Will Trump be a disaster, as everyone says?

He could be the best president, he could be the worst president, depending on whether his policies work, whether he has the courage to push all his policies through, and on how much opposition he gets from his own party, the Republicans, in Congress. Donald Trump will be sworn in as the 45th President of the US today and many of the senior positions in his cabinet are as inexperienced in government as he is. The Republicans have a majority of 241-194 in the House of Representatives and a 52-48 majority in the Senate. This should make it easy for him to get his legislation passed by the Congress but the problem is that many in his party hate him, whether for personal reasons or because his policies will hurt their campaign contributors we do not know. While building a wall on the border with Mexico will not affect us in India Trump's views on H1B visas will affect our IT firms directly. Some of the larger companies are already hiring Americans to serve customers in the US. Will it be such a bad thing? It might reduce the number of Indians working as cyber coolies but, Americans being better trained, may help these companies move up the value chain and a stronger dollar may increase profits. However, Trump's views on trade have caused the greatest heartburn. Trump has promised to renegotiate the North American Free Trade Agreement, or Nafta, which has angered Prof Ricardo Hausmann, who argued that productivity gains from Nafta created 333,000 jobs in the US. During campaigning Trump proposed a 45% tax on goods imported from China. Experts are almost unanimous that it will cause a great deal of harm to the US because China will immediately impose tariffs on US goods and inflation in the US will rise. Speaking at the World Economic Forum annual jamboree at Davos, China's President, Xi Jinping warned of the dangers of protectionism. The irony of a brutal communist dictator, lecturing a roomful of rampant capitalists about free trade, is delicious. But is Trump such a lunatic as every expert is making him out to be? Levying a duty on Chinese imports will surely increase inflation rate but that is what the Federal Reserve has been trying to do since 2008, with near zero interest rate at first and then quantitative easing. A strong dollar will reduce some of the cost. If the Chinese economy slows down commodities will become cheaper, but energy costs for the US will be kept under control by shale oil and a strong dollar. Ruchir Sharma writes that economic growth is directly linked to population growth, so a strong growth in the US is impossible because of falling fertility rate. Maybe not. Future manufacturing is going to be highly automated and US companies are loaded with cash. Low running costs, along with cheap energy and no taxes on exports could be a real stimulus. As for India, our choices are simple, but stark. With a huge and exploding population there is no land. Maybe Trump will show the way.