Experts’ Insights About the New Administration
By Diane Stirling
How will the actions and decisions of a Donald Trump administration affect the welding and gases distribution industry? What initiatives will the new president launch that could change the business climate for GAWDA distributors and suppliers? What’s in store for trade policies, regulatory issues, health care insurance and other workplace issues?
During conversations for GAWDA’s annual Forecast Report, many distributor and supplier members expressed renewed optimism and their hopes that changes in Washington will provide momentum and positive news for their businesses.
So we asked some folks who study and track politics, elections and government for their thoughts on the 2016 election, the outcomes of a perhaps-unexpected Trump victory and how the new president’s leadership style might impact this industry. Here are their insights.
Presidential Announcements: ‘So Far, So Good, But We’ll See’
From the perspective of the Council of Supply Chain Management Professionals, new plans and policies announced by President Trump thus far are likely to have positive impacts for businesses, according to Rick Blasgen, the Council’s executive director. “If you eliminate all the rhetoric,” he says, Trump’s announcements “appear to be so far, so good. We’ll see.”
Six areas where Trump’s plans can be positive for manufacturing businesses, Blasgen says, are corporate tax reform, “which would make it easier for companies to make products here,” and reducing business regulations, “which could facilitate hiring more workers and creating the environment where they’d be more productive.” Repealing and replacing the Obama health care system, “since it is a real strain on small and large businesses,” would also be good news, he adds.
Changes in trade policies are likely to improve conditions for U.S. businesses, and Blasgen believes, “if we have better trade relations with other countries, then the United States has the opportunity to be that much more of a powerhouse in technology and manufacturing.” Investments in modernizing infrastructure, especially at U.S. ports, plus leading discussions with labor about realistic staffing requirements, could result in higher product volumes for manufacturers, he adds. Finally, easing regulations on banks would help alleviate tight money, promoting corporate growth, Blasgen says. “From a pure business standpoint, everything that’s being said seems pretty positive and will have a positive result for manufacturers all the way along the supply chain,” he concludes.
Uncertainty the Byword in a Year of Unchartered Waters
“Everything that used to be predictable is unpredictable this time,” observes Lee Miringoff, director of the Marist Institute for Public Opinion, political science assistant professor and principal in the Marist-McClatchy Poll. For the periods before and after election, “nothing has played true to any political consultant’s handbook in how campaigns are waged. Now, the transitions are occurring with great uncertainty,” he says.
There remains a great divide of opinion across America, he says, citing the McClatchy-Marist Poll’s year-end survey showing 49 percent approve, but 42 percent disapprove, of Trump’s handling of his presidential transition. According to Miringoff, that’s another offbeat situation. “The problem is, presidents at this point typically enjoy a honeymoon, and this isn’t happening.”
The entire year ahead appears to present, “a whole lot of uncertainly in a variety of policy areas,” he says, noting that the directions of health care, foreign policy, domestic issues and economic initiatives are “all up for grabs right now.” Having control of all three branches of government in Republican hands means “the responsibility for making Washington work again” is squarely theirs, as well. “Sometimes when you lose the object of your scorn [Obama], you’re left with having to defend what you do. It’s the ‘Pottery Barn’ example – if you break it, you own it,” he contends.
“I think uncertainty is the word that captures what the next period is going to look like. And clearly, the polarization that exists is not going away any time soon,” Miringoff concludes. (See more about The Marist Poll here: maristpoll.marist.edu/politics-section/national/)
Trump is a Change-Driven but Unpredictable Personality
President Trump may have been sending clear messages about his positions, but he’s still an enigma as a person and personality, says pollster and political commentator John Zogby, founder of The Zogby Poll.
“Broadly speaking, we really don’t know for sure what we’re in for,” Zogby says. As a change-driven person, Trump “is giving the appearance of thinking or talking centrist, but acting rightist. He’s unpredictable, but we know he’s serious about winning on deals,” Zogby says. He believes Trump “is a guy who understands investment tax credits and who’s going to back a very large stimulus program, so there is some reason at least for this industry to be optimistic. He clearly opposes regulation; he wants to simplify the tax code; he’s friendly to offshore drilling, to the pipeline, to natural gas and hydrofracking. And he has a majority in both Houses,” Zogby adds.
