The survey found that 76% of executives believe the new administration will have a positive impact on their business. Reduced regulation and tax reform policies are cited by the executives to be the leading cause of why it will be positive for their businesses. The report is based on a survey that ended January 20th, the day Trump was inaugurated. But the confidence isn't just about Trump, the year-to-year increase in confidence also reflects an absence of market turmoil like in January 2016 when stocks dropped because of crashing oil prices and problems in China.
Trump ran his campaign on promises to ramping up spending on infrastructure and military and cutting taxes. The majority of the executives want to see regulations reduced first, followed by lowering taxes, and improving infrastructure. If Trump keeps his promises companies will have more room to hire full time employees and to increase benefits.
http://money.cnn.com/2017/02/21/news/economy/jpmorgan-business-executive-confidence-trump/index.html?iid=hp-stack-dom
7 comments:
I think this relates to what we discussed in class, about the important separation between management and finances in the economy. I agree that a reduction in market turmoil is definitely a valid reason to be optimistic. Maybe I'm cynical, but I think it is rash to pin economic hopes on the election platform of a very newly elected president. Executives have every incentive to adopt a positive outlook, but there are some glaring issues no one seems to be taking into account. How is the President going to simultaneously spend on infrastructure and military while cutting taxes? I will have more confidence in the hopes of President Trump and the optimistic feelings of business executives when I see the President actually passing tax policy and budgets through Congress.
I'm interested to see how the economy and businesses respond to Trumps tax cuts. Hopefully it will allow business to expand, and they will use their profits to grow and hire more employees. I tend to be skeptical of much of what Trump does, but maybe this could have a positive impact- that is, if goods in the US don't become far too expensive due to tariffs, but that's an issue of its own.
While I do believe Trump's policies will be effective for business in the short run, I do not believe that they can be effective in the long run. I want to take Trump's side on this but it is rather hard when you look at his short history of economic policy. I hope this will have a positive impact on our society, but I believe this optimism will decrease over time with more and more people disagreeing with Trump.
I am skeptical of the possibility that reduced taxes will incentivize businesses to hire full time employees and increase benefits. Giving businesses more freedom and more surplus would make the top executives confident, but I worry about how the consumer and worker will be affected by these promises of deregulation. Trump was and is a businessman and will be one when he leaves office. That is a serious conflict of interest that should not be ignored.
I think a lot of this discussion relates to class and how the state intervention can actually be good for business. In our complex financial system the cost of information and risk can be very high between parties, so actually government can help to ensure their is trust between companies and business owners/consumers can be more willing to engage in trade and other efficient outcomes for the market.
I agree with Sam's comment above regarding how state intervention can perhaps be beneficial for businesses and corporations. The government can intervene to help make sure that there is trust between corporations and consumers via regulation. This will also raise consumer confidence as well as make corporations more confidence to make risky decisions and engage more in the market.
There was an interesting article about how Trump is removing academic economists from his economic advisors. It appears that he is getting support from a lot of people who make a living focusing on short-term gains, which is an uneasy growth.
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