Comment on the US presidential election by Prof. Dennis J. Snower, President of the Kiel Institute for the World Economy (IfW) and US citizen.
“In an era of increasing global insecurity, the election of Donald Trump is another major destabilizing event. Trump is undoubtedly one of the most unusual and colorful individuals to ever win public office in America. His victory is a democratic decision of the American people and must be accepted as such. Many of Trump’s statements during the election campaign challenged fundamental principles of global governance, free trade, and an open society. The exciting question now is how many of these statements will he be willing and able to translate into actual policy.
With regard to economics in particular, Trump has taken the long outmoded concept of international trade barriers and sold it as a new idea for boosting prosperity in America. In fact, the result will be the exact opposite if Trump succeeds in imposing tariffs, paying unaffordable subsidies, and creating a walled-off internal market. America will become poorer, and global wealth will decline due to reduced trade.
Free trade is essential for America’s prosperity—even under Donald Trump. Globalization has dramatically increased prosperity around the world and done much to alleviate poverty. What is required now is a more equitable distribution of that increased wealth and more equal opportunities for all.
One of the key challenges for Trump is to adopt more active labor market policies that will help fulfill the promises he made in his campaign to the disaffected sections of American society. It needs to be easier for the unemployed to find their own way back into work than it is at present. This is particularly urgent because the digital revolution and smart machines are set to destroy many unskilled jobs. Trump should therefore use all the levers of government to promote lifelong learning—from initial training through upskilling to ongoing professional development. Failure to do so will consign an increasing number of people to helplessness, which will only lead to more anger. This resentment propelled Trump to success. Now, people expect him to deliver on his promises.
Hillary Clinton and Donald Trump had the lowest favorability ratings of all the candidates to have sought the world’s most powerful office in recent decades. Trump must now prove that he is capable of doing more than merely polarizing opinion and stirring up anger against the establishment.”