CHICAGO -- Alec Baldwin has nothing to worry about in David Nelson. The actor’s Donald Trump impression is in no danger of being upstaged by the economist’s attempt to channel the president’s hyperbole and outsized mannerisms and ego.
David Nelson, professor of economics at Western Washington University and founder and CEO of Finance & Resource Management Consultants Inc., Bellingham, Wash., took to the stage at the 2017 NACS State of the Industry (SOI) Summit with a red baseball cap and a truckload of “Trumpisms” that he brought back down to earth with this message: “America is becoming great again.”
“A new president is potentially a game changer,” said Nelson, who discussed how this “improbable event,” the election of Donald Trump, came about and what the implications are for the U.S. economy and the convenience-store industry.
With Trump’s victory, the Dow Jones Industrial Average saw its fastest-ever 2,000-point gain. Republicans’ economic confidence soared, as did that of mostly Republican-leaning small-business owners, Nelson said.
Going into the election, many Americans felt like the economic and political system in the United States was “stacked against people like them,” said Nelson. “The election gave new hope to at least a group of voters that previously felt that they weren’t part of the economy and nobody was really looking out for their interests.”
Their expectations are still high, he said, even as the political reality of what Trump might and might not be able accomplish begins to sink in. And despite these sentiments, Trump’s disapproval rating is very high, with 48% disapproving of his performance as of February, well below the rating of any other president in the last 50 years this early in his administration.
So, Nelson asked, will Donald Trump be able to “drain the swamp,” or “is Washington, D.C., a protected wetland?”
The Trump Agenda
Having set that political table, Nelson offered six items on the president’s agenda. Here are the highlights of Nelson’s take on each:
1. Defense of borders
The U.S.-Mexico border is 1,989 miles long, with 1,000 miles requiring a wall, as Trump has called for.
“If this comes about, it is a substantial construction project for this part of the country, and we know that construction workers are among the best customers in the convenience-store industry,” said Nelson.
2. Immigration reform
“If we were to close our doors to immigrants, we would find that over the next 20 years, our working-age population would go from 173 million down to 166 million,” Nelson said.
“Our country is richer and stronger because of immigration,” he said. “A measured flow of immigration can help our demographics, it can help our rate of economic growth, and I think it’s good for [the c-store] industry in terms of an enhanced customer base and enhanced employment pools. Immigration can keep the working-age population in the U.S. from falling.”
3. Infrastructure building
“Trump has championed his experience as a real-estate developer and a person who can get things done,” said Nelson. “We have paid for and are now eight years into this economic recovery, and there’s not a lot of slack left in the economy. Is this the time to embark on a massive, public infrastructure project, or is it a little bit late in the business cycle?”
“One of the things that got a lot of people in the business community excited about Donald Trump being elected president was his promise to roll back regulations,” Nelson said, praising an executive order to cut two regulations for every one added.
“Americans over time have become increasingly convinced that there’s too much government regulation,” he said. “People can see the connection between government regulation and an inability to get things done, and an increased cost that has to be borne by people that are providing goods and services that we can consume.”
5. Desire for fair trade
Trump has promised to bring back jobs lost to China, Mexico and other places; however, 88% of the jobs lost in U.S. manufacturing from 2000 through 2010 was the result of technological change, not offshoring or trade. And the economy has become much more integrated on a global basis, said Nelson. Countries open to trade have grown faster over time.
6. Tax cuts
The United States has the highest corporate income tax in the developed world at 35%. France is the next highest at 34.4%, while Ireland has the lowest at 12.5%.
Nelson said lowering the corporate income-tax rate would let businesses keep more income, making them more competitive; repatriate offshore earnings; mitigate double taxation; attract foreign businesses; and eliminate the reason for inversions.
Meanwhile, unemployment is slowly falling. Job growth has been “phenomenal,” he said. “We need about 50,000 to 100,000 a month just to keep up with the growth in the population and labor force. Over the last three months, we have averaged over 200,000 jobs added per month. … These people are great customers in your industry. This is a very bullish sign for the convenience-store industry.”
Also, average hourly earnings are up 2.8% over the last 12 months through February.
“People are shopping your stores because they have more real income to spend,” said Nelson.