In less than two years there will be congressional elections. Some priorities of the President may be hard to fulfill when the congress starts thinking about their reelection. Other priorities, good and bad, will not be remembered by the public.

There appears to be six priorities for the President Elect. In alphabetical order these are

1) Climate. Two major suggestions are eliminating the requirement for increased electric car production and eliminating the tax benefits for buying an electric car. An uncontrollable issue is the number of 110-degree days in the summer and the damage by floods, hurricanes, and tornadoes in the next two summers. Storm damage insurance rates are already forcing individuals to sell.

2) Energy. Open areas for increasing oil and gas production. Allowing construction of export terminals. This has climate issues, but the benefits seem to outweigh the negatives, lower prices domestically and lower prices for Russian oil.

3) Housing costs and availability. This could make President Trump’s reputation. He cannot lower prices, but he can lower inflation. He can eliminate inflation by appointing Governors that hold the classic view that all inflation is caused by the Fed.

4) Immigration. The biggest immigration problem is corporations cannot hire the skilled immigrants they need. Microsoft, Amazon, Google, and IBM are some of the companies that have opened facilities in Canada where it is easy to hire immigrants. The second most important is a need for immigrants in a country with a falling population and millions of unfilled jobs. The undocumented wave is partially caused by the failure to open immigration to more documented workers. Most countries have this problem. They solve it by forcing undocumented immigrants who have a job, or a job offer to leave the country and pick up legal papers at the embassy of the country were the job is. Everyone is happy and legal. The best immigration proposal was to bring the governors into the immigration discussion. Each Governor can get the immigrants they need.

5) Tariffs. It is interesting that every economist agrees that tariffs are counterproductive and a tax on the poor. Prices go up and job losses exceed job gains. The great depression started in 1929 with a stock market crash almost the same day as a major tariff bill was passed. The depression led to the second world war. Trump has already lowered his tariff suggestion to 10%.

6) Tax Cuts. The tax cuts that were passed in the first Trump administration were necessary. Our corporate tax was 30%. The rest of the world was much lower. Ireland was 15%. U.S. corporations were selling out to foreign buyers who could out bid U.S. buyers because of these high taxes. There are now only about 4500 domestic public companies. 25 years ago, there was 7500 companies. The tax cuts looked like an older compromise bill where Republicans cut corporate taxes while Democrats agreed if individuals’ taxes were also cut.

It will be interesting to see how it all pans out.

Katz Family Financial