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Tags: robert reich | donald trump | stock market | rally

Robert Reich: Trump Will Eventually Kill Dow, Economy

(AP/Andrew Harnik)

By    |   Wednesday, 25 January 2017 05:17 PM EST

Former U.S. Labor Secretary Robert Reich warns savvy and observant investors not to overindulge in the celebration over the Dow Jones Industrial Average cracking the 20,000 milestone.

In essence, he’s warning that it’s last call for this bull market. And President Donald Trump is officially the market’s party-pooper, he claimed.

For now, the bull market may continue to charge forward, but give it a few months, Reich warned. By then, all of Trump’s recent policy mandates will have had a chilling effect on stocks.

"Donald Trump is treating the world economy as a zero-sum game, the assumption being 'make America first, we win or they win,'" Reich told CNBC.

"He's talking down NATO, the European community. He's making it seem as if trade is really bad for the United States and therefore we are going to put up trade barriers," predicted Reich, Labor secretary under former President Bill Clinton.

The Dow traded above 20,000 for the first time on Wednesday, resuming a rally that began in the wake of Trump's surprise election victory.

The rally roared back to life after Trump signed numerous executive orders on Tuesday, including clearing the path for the construction of two oil pipelines to boost the energy industry. The S&P 500 and the Nasdaq Composite indexes also hit record intraday highs.

But Reich isn't convinced it will last.

"This is not the kind of talk that will inspire confidence in global markets," said Reich, a professor of public policy at the University of California, Berkeley. "And so I don't think this so-called rally, this Trump rally, is going to continue much longer," Reich said.

Reich did point out that Trump’s vow to boost infrastructure spending and create jobs by repairing and building numerous public projects should be beneficial to the American worker.

"I think a big infrastructure program not only is good for the economy and good for America in terms of all of the deferred maintenance on so many of our roads and bridges and tunnels and also public transit, but also would generate a lot of jobs and have a big multiplayer effect," Reich said.

"President Trump doesn't want to raise the minimum wage. He doesn't want to continue with President Obama's order with regard to ... the overtime threshold that the Labor Department has. He is anti-labor unions. Andrew Puzder ... is very anti-all of worker legislation of a lot of unions," Reich said.

"I don't think anything that Donald Trump is contemplating is going to improve wages," he added.

For his part, Trump has started his presidency with a tidal wave of executive orders, sweeping action and meetings.

For example, Trump has urged the chief executives of the Big Three U.S. automakers on Tuesday to build more cars in the country, pressing his pledge to bring jobs to America and discourage the car industry from investing in Mexico, Reuters reported.

Trump, who has threatened to impose 35 percent tariffs on imported vehicles, opened a White House meeting with General Motors CEO Mary Barra, Ford Motor CEO Mark Fields and Fiat Chrysler Automobiles NV CEO Sergio Marchionne saying he wants to see more auto plants in the United States.

In return, the new Republican president has vowed to cut regulations and taxes to make it more attractive for businesses to operate in the United States. He promised frequently during his election campaign to be a job-creating president and stressed that message in his inaugural speech last Friday, Reuters reported.

"We have a very big push on to have auto plants and other plants - many other plants," he told reporters at the start of the meeting. "It's happening. It’s happening big league," Trump said.

As his first few days in office prove, Trump will be a demanding leader who applies the best of his negotiating skills to push for U.S. growth, as bestselling author David Horowitz recently predicted to TheStreet.com.

Trump won’t be an ideological purist like Republicans who support free trade but don't fight for fair trade, Horowitz said.

“We've had an anti-business president now for eight years who doesn't take a hard-nosed attitude towards these deals. Trump is going to get better deals for us, which is still free trade.”

Horowitz's new book "The Big Agenda: President Trump's Plan to Save America," released just this week, reveals Trump's "first 100 days strategy" to roll back Obama's legislative and executive record.

Horowitz's new book is the first book about the Trump presidency and has soared to the top of the Amazon bestseller charts, becoming the No.1-selling book on the web.
Trump will also lead the way in making infrastructure spending to boost the U.S. economy, Horowitz said.

“If the economy grows as it will under Trump, there's going to be a lot more money to spend,” he said.

"Big Agenda: President Trump's Plan to Save America" is available at bookstores everywhere – or get your copy on Amazon – Click Here Now

(Newsmax wire services contributed to this report).

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StreetTalk
Former U.S. Labor Secretary Robert Reich warns savvy and observant investors not to overindulge in the celebration over the Dow Jones Industrial Average cracking the 20,000 milestone.
robert reich, donald trump, stock market, rally
861
2017-17-25
Wednesday, 25 January 2017 05:17 PM
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