The AEC Lens
Alex Carrick, Chief Economist at ConstructConnect
Alex Carrick is Chief Economist for ConstructConnect. He is a frequent contributor to the Daily Commercial News and the Journal of Commerce. He has delivered presentations throughout North America on the Canadian, United States and world construction outlooks. A trusted and often-quoted source for … More »
That’s Not How Things are Usually Done
March 3rd, 2016 by Alex Carrick, Chief Economist at ConstructConnect
Article source: CMDGroup
Okay, I admit it, I’m flummoxed.
I’m supposed to be writing about the economy, but how can I stay focused in the midst of a U.S. presidential election campaign.
Voting day may still be eight months away, in November, but there are distractions galore in the surround-sound coverage of the primaries and caucuses.
The economy has become a side-show event compared with what is going on in the electoral center ring.
Over the past decade-plus, the differences between the Democrats and Republicans have become deeper and more firmly entrenched.
Positions on the left and right have turned inflexible. Celebrity commentators in the media have played roles in marshalling legions of strident supporters.
Policy stances have proven intractable, yielding gridlock in Washington.
The crop that’s now being harvested is a disdain for politics as normally practiced.
Among Democrats, Hillary Clinton has been hard pressed to establish a lead over her rival, Bernie Sanders, a man who doesn’t hesitate to label himself a socialist.
On the Republican side, the candidacy of Donald Trump was supposed to peter out by last September, according to almost all the pundits.
Now, with Super Tuesday in our rearview mirrors, it’s almost a certainty Mr. Trump will be the GOP’s nominee come this fall, despite his elevation being opposed by nearly the entire establishment wing of his Party.
I admit to finding sport in watching the perplexed expressions on the faces of hosts and guests alike on CNN as they try to explain, in traditional terms, what is transpiring.
Here’s what it comes down to: Mr. Trump’s whole success has been based on acting in opposition to the phrase, ‘That’s not how things are usually done”.
After November, depending on whether it’s Hillary or The Donald who will be occupying the White House, practical economic matters – especially as they pertain to promises made on the election trail − will return to the fore.
Both Hillary and The Donald have vociferously railed against countries perceived as taking jobs away from Americans.
Backed into a corner on the subject by her Democratic adversary, Hillary has expressed opposition to the TPP, the Trans-Pacific Partnership free-trade pact.
Mr. Trump wants to strike back against China for taking employment away from America’s blue collar contingent.
His proposal to build a wall along the U.S.-Mexico border has foreign trade implications that are a sidebar to his main capital spending thrust.
Mr. Trump will demand that Mexico pay for the wall. The primary lever at his disposal to force such a result will be trade sanctions.
Should he lay down that casino chip, with either China or Mexico, he’ll be initiating a foreign trade war.
There are major fallouts from trade wars. He’ll soon be hearing from an outraged populace forced to pay more for their everyday imported goods.
Bloomberg news has been reporting that Mexicans have been leaving Texas. Mr. Trump will surely say that his tough talk on immigration has been spurring them to pick up and go. The more likely cause is the weak local energy economy.
Maybe if he’s allowed to take credit for the population reversal, he won’t feel as great a need to build his edifice, valued in a range between $8 billion (his estimate) and three times as much (as calculated by a quantity surveyor contacted by the Washington Post).
Canada has so far managed to avoid drawing much attention in the U.S. election campaign.
Mr. Trump mainly seems to like Canada. I’m hoping that’s not just wishful thinking. It’s well known, however, that his affection can turn on a dime.
I admit to some worries about the first time The Donald officially meets Canada’s new Prime Minister, Justin Trudeau.
Justin, as I have been informed by my wife, − “apologies, dear” − has a beautiful head of hair.
Hopefully, Mr. Trump will take an avuncular approach and make a few suggestions about how to maintain healthy follicle growth.
Should the green-eyed monster of jealousy rear up, though, be prepared for a huge ‘crash’ at the border as billions of dollars of car parts and other goods destined for southern buyers become stranded.
Running for office in the U.S. has become a 24/7 and 365-day-a-year big business obsession.
Let’s concede, though, that it may not be good for the economic psyche.
Disparagement of the other gal or guy running for office is part of the competitive challenge.
At least half of all contestants will have nothing good to say about the economy.
Famously, each year, Warren Buffet writes a letter to shareholders of Berkshire Hathaway in which he provides insight into his investment decisions, while also expressing his philosophical thoughts concerning the overall state of U.S. affairs.
In his most recent missive, he contributed the following on the subject of U.S. politics.
“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve.) As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do.”
According to Mr. Buffet, who is someone with gravitas: “That view is dead wrong: The babies being born in America today are the luckiest crop in history.”
Canadians, along with most other citizens of the world, feel we have a vested interest in the U.S. election. Our claim, due to proximity, seems most justified.
But we don’t get a vote. Just as well. A couple of years ago, the esteemed citizens of my home town, Toronto, would likely have attempted a write-in campaign for Rob Ford. We all know how that would have turned out.
In fact, I look around at my fellow Torontonians and wonder if we don’t bear some responsibility for initially setting loose the occasionally humorous, but too often nasty and ill-considered verbal barrages that once would never have been deemed acceptable.
The steady-as-she-goes, though comparatively boring, stewardship being offered by Toronto’s current mayor, John Tory, has been a welcome relief.
Let me conclude with another phrase from Mr. Buffet’s letter to shareholders. “America’s economic magic remains alive and well.”
How easy and potentially irresponsible it is to ignore or overlook that fact.
Category: CMD Group