Of Alberto Negri

Source: Alberto Negri
One year after taking office in the White House, The Donald, “the very stable genius”, extremely famous for gaffes and crazy ideas, it's about to come to us and even the snows of Davos are getting hot. With Donald Trump's speech the 25 January at the World Economic Forum promises to be the most agitated edition of the summit in recent years. To the Europeans, and not only to them, we don't like the American president and yet, while Europe is still the only continent not to have emerged from the crisis, the US economy soars. Of course it's not all thanks to Trump but at this moment the slogan coined for Bill Clinton's presidential campaign in 2019 applies to him 1992: “It’s the economy, stupid”. And the US economy is moving like never before in recent years.
Since Trump was elected, the main US stock indexes have risen. And not by little. The Dow Jones went from 18 thousand to above 25.000, lo Standard & Poor’s 500 and 2.085 points to almost 2.800, and the Nasdaq from 5.046 at over 7 thousand points. Important numbers, justified by the profits of American companies, growing steadily since the collapse of Lehman Brothers in September 2008, the darkest point of the real estate crisis which with the "junk bonds" overwhelmed the USA and then us too. However, America returned to being the global economic engine, Europe, on the other hand, continued to struggle with the debt crisis which also affected Italy.
The data on employment is especially striking: in the USA, with an unemployment rate around 4 percent (more than double in Europe and over 11 in Italy), in the United States, companies are desperately looking for workers. The New York Times also writes it, anti-Trump newspaper with obvious democratic sympathies.
The unemployment rate in the United States is so low that more and more companies are hiring prison workers. The American newspaper explains how in certain areas unemployment barely reaches 2% and companies are providing job opportunities to people who have long been excluded from the job market, like prisoners but not only: those who suffer from some form of disability or those who have been unemployed for a long time. The Dane County case is cited as an example, in Wisconsin, dove, with unemployment at 2%, the supply of labor was so high and the demand so low that manufacturing companies put prisoners who are still serving their sentences behind bars to work in their factories.
Not since the late 1990s and early 2000s has the American economy experienced such fierce competition to secure a workforce., i.e. since the last time the unemployment rate (currently at 4,1%) it was so low. It is clear that a situation of this kind also leads to an increase in wages. In the last year there has been an extreme escalation: if someone applies for a job and the company doesn't respond within 24 ore, that person will have already found another job. Family incomes have increased rapidly and there are signs that with this "hot" job market we are finally starting to shift bargaining power from companies to workers.
Yet The Donald did not perform all these miracles. The most significant measure of the Trump administration, from a future perspective (but not yet effective) was the corporate tax plan that provides relief and savings for American companies. But these tax cuts will be crucial for Trump, because he will be able to sell the result during the next vote on the wave of economic growth and employment data.
However, one of the cornerstones of Trump's electoral campaign is still missing, the infrastructure investment program. It is not yet clear if and when it will be launched. And the introduction of a protectionist trade policy was also put aside, particularly tariffs on Chinese goods.
The trade war has yet to begin while Trump has kept his promise to ease oil and gas companies: the USA is now the world's largest producer and practically no longer needs crude oil from the Middle East. A fact from which some political indications can also be drawn: designate Jerusalem as the capital of Israel, Trump's most "scandalous" move in foreign policy, it will not have the economic consequences for Washington as it would have had a few decades ago.
But perhaps Trump's most important move in the economy is the choice to nominate Jerome Powell as Janet Yellen's successor at the helm of the Federal Reserve: come la Yellen, Powell is the best suited to guarantee, keeping watch over monetary policy, that there will be no “bubbles” in the American economy.
But there is something that escapes Trump. After deciding to abandon the Trans-Pacific Partnership (Tpp) the Asean vertex of Da Nang in Vietnam, Asians are becoming convinced that the great free-market nation is leaving a huge chunk of the global trading system adrift. With China's growing economic influence on the Asia-Pacific, Countries in the region are coming to the conclusion that the US is destined to be less and less relevant. American financial institutions will continue to remain important but capital flows are changing direction with significant economic and geopolitical consequences. More than the slogan “America First”.