Trump's Economic Advisers Send Mixed Messages

Recently Trump's economic adviser Stephen Moore weighed in on 'Fox & Friends Weekend. The topic was the impact of the Amazon and Starbucks strikes during Christmas. Moore warned how the actions these workers were taking could backfire. All in all the interview did little to reassure me that the direction the Trump economic team was going to move us in the direction of economic Utopia. 

What Policies Will We See And How Well They Will Work?

While I have been supportive of the idea we need tariffs as a way to level the playing field when it comes to trade. I have concerns about some of Trump's proposals and his ability to push them through. The huge pork filled bill that easily just passed Congress to keep the government open screams fail to the idea anything is about to change. 

Both the Democrats and Republicans make up the "uniparty," a term to suggest that our ostensibly separate political parties function as a single party when it comes to approving new spending. This makes it difficult to think the razor-thin margin of Republicans forming the new Congress will be any more successful at curbing future spending. Adding to my woes are talks about the government diving into investing in Bitcoin and a number of other questionable ideas.

Still, the focus of this article is more on what flowed from Moore's mouth during the interview. Moore repeatedly endorsed Amazon a company that has done huge damage to Main Street and small businesses on a number of fronts. Yes, Amazon, with the help of our government, has unleashed a wave of "creative destruction" that has altered our society, but it could be argued, not in a good way.  

Moore then pushed forth how Americans under Trump should expect to see their wages go up but missed telling us how this would lower inflation. Nowhere was talk about increasing productivity. Forget the spin, this is not about whether someone is for or against unions, it is about producing a sustainable economy by increasing productivity.

Placing big business over America's small businesses that have suffered over the years is reason for concern. These large companies have lobbied their way to prosperity and are eating the lunch of American workers. If Amazon had to act the way other companies had to, it most likely would not exist.

Then there is DOGE, the "Department Of Government Efficiency." This newly created organization, headed by billionaires Elon Musk and Vivek Ramaswamy is promising to slash at least $2 trillion from the federal budget. Much of it by slashing the number of government workers and whole departments. Both claim they can downsize the federal workforce by forcing employees to return to the office, which they hope would prompt many of them to quit.

The duo, as outside advisers, have targeted areas such as the Internal Revenue Service, the Department of Education, the Federal Bureau of Investigation, and the Nuclear Regulatory Commission. They also want to review foreign aid, defense spending, and the inaccurate payments the government sends to Social Security recipients and others.

At an event in Philadelphia on October 18, Musk said, "We will reduce a lot of government headcount, but we're going to give very long severances. Like two years, or something like that." He went on to say, "The point is not to be cruel or to have people not be able to pay their mortgage or anything."

Taking a big chunk out of federal spending is easier said than done. Much of the budget supports mandatory programs, which must be funded by existing laws. Also, there are many high hurdles to clear when it comes to firing Federal workers. Paying them long generous severance pay will do little to halt spending. 

We have heard many promises of huge tax cuts mixed in with promises of cutting deficits. Trump's economic advisers are sending mixed messages, what they can or will do is still very much up in the air. I need to see results from DOGE, regulations cut, and real help for small businesses throughout America before I get excited. It might be wise to put the celebration on hold until we see results rather than just promises.

 

 (Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog)