Rich Karlgaard, publisher and columnist for Forbes, offers insights on what Donald Trump's administration should focus on at a Jan. 5 speech at the 2017 Potato Expo in San Francisco.
SAN FRANCISCO — In the wake of the surprise win by Donald Trump in November's election, the prediction business hasn't been kind to many pundits.
Even so, Rich Karlgaard, publisher and columnist for Forbes magazine, offered his look at the future in a Jan. 5 speech at the 2017 Potato Expo.
Noting several famously wrong predictions by pundits about the stock market, the appeal of the iPhone and the recent election, Karlgaard said he believes Trump has a mandate to grow the economy. Karlgaard also touched on the "megatrend" of the growing middle class population around the world — predicted to grow from 1.8 billion to 3.2 billion by 2050. After reviewing the massive changes in newspaper, retail and software industries in the last 15 years, he predicted similar disruptive effects of technology on agriculture, energy, manufacturing, health care, education and transportation in the next 15 years.
Mandate for growth
Karlgaard said the question of whether Trump has a mandate from voters is disputed by some who say he lost the popular vote to Hillary Clinton by 2.9 million votes. What's more, Trump's popularity rating before he takes office is still below 50%.
On the other hand, Trump supporters say he won far more counties than Clinton, dominating rural regions.
"I think he does have a mandate that unites people of both parties, to fix the gap, to get the nation back to a higher rate of growth," Karlgaard said.
Trump's mandate is to generate a higher economic rate of growth for an economy still struggling to find its footing after the 2007 recession, he said.
The recession of 2007-09 was by far the most traumatic financial event in recent history, with the stock market sinking 55% during that time.
"We underestimate the trauma that it has caused, and the aftermath is not very good," he said.
The U.S. has experienced 2% growth since the recession in June 2009, Karlgaard said, well below the 3.1% historical rate of growth from World War II until today, even after accounting for the 11 recessions since World War II.
Karlgaard said the U.S. economy should be growing at closer to 4% per year. The fact the economy has been growing at less than historical average has left Americans $3 trillion poorer than they should have been.
Karlgaard said that 45% of Americans have less than $400 in free cash and 63% of Americans still think the U.S. is in recession.
Trump and his administration will be motivated to boost U.S. economic growth, since the 2018 race will feature 33 seats up for grabs, with Republicans defending eight seats and Democrats defending 25 seats.
"If Trump can get growth to 3%, he has the potential to clean the table in the 2018 Senate race," Karlgaard said.
With the election of 2018 tilted toward the GOP, Senate Republicans could control more than 60 seats in 2019, which make Trump supported legislation veto-proof.
Trump's agenda in his first months in office is subject to much speculation. Some of the options, Karlgaard said, are:
- Infrastructure investment;
- Tax reform;
- Cutting federal aid to sanctuary cities;
- Repeal President Obama's executive orders;
- A wall at the U.S./Mexico border;
- Deportation of illegal residents who have committed crimes or have no work history;
- Trade renegotiations; and
- Amend or repeal Obamacare.
Trump's economic advisers don't all share the same opinions on the next steps, Karlgaard said. That could lead to internal debates about trade, the strength of the dollar, tax reform, the U.S. relationship with China and other issues, he said. In the end, the result could be that Trump will be more pragmatist and resist protectionism in trade policy, he said.
With changing economic conditions, Karlgaard urged the potato industry to tell its story to consumers.
"There is enduring quality of a powerful narrative, and there is a good story about what you do," he said, noting that companies that invest in the mental/emotional, social and physical health of their employees will be most equipped to adapt to challenges and changes in the market.