The answer, I guess, all depends on what one thinks is broken.
- Is it over regulation?
- Is it inefficient?
- Is there too much debt?
My guess is the answer is no, he will not “fix” the government, just change it. It will be interesting to see if that change is for the overall good of the country.
Lets look at regulation.
Some obvious areas for de-regulation (the GOP are generally in favor of less regulation) are in finance and energy sectors. A lot has been written about how de-regulation will benefit businesses by lowering costs, reducing the need for red tape and making them more efficient – and ultimately more profitable.
The theory here is that as a business grows and becomes more profitable, more jobs will be created. And this can be true to a certain extent.
However, with a lot of industries, one of the biggest drivers in business is not de-regulation but rather, innovation and automation. As a result, many people see automation as a job killer rather than a job creator.
Recently, Amazon introduced a new concept store with no checkout lines or cashiers. There were immediate cries of “job killer” from certain camps. And to an extent, they may be right. If we automate the checkout line process, there will certainly be less people working as cashiers.
Amazon has also launched the first drone delivery of a shipment.
Tesla is automating the way we drive.
Can you imagine a world with no cashiers, deliver personnel or taxi drivers?
Technology and innovation has always disrupted not only the way we do business but the way we live our lives. This is nothing new. What is new is that this “go” store by Amazon, drone deliveries and self-driving cars could usher in a new wave of government regulations. Not just regulations about the technology and safety, but also about the number of jobs, or types of jobs that could be replaced. We have “quotas” or “goals” for employment diversity, why not include AI and automation?
Just when we are repealing certain regulations, we will probably be creating more – different ones. The regulatory environment isn’t going to shrink, it’s going to change.
How about efficiency?
This is actually an area that Trump just might be able to make a difference. Recent studies have indicated that not only is there waste in cost of goods within the federal government but also within job functions. For now, Trump has focused his tweets on big government contractors like Boeing and Lockheed Martin. In fact, these tweets just might provide short term volatility and opportunity for investors.
A professor of mine once said “The government never shrinks”.
Will government employees be at risk for losing their jobs if their roles are deemed redundant?
But for anybody whoever has been a manager within the federal government, one thing they know is how difficult it is to actually “fire” somebody. The system is built to safeguard the employee. Now don’t get me wrong, it is possible, just not as easy as it is on TV. Trump and company would have to completely re-write government policy, union contracts, and change the entire “culture” of the federal government.
It has taken years for things to get to where they are now, decades even. Even under the best circumstances, it will take decades to fix.
For now, I see any “change” in efficiency and cost savings limited to financial obligations and the total cost of contracts of service to contractors. Again, this only happens with new proposals and contract renewals. So even this process that inherently has a short half-life, will take years to make any truly appreciable difference.
So where will the short term saving come from?
Most likely from creative accounting practices and kicking the can down the road. Note: not always the best long term policy. And, I’m sure strangely familiar to folks who have been paying attention the past eight years – or even decades.
After all, one needs some quick wins to look good in the eyes of the public.
Debt, Inflation and Jobs.
We have already seen some “quick wins” by the Trump administration. And they aren’t even in office yet.
We just had an election which had as one of it’s focus point, jobs. Specifically the loss of jobs in the middle class. Now much of the reasons and blame for the loss of these jobs was off-shore policies by American business. President-elect Trump has vowed to preserve jobs by basically taxing or punishing those who participate in this activity. And by making foreign goods more expensive than locally produced goods.
Recently Carrier, IMHO, basically bribed hundreds of thousands of dollars out of the state and federal government to “keep” jobs from going to Mexico. Hind-sight has found that many of these jobs are already there and that the ones being “saved” are eventually going to be replaced by robotics and automation.
But Carrier isn’t the enemy that they have been made out to be. In fact, they have one of the most comprehensive and progressive re-education programs today, not only for their current employees, but also for those who happen to be let go and is included in every compensation package. Carrier realizes that people need to be re-educated and learn new skillsets to survive in today’s changing economy and landscape – not government subsidies.
Again, IMHO, the Trump administration, state and local governments, basically throw good money after bad. They are basically saving obsolete jobs with tax payer money.
Instead of providing long term solutions, the Trump administration has set a precedent to go for the quick win instead of re-tooling and re-educating the workforce in a changing environment.
The real fear that folks have with the soon to be new administration though, is not with these quick wins, but with their potential long term plans for international trade agreements, tariffs building infrastructure and modifying the tax codes. All of which would be designed to punish those who ship jobs and production overseas and reward those who keep the jobs here along with adding to the national debt.
No, I’m not convinced that Mr. Trump and company will fix government. I am convinced however, that they are certainly going to change it.
And along with change, there is opportunity.
You just have to educate yourself and know where to look for it.