activity, waning income growth and a growing divergence among ‘class lines.’ — Lindsey Piegza, chief economist with brokerage firm Stifel Nicolaus & Co.
Markets will digest election; smaller banks should be a winner
“The markets are reacting to the probable election of Donald Trump with a risk-off trade and financials are trading on a view that the Fed might be on hold (certainly less clear when and how the Fed might proceed). However, we expect a positive snap-back move once investors digest the results and factor in a more favorable regulatory environment for the financial sector. Big winners are insurers, brokers, and asset managers since this increases the chances that the DOL's fiduciary rule is delayed, rewritten or even scrapped. Smaller banks should still do better in Washington than big banks.” — Brian Gardner, equity research analyst with Keefe, Bruyette & Woods