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The Consequences of a Trump Shock

by Simon Johnson
Now is a good time to ask whether the global economy is in good enough shape to withstand another major negative shock. The answer, unfortunately, is that growth and employment around the world look fragile. A big adverse surprise – like the election of Donald Trump in the US – would likely cause the stock market to crash and plunge the world into recession.
Simon Johnson, a former chief economist of the IMF, is a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-founder of a leading economics blog, The Baseline Scenario. He is the co-author, with James Kwak, of White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.

to read Simon Johnson's article published on Oct 29, 2016, click on

https://www.project-syndicate.org/commentary/economic-consequences-of-trump-victory-by-simon-johnson-2016-10

Trump promises to boost US growth immediately to 4-5%, but this is pure fantasy. It is far more likely that his anti-trade policies would cause a sharp slowdown, much like the British are experiencing.

In fact, the impact of a Trump victory on the US could well be worse. Whereas British Prime Minister Theresa May’s government wants to close the UK’s borders to immigrants from the EU, it does want trade with the world. Trump, on the other hand, is determined to curtail imports through a variety of policies, all of which are well within the power of a president. He would not need congressional approval to slam the brakes on the US economy.
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Even in the best of times, US policymakers often do not think enough about the impact of their actions on the rest of the world. Trump’s trade-led recession would tip Europe back into full-blown recession, which would likely precipitate a serious banking crisis. If this risk were not contained – and the probability of a European banking debacle is already disconcertingly high – there would be a further negative spiral. Either way, the effects on emerging markets and all lower-income countries would be dramatic.

Investors in the stock market currently regard a Trump presidency as a relatively low-probability development. But, while the precise consequences of bad policies are always hard to predict, if investors are wrong and Trump wins, we should expect a big markdown in expected future earnings for a wide range of stocks – and a likely crash in the broader market.
We also can’t ignore the correlation, since the early-1970s, between globalization and inequality.

There are lots of economists, both everyday and academic, who understand that a tiny group at the top has captured most of the benefits of trade agreements and other measures that have allowed U.S. corporations to engage in increased international trade, both importing and exporting commodities that have boosted their bottom-line.

http://evonomics.com/mainstream-economists-responsible-electing-donald-trump/
by www.booktv.org
http://deadline.com/2016/11/john-oliver-donald-trump-not-normal-1201853810/

"America proved that no grandpa is too racist to become leader of the free world...

Trump is like a Magic 8 Ball, every time you shake him gives you a different answer...

The media supposed to catch a serial liar failed. Some blame lies with the mainstream media who waited far too long to take Trump seriously and gave him billions of dollars worth of free media..."
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