Since I teach advanced economics, and my degree is in economics, I’d like to shed some light on the current market situation and proposed Infrastructure bill.
First the stock market. The president, no matter what party, has little long-term impact on stock prices.
The market was growing at a 20 percent rate for the last few years when GDP was only growing at 3 percent. That means the prices of stocks were very inflated and the 10 percent drop was just a natural, normal correction. Don’t panic. Fears of upward wage pressure and rising rates are overblown. The market could certainly come down another 10 percent, but that would be about bottom, and it would still be historically high over a five-year period.
Second, infrastructure. If the president was going into deficit spending to invest $1.5 trillion into infrastructure investment (think New Deal) and a “green” approach, then that would spur serious growth. One example of “green infrastructure” is a cost-effective, resilient approach to managing wet-weather impacts that provides many community benefits.
Instead, Trump proposes a plan that privatizes mostly public assets with huge opportunities for a few large corporations to take advantage of friendly, perhaps no-bid contracts. This would also hugely benefit big banks and lenders that would finance this borrowing. His deficit-funded bill would also hamstring states and municipalities with a huge bill. Imagine privatized toll roads, with profits going to a corporation and more expensive tap water and sewer charges.
If you enjoy paying more for basic necessities, then you’ll love the Trump plan.
Christopher J. Ognibene
Schenectady
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Categories: Letters to the Editor, Opinion
