By Paul Feinberg
The December 2016 UCLA Anderson Forecast conference focused on the ramifications of a Donald Trump presidency on the nation’s economy, as well as on those of California and Los Angeles. The event began with the presentation of three forecasts, with key takeaways for the specific regions.
A roundtable panel of UCLA experts continued the discussion, which was moderated by UCLA Anderson Forecast Senior Economist Jerry Nickelsburg and included Professor Sebastian Edwards, UCLA Anderson’s Henry Ford II Chair in International Management; Professor Gerald F. Kominski of the Department of Health Policy and Management at UCLA Fielding School of Public Health, who is also director of the UCLA Center for Health Policy Research; UCLA Anderson Forecast Senior Economist David Shulman; Professor Jeffrey B. Lewis, who is the UCLA department chair of political science; and Professor Kal Raustiala of the UCLA School of Law, who is also director of the UCLA Ronald W. Burkle Center for International Relations.
Touching on the President-elect’s recent phone call with the leader of Taiwan, Raustiala noted that Trump had often been critical of China during the presidential campaign, and called the phone conversation an “important deviation from U.S. policy and practice.”
“Trump’s inexperience with foreign policy is a concern,” the professor said. “In the field of international affairs, words and rhetoric actually matter.”
Edwards said that the U.S. dollar has soared in recent weeks and is now 30 percent stronger on average than it was a year ago. Noting that the Mexican peso is much weaker against the dollar than the Chinese currency, the yuan, he predicted that Mexico might attract more U.S. business in the coming years.
Edwards also pointed out that despite saying “terrible things” about the Federal Reserve Board during the campaign, Trump is likely to be in a position to make at least two appointments to the board during his presidency. How his rhetoric manifests as policy, Edwards noted, remains to be seen.
Lewis discussed issues specific to the political makeup of the incoming U.S. Senate and House of Representatives. His research, which meticulously tracks roll call votes, shows that the Congress is more deeply polarized now than ever, with liberals more liberal and conservatives more conservative. He predicted that the new Congress, with Republican majorities in both chambers, will easily approve tax cuts, while spending on infrastructure will be more difficult to pass. Lewis also pointed out that “trade isn’t as strongly attached to ideology as you would imagine. The right wing is not as against protectionism as you would imagine.”
An expert on the Affordable Care Act, Kominski spoke about the likely effects of Trump’s presidency on health care in the U.S. He pointed out that 20 million more Americans have health insurance now than before the ACA became law. “The program is an overwhelming success with regard to its primary goal,” he said.
Kominski said he expects the new president, in conjunction with the Republican Congress, to use a “repeal and delay” strategy with regard to the law. In other words, Congress will repeal the Affordable Care Act, making that effective perhaps two years later, then spend that time coming up with an alternative. The question, Kominski asked, is what the replacement plan will look like.
Shulman, who spent much of his career working with Wall Street firms, said he expects a more relaxed regulatory environment when the new administration takes office. Shulman, who said he believes that the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in 2010, was something of an overreaction to the excesses that led to the most recent recession. He predicted that the legislation may be partially repealed and that, he said, is likely to lead to economic growth.