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Trailer Body Builders | President Trump and The Economy: Q&A with Noël Perry

01.24.17 | Trailer Body Builders

Historically, how much difference does White House economic policy make?

PERRY: This is highly debatable. Traditional economists think there’s a huge effect and politicians, when times are good, they think they did it; when times are bad, they say it’s the economy. So in their view, the president has immense power in upturns and no power in downturns.

But the evidence says they have very little power. Did George W. Bush start the Great Recession? No. Did Obama get us out? No. Is there any difference in the policies? No.

If you compare Hillary Clinton and Trump, both are profoundly Keynesian in the sense that they believe the president - and the government - has a lot of effect on the economy. They both ran on that, and both would address it in their policy. The only difference between Clinton and Trump is she would tend to spend more and he would tend to do more tax cuts. The effect on the federal deficit would be bad in both cases - and from what they proposed, his effect on the deficit would be worse.

The one big difference is the matter of regulation. The Obama administration was relatively aggressive on climate change and greenhouse gas reduction. Trump won’t be. And it’s probable the degree of enforcement will be more relaxed.

Trump has promised to fix the economy and Make America Great Again. What needs to be fixed?

PERRY: There’s nothing wrong with economy right now, and there’s very little to do. The export numbers don’t look very good, and his trade policies aren’t going to help that.

You’ve painted a pretty grim picture about government debt. What can be done to get politicians to address it?

PERRY: It depends on what you believe, but it is grim. If you take the Austrian approach, there are profound distortions on what we spend money on and the economy is less efficient than it should be - but it’s almost impossible to prove it.

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