Forget Meryl v Donald - great growth is the story!
The news that grabbed the headlines yesterday was that great actress Meryl Streep giving it to Donald Trump, who then tweeted that she was a “Hillary lover” and was “overrated” as an actress!
He couldn’t be so right on the first accusation and so wrong on the second but this Trump sideshow takes away from more important stories yesterday that point to stronger growth in the USA and in Oz!
Overnight while Streep and Trump were at it stealing the headlines, thanks to a press that evaluates news on a click-bait basis, a little-known chief economist from the very well-known Deutsche Bank, David Folkerts-Landau, said that the new US President, who takes over on January 20, might just keep his promise to double US economic growth!
This is a huge story and you have to hope this Deutsche view on Trump is more accurate than Trump’s assessment of Streep’s acting ability. On the other hand, it might show that Meryl’s economic credentials don’t match her ability to tread the boards and to be a caring, good egg.
This is what CNBC reported that Folkerts-Landau predicted:
- The combined impact of tax cuts, infrastructure spending and less regulation would pump up US and world growth.
- US growth for 2017 would be 2.4% and 3.6% in 2018.
- World growth was pushed up from 3% to 3.4% this year!
- This would not only help economic growth, but also underpin great stock market rises.
"This policy will be successful in moving the U.S. economy away from low-growth secular stagnation towards significantly more buoyant performance," Folkerts-Landau said.
"We would not be taken by surprise by a doubling of the growth rate of real GDP in the U.S. over the next two years, nor by a further significant move up of equity valuations and a material further appreciation of the dollar."
But wait, there’s more.
The Australian ran with a front page story that was headlined: “Ray of light in economic tunnel”, which is the kind of sentiment I love to see because it helps build confidence. Since the GFC, the media has help perpetuate our negativity, partly explaining lower business investment than we need and the part-time job creation from employers.
This positive story was linked to the Government’s advice from top public servants that our export outlook, from the likes of iron ore and coal, should exceed expectations.
Energy and mining exports are expected to bring in $204 billion this year and this will underpin a sustained period of trade surpluses. Last week, we registered our first trade surplus for three years.
This could be a corner-turning event for our economy and should help us beat the world record for growth without a recession, which is held by the Dutch at 103 quarters.
All this comes with the economic outlooks for China, Japan and Europe coming in better than expected.
I know Donald is a pain in the butt, however if he can pull off this economic miracle, then he will be an Oscar-winning US President, who, one day, could be praised for getting the US and world economy out of its post-GFC funk that bred economic negativity and low growth.
I’d bet Streep is a miles better actor and person but this guy can act too and right now he can pull a bigger crowd than anyone in the world, as our news services prove nearly every day.
Of course, I hope we never have to look at his work and cry “Mama Mia” because what he has to pull off can be summed up by another movie starring Streep and Alec Baldwin (another Trump-hater and impersonator). And the title to that movie? “It’s Complicated.”
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Published: Tuesday, January 10, 2017