“What comes next?
You’ve been freed.
Do you know how hard it is to lead?
You’re on your own
Do you have a clue what happens now?”
No matter where you stand politically, I think we can all agree that Donald Trump represented a greater change from the status quo than Hillary Clinton. America voted for the greater change, thus Donald Trump will be President in January. President-elect Trump is now filling in open administration positions as rapidly as he is filling in the details into his political positions.
Regarding economic health, Trump (as a candidate) made many broad declarations of success, but he is in active negotiations with Congress trying to figure out which potential actions to start with. There are a lot of big, potential changes on the horizon. Some of Trump’s proposals are potentially very positive. For example, a corporate tax-cut wouldn’t cost too much federal revenue and could improve US competitiveness with the international marketplace for corporate domiciling. However, some of Trump’s positions might have unintended consequences. From a strictly economic point of view, I’m not sure Trump’s team has calculated the impact to inflation, loss of GDP, and administrative cost of deporting millions of immigrants. I don’t know if they’ve modeled the deadweight loss a 45% protectionist tariff on imported goods would have on global trade, or the impact of a disrupting trade war. Finally, some of President Trump’s proposals are meeting resistance from his own party. For instance, Senate Majority Leader Mitch McConnell has dismissed Trump’s call to “drain the swamp” through term limits, pointing out that elections already function as term limits.
As a result of this push-back, Trump himself seems to be adjusting his positions on the fly. For instance, Trump’s initial deportation targets of 11 million undocumented immigrants have been dropped to 2-3 million over the weekend. He has also indicated softening on some of his other positions, like keeping components of the Affordable Care Act (Obamacare) after lambasting it on the campaign trail.
What’s the upshot of all this? Even though Republicans have essential fiat power by controlling the House, Senate, Supreme Court and Presidency, we still have no idea which policies are going to take effect over the coming months.