Caleb Lawrence – KPIG-KPYG Radio – Share the Wealth – January 9, 2017
The major averages begin the week mixed on little news though consumer credit comes out later today. With Trumps inauguration drawing close additional details on his budget, trade and economic policies indicate more of the tried and failed traditional Republican base strategies of deficit spending, tax cuts and deregulation. Additional highlights indicate a growing movement towards protectionism, tariffs, and the likelihood of a trade war. Like most wars, you get a lot of collateral damage and few if any real victors, something most recently demonstrated with respect to trade wars following the introduction of the Smoot-Hawley tariff act in 1934 which proved a disaster for trade and economic growth. Also of note from an economic perspective the repeal of the ACA or Affordable Care Act without any type of replacement could well prove a disaster at several levels. Health care spending will almost certainly decline without it and as healthcare is one of the few growing sectors of the economy GDP or Gross Domestic Product could well suffer as a result. Additionally its repeal will almost certainly increase the income and wealth distribution disparity something that is already at record levels and tearing at the fabric of society. On the plus side the claims of resurrecting domestic manufacturing and the coal business will prove extremely difficult compliments of basic mathematics, automation, and robotics. Empires historically have been created with cheap abundant energy, the British did it with coal, the US managed it with oil and if Trump truly wants to make America great again then we need to crack the cheap and abundant alternative energy riddle.