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VOL. 10 | NO. 18 | Saturday, April 29, 2017

Editorial: Optimism and Uncertainty Amid a ‘WWTD’ Mindset

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Since the presidential election in November, economists and investors have been judging the future by a standard dubbed WWTD: What would Trump do?

Much of the early speculation was based specifically on what Donald Trump said as a candidate. In the last four months, however, that standard has come to be judged increasingly on what is possible with the art of compromise.

Those watching the nation’s economy are also contemplating the timing of the next economic downturn, even if it is a figurative blinking of the lights compared to the Great Recession, the worst slump since the Depression.

That is no small consideration in the Memphis area, where the post-recession recovery lagged behind other areas of the country. The data in The Memphis News’ Q1 Economic Overview (pages 14-15) largely show a local economy that’s getting stronger. But the recovery isn’t over yet; as we’ve heard from those in the real estate industry, some parts of the housing crater may remain features of Memphis’ economic landscape for quite some time.

The inevitability of another downturn, however mild, is creating an environment in which Trump’s campaign promises – immigration changes, including a wall at the U.S.-Mexican border; the repeal and replacement of Obamacare; and tax reform – are on the clock.

The clock keeps ticking, even when President Trump contradicts the rhetoric put forth by candidate Trump just months ago.

The gap between what Trump said and what it now appears he will advocate for in a sustained effort is creating its own brand of volatility for those on all sides of these vital issues.

Optimism among business leaders is most evident in the area of tax reform, which may be where many of the hard lessons of Trump’s first 100 days in other policy areas are applied.

Trump and Congress are ultimately going to be judged more on content than speed. But the calendar bears watching.

Political leaders on all sides of these issues are looking at a different horizon: the 2018 midterm Congressional elections. Many past presidents, both Republican and Democrat, have seen the tides turn during the midterms as they lose the partisan majorities in the House and/or Senate just two years into their administrations.

For our elected representatives on both sides of the aisle in Washington, the merits of the Trump administration’s proposals should be judged by the tentative nature of our particular recovery.

Washington’s debate on the tending and growth of our economy is already underway in Tennessee and elsewhere, and nowhere is this linked more than in health care coverage.

The early failure of a Trump health care plan that wasn’t well thought out was caught in a crossfire of political viewpoints. It was also an early indication to watch the clock but also watch the details.

PROPERTY SALES 56 289 2,908
MORTGAGES 55 226 2,009
BUILDING PERMITS 108 1,002 6,703
BANKRUPTCIES 42 248 1,225