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critter1982's avatar

Donald Trumps view of our economic crisis?

Asked by critter1982 (4120points) September 30th, 2008

Donald Trump has come forward in saying that the best thing for our Congress to do, is to do nothing. He doesn’t feel that the government has any business in buying out these failing banks. His argument is that with the market dropping, oil prices will even fall faster (seen yesterday as barrels dropped to $98). With every industry highly effected by oil and with oil prices dropping faster than the market, companies will be able to reduce their costs therefore capable of reducing their prices which is necessary in a depreseed economy. If oil prices fall low enough companies will be able to still maintain similar if not the same margins that currently exist. This would keep companies return on equity and return on investment percentages close to what they already are therefore giving the market some faith into investing. This could still lead to a lot of people losing money until oil prices fall low enough, but if it is true everything would work itself out.

I’m not sure whether I agree with this or not but I believe it has some merit and should be discussed. What do you guys think?

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15 Answers

robmandu's avatar

Scott Adams (of Dilbert) has an interesting post today.

poofandmook's avatar

I don’t pretend to know anything about finance. This goes right along with my absolute ignorance of math and everything having to do with numbers. My brain just shuts down.

So to me, Donald Trump’s explanation seems to sound pretty feasible on paper. From Rob’s link, the idea of giving the people 700 billion seems a little off. Sounds like it would work about as well as that check Georgie sent all of us.

kevbo's avatar

The bailout is a giant con job. There will be consequences either way for taxpayers, but at least the dollar will have a better chance of surviving and we may still preserve a shred of influence with congress.

There are loads of Nobel Prize caliber economists who are saying the bailout is the wrong remedy. Others scratch their heads and say they can’t understand why we’re being asked to do this instead of a number of a number of other more appropriate remedies. This is because they can’t imagine or won’t come out and say that this is a gigantic heist.

Judi's avatar

what Nobel prize winning economists? I think the bill stinks too, but as far as I know (and I don’t claim to be an economist) it is the only thing that will save us from a depression. I would love to hear the ideas of Nobel prize winning economists with an alternative.

kevbo's avatar

@judi, I’ll back down a bit. I was on the iPhone, so I didn’t bother to check what I’d read, but it’s still close (three who have signed are Nobel laureates). Here’s the letter I was thinking of:

A Nobel economist and others are quoted in this article:

Another economist perspective:

Here’s my question. If the president and Paulson’s claim that omgtheskyisfallingvoteforthisbillrightnowandgiveusunprecedentedpowersorelse! isn’t really true then why would (and how dare!) they make those claims?

Lastly, if you can, listen to the SEC segment of the “Enforcers” episode of This American Life. To me, it’s further proof in this charade that money is protecting money at the expense of the average citizen.

As far as alternatives, one idea being floated in the bailout discussion is bailing out homeowners. This, as proposed, would have a “trickle up” effect of stabilizing mortgages and the housing market, which would stabilize the bank lending/credit situation and so on.

Judi's avatar

I don’t have the answers at all, but I am concerned how the way this was presented by Paulson and the President may have created the effect that we all feared. It’s like screaming “FIRE” in a crowded theater. With THIS president, it’s hard to know if he’s telling the truth or crying wolf.

Maverick's avatar

Donald Trump is a capitalist, not an economist. He also has a lot of money and would probably benefit greatly if the economy went in the shitter as that would probably present him with a number of buying opportunities for next to nothing. I don’t think he’s going to feel the pain of “Main Street” (sic).

critter1982's avatar

@maverick: Point well taken but let me throw this out.

In 1999 he presented a 14.25% tax on the net worth of the most wealthy American’s. In doing this, this one time tax would raise 5.7 trillion dollars which would have all but eliminated America’s national debt. Additionally he recommended using the savings for social security and also to slash taxes for the middle class. He would have paid $725 million to the government for the better of the middle class. Because of this I don’t always consider Trump as attempting to make a buck at the risk of the typical american.

gailcalled's avatar

So why doesn’t The Donald simply give several hundred million to families in need? Or go from door to door in his apartment complexes with a begging bag?

critter1982's avatar

@gail: My point was not to represent Trump as this wonderful guy who grossly cares about families in need. I just didn’t want people reading Maverick’s thread and saying yeah he probably does just care about himself. My question was not raised to discuss Mr. Trump’s ideology on philanthropy, but to rather discuss the economic implications of the proposed solution identified in the question.

gailcalled's avatar

I know, but I do wonder why the superrich don’t do some private grassroots philanthropy. And the economic implications are beyond my understanding. I look at my own behavior and I am clearly tightening my belt. If you multiply my mini-behavior by millions, I can see how depressions start. That’s not very helpful, I know. I am operating from a fixed income and that keeps me very conservative.

fireside's avatar

Wow, can you imagine what a horrible world it would be if Cheney had been President for the past year or two?

robmandu's avatar

Or Trump!

gailcalled's avatar

I thought that Cheney was president.

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