Yale economics professor and Nobel prize winner Robert Shiller says he’s not a tough grader. But when it comes to US president Donald Trump’s first year in office, he told BBC World Service that he would give the former real estate tycoon a one or two out of 10 when it comes to economic policies.
“I do like his effort to help people who have lost their jobs,” Shiller said. However “it’s not very effective.”
Trump inherited an economy that had been growing since the Great Recession, and unemployment had been declining steadily for years during his predecessor’s administration. And while the stock market is booming, important considerations like trade balance and wage growth have barely budged, according to a Quartz analysis of key economic data.
Trump’s biggest achievement is a sweeping overhaul of the US tax code, which lowered rates for individuals and corporations, helping drive stock markets even higher. Trump has said the economy could expand even faster thanks to recent tax cuts, with growth of as much as 6%. Gross domestic product increased 3.2% in third quarter, according to the Bureau of Economic Analysis.
The problem with the tax cuts is they don’t address the budget deficit and are “heavily biased” toward people who have higher incomes, Shiller said. He thinks the ability of faster growth through tax cuts to reduce deficits is exaggerated.
Economists, meanwhile, say the US economy is already at or near full employment, meaning the highest level possible without sparking undue price and wage inflation. Getting it to perform even better would require things like technological progress to make the economy more productive, Shiller said.
To that end, policies should help boost scientific research and attract the most talented minds, which Shiller says is not what Trump has done so far. The travel ban on immigrants from predominantly Muslim countries has imperilled the livelihoods of many technology workers and researchers from those places. Nearly half of US universities recently reported a drop in international student applications.
Trade is another signature issue for Trump, and support for his presidency has highlighted that not everyone benefits from free trade and globalization. While the president has focused on that problem by pulling out of (and criticizing) trade agreements, Shiller suggested that other measures like wage insurance could be used to help workers who are harmed. He said the US should have policies to help these workers and hasn’t done enough for them.
But there’s at least one positive for Trump and the coal miners who voted for him—the number of jobs in that industry has ticked up recently. That could be because the Interior Department lifted a ban on new coal leasing on federal land last year. Shiller was skeptical such measures would have a sustained impact on workers in that industry, but admitted Trump at least has spirit.
“It’s a good sign that we have a president who is worried about them,” he said.