Monday, February 26, 2018

On Donald Trump - Interview part 2

Gary Shilling talks to ThinkAdvisor on President Donald Trump and his effect on the people and stock market.


What are the chief positives of President Trump’s tax package?

The cuts, kind of, even up the playing field in the corporate area. They don’t really do much net-net in the individual area. They front-loaded them, with the idea of spurring the economy. But it was a political game — we’ve got an election coming up this fall. However, there was serious need in the corporate area for updating in a globalized world. We had a 35% tax rate, and now it’s 21%. Amazon and Microsoft and [other companies] had cash stashed overseas.

Why will the cuts have little effect on individuals?

There’s an effect in the next year or two because they’re front-loaded. But then that’s basically taken away in the succeeding years. So it may spur incomes in the next year or two, but that fades over time.

Will people start spending more?

Higher-end people don’t adjust their spending when their incomes or assets go up and down. But with more money in their hands, middle- and lower-income people tend to spend. So I think that whatever increases they get in income will probably go to rebuilding their savings, particularly baby boomers, who have been notoriously poor savers throughout their entire lifespan.


How much do you credit Trump for the stock market’s record-setting performance?

Some things that Trump has accomplished suggest that he has had a measurable impact on stocks. The most important one is deregulation. That’s his biggest accomplishment. Deregulation isn’t dramatic. [I mean], there’s no Rose Garden signing ceremony for deregulation. It’s a little of this, a little of that. It’s putting different people in charge. It’s either ignoring regulations that they want to avoid or changing them.


via www.thinkadvisor.com/2018/01/22/gary-shilling-famed-bubble-detector-urges-caution?slreturn=1518441127&page=3