“Trump is a very unpredictable personality, and one that is very unpredictable ideologically,” Zogby continues. “Who is Donald Trump, politically? We’re getting a clear message on who he’s appointing, but this is also a guy who enhanced his career with, ‘You’re fired!’ So what the good Donald can give us the good Donald can take away, too,” says the pollster.
The Economy’s in a Good Place, Regardless of Who’s in the White House
In the near term, a Trump presidency won’t have a huge impact on the U.S. economy, because “that is like the world’s largest aircraft carrier, you can’t turn it quickly, no matter what you do,” says Alan Beaulieu, principal and president at ITR Economics. Time is a factor, as well, because “whatever Mr. Trump decides to do, and assuming he gets congressional approval to do it, implementation is tough. There are no quick resolutions.”
Regardless, GAWDA’s chief economist believes the U.S. economy is fundamentally “in a good place. It’s expanding, people are getting jobs, earning more money, and those are the fundamentals that matter. Who’s occupying the White House is secondary to that.” Beaulieu says his analysis and related statistics “demonstrate very clearly that the economy does what the economy is going to do, no matter what party controls the White House. While it becomes so important to us in our presidential election, I’ve run the numbers, and the Gross Domestic Product of the United States doesn’t have a statistically better growth rate as to one party or the other in the White House. It doesn’t favor one party or the other in the stock market; the stock market is completely agnostic.” While he believes politics “is an interesting theater,” he contends that at the pace Washington works, “nothing is going to get done in 2017 to help you or hurt you.”
It’s To Be Proven If Running a Business and a Nation Can Be Parallel
The election of businessman Donald Trump as the next United States president and his selection of a majority of business leaders in his proposed cabinet is a non-traditional twist in government, says Otha Burton Jr., Ph.D., of the Institute of Government at Jackson State University.
“Those business leaders may know how to successfully manage in an entrepreneurial environment that coexists in America’s republic and democratic foundation. Generally proven, that’s good for the economy. Still, it has to be proven that running a nation as you run a business can be parallel. In government, your customer doesn’t have a particular profile or prototype. You are dealing with a very broad spectrum of people and needs and have to be good at listening, and providing policy and outcomes that sometime have to be redistributive to assist those most in need,” he suggests.
In addition, Burton says, Americans must now gauge what happens with how the administration meets their expectations. “On the right is a huge tent incorporating the Republican Party, the business community, the extreme alt-right and their divisive and perceived exclusionist views, and all those who had different expectations for a leader of “change.” On the left, it will be challenging how those who lost power can still appreciate the value of America enough to make things under a Trump administration work both legislatively and through advocacy in the American way of discord to achieve progress for the greater good.”
Change, Return to Thoughtful Legislation Is a Breath of Fresh Air
“The Supply Chain industry has reason to be excited about the impending impact of the new Trump administration,” says Kevin F. Smith, immediate past chair of the Council of Supply Chain Management Professionals. “The first 100 days should be an eye-opening experience, but the excitement of change based on pro-business ideas and a return to thoughtful legislation will be a breath of fresh air after holding our collective breath for eight years,” he says.
Smith believes Trump’s administration will mean “a return to a more business-friendly environment that allows for discourse and thoughtful legislation [as] a welcome change from the perceived threat of dogmatic and arbitrary decisions.”
In addition, the supply chain industry has opportunity to take Trump’s proposed policy statements seriously, rather than literally, he says. “Will we really build a wall between the U.S. and Mexico, or will we find a way to balance domestic manufacturing with assembly and sub-assembly that is better suited to the combined workforce in both countries?” he asks. “Likewise for manufacturing and assembly operations in Asia. With escalating labor costs in China, and a more business-friendly environment in the U.S., it is conceivable that companies will look for ways to bring manufacturing and supply chain operations back to North America and be closer to the consumers that they serve.”