To be honest, it will be much tougher than everone knows. The United States is not that stronger anymore. So is Red China. So is Russia. But all of them try hard to tell the world who is the boss on the earth. I hope it will not be a disaster when Mr. Putin, Mr. Xu and Mr. Trump are all guys with self ego. They don't listen to what their people need. They don't care what their people want. It may be a combination we never imagine. All those guys have a lot of nuclear weapons. What a dangerous world we have!
This special edition will end before Jan 20, 2017. After that, we will wait and see what's going to happen when Trump's team get involved with real economy of the United States. Wish Mr. Trump could be a good president! (not unpresidented, but unprecedented...).
(1) Reappoint J. Yellen as chairwoman in 2018 or keep it undecided. Wait and see until the time in 2018 comes
To keep the Fed in stable is a must-be action when Fed still holds around five trillion US government debts in the balance sheet. It is not proper to threaten Mrs. Chairwoman to leave. It is impolite for a president to to act something like that. Mr. Bernanke has stayed for a second term even he is a Republican. Mr. Trump should wait and see what the Fed could do for his fiscal policy, then decide what's next in 2018. The independence of Fed should be respected. The Fed does good than harm to the United States. Everyone knows that Mrs. Yellen emphasizes employment than growth for the United States. It is good for a society in which people are so hard to find a decent life.
(2)Be careful the tax cut, it should have some plan and incentive action in the first place
From the experience in 2004, as Mr. Gross mentioned lately, the Bush's tax cut only let US big corporations buyback their shares from the market or pay even higher dividends. If Mr. Trump's team wants some industries to have further development in the United States, then the US government should bring some incentive to big US corporations. It may help American people have jobs in the industry. Help US big corporation to repatriate the money from oversea and use it for further industry development is not an easy job.
(3)Keep environmental friendly programs in mind
Earth is getting warmer. This winter is the hottest season we ever know. Please acknowledge the global warming and try something new to help cooling the motherland.
(4)Modify Dodd-Frank Act, not abolish
Follow the rule of antitrust to brak big financial corporation into several parts may be an option to consider. It may create some competition and bring some new jobs to American people. But it may also bring some fighting and arguing that the action may let US financial institutions could not compete with Chinese, Japanese or other European financial institutions. Making the Dodd-Frank Act on some trading system to be more friendly to traders is a must-be, but to abolish the Dodd-Frank Act is inappropriate. Make the trading system to accomodate or attract a lot of traders to join in could make the system create more jobs for people to live upon.
(5) Make a well-thoughtful plan before it gets done
Mr. Trump is the most people with no experience on governance. He should know the truth better. It is better to have a team for those plans he want to do. It is better to make a well-thoughtful plan before get done. Mr. Trump is naive about a lot of things. The world is not as used to be. Mr. Trump should know it better.
(6) A new ecosystem without Red China
It is the only way to regain the restrain for Red China to have a new ecosystem without Red China. The United States has to come out with some ways to keep spillover effect to Red China if Mr. Trump determines to cut tax rate and brings a larger deficit from his fiscal policy. Red China may get the benefit most because it is an economy second to the United States. The plan of Mr. Trump may save a near-collasping Red China and bring more harm than good to the United States unless the Trump team knows better how to keep the spillover effect as lower as possible.
(7)Keep an eye on strong US dollar and higher yield of US Treasuries, the United States should not have both
The United States should not have both, one is a strong US dollar and the other is a higher yield of US Treasuries. A weaker US dollar could accompany with higher yield of US Treasuries. People in the United States may hate to see a strong US dollar with lower yield of US Treasuries. There are two situations we should see pr expect, but not the situation we see today that a strong US dollar with much higher yield of US Treasuries lately. The last one is the worst situation we could expect.
(8)A new way to help public education system of the United States, from the state's point of view
Each state in the United States takes care their own fundamental education systems, including recruiting and funding. Education is the most important thing for students before they go to the university or college. Federal government should start a funding program to help states resolve problems when facing short of cash for the public school education support. To be honest, even for the higher education such as state-supported universities, we all know a serious situation people face today. Those state universities are short of fund to have enough lectures. They have had a 200 people lecture for chmistry 101 or other basic lectures. It just shows how vulnerable the United States could be. Public education system gets its trouble for many years already.
As people knows, the same issue applies on many pension systems of each state in the United States. Overpormised pension reward brings down the pension system and makes it insolvent. Pension system becomes an even bigger problem if the ecnomy can't have a decent growth. Pension system should renegotiate with pensioners to change the promised payment lower if necessary.
(9)A deeply understanding for the value chain of global manufacturing
Trump's team has to figure out the valuable parts of many supply chains for manufacturing goods. There are 40 percents components for car assembled in Mexico are made in the United States. In that story, the most valuable parts are made by American people. If Mr. Trump suddenly increases the tax on the imported car from Mexico, then we would expect the bankruptcy of some American companies. Mr. Trump should know better the role of American corporation plays in the supply chain of cars and other manufacturing final goods. If a lot of valuable parts are made in the USA, we should know that the United States gets no benefit from the tax increase on that kind of final goods importing.