How will Utah’s economy fare under a Trump administration? No one knows for sure, but key Utah leaders from different economic sectors are cautiously optimistic – with some reservations.
Part of the optimism stems from the reality that Utah’s economy is already doing very well, so the good times should continue unless the Trump administration makes drastic mistakes.
The discussion, moderated by Pat Jones, CEO of the Women’s Leadership Institute, was part of World Trade Center Utah’s Thought Leader Symposium featuring panelists who discussed how Utah’s economy, including tax policy, international business, energy, and healthcare, might change over the next four years.
The event was hosted by World Trade Center Utah and Zions Bank in partnership with the Governor’s Office of Economic Development. Panelists included:
Derek B. Miller, President & CEO, World Trade Center Utah
Natalie Gochnour, Director, Kem C. Gardner Policy Institute
Robert Spendlove, Economic and Public Policy Officer, Zions Bank
Dr. Laura Nelson, Executive Director, Governor’s Office of Energy Development
Rich McKeown, CEO of Leavitt Partners, a healthcare consultancy
Spendlove noted that with Trump promising to cut taxes, reduce business regulation, develop energy and boost infrastructure spending, the stock market is responding very well and the business sector is mostly hopeful.
The biggest concerns expressed by the panelists related to trade protectionism and the general uncertainty of a Trump administration. Given Trump’s unpredictability, no one really knows what will happen.
Miller said Utah gets an A right now for its booming international trade but could sink to a B or C if Trump imposes tariffs and cancels trade agreements. “Utah can compete in a free market,” he said. “We don’t need protectionism. Markets work best when allowed to work.”
Another cautionary note was sounded by Gochnour, who said Trump’s massive tax cuts and infrastructure spending would likely be financed by borrowing huge amounts of money. She asked if it makes sense to borrow money and then give it back to taxpayers. Great amounts of borrowed money infused into the economy could cause overheating, greater deficits, higher interest rates, and higher inflation. She said the stimulus could cause a boom for a few years, but she worries about what might happen after that.
McKeown was generally optimistic about healthcare reform, even though it will be very difficult to dismantle Obamacare and replace it with something better. The Affordable Care Act has many good features, he said, but certainly needs improvement. The Republicans will now “own” health care, and will be under immense pressure to produce a good product. With complete control of the federal government, the biggest danger for Republicans will be to overreach and raise expectations higher than they can deliver.
McKeown said Utah is doing particularly well with healthcare, with relatively low costs, good outcomes, and a lot of innovation. The healthcare industry will be forced to become more innovative and drive costs down, he said, as entitlement reform occurs and reimbursement rates decline.
Nelson said Utah’s energy sector could move from an A to an A+ under Trump if he keeps his pledge to develop all forms of energy and make the nation energy-independent. Without energy, there is no economy, she said, expressing confidence that an all-of-the-above energy policy can be a win/win for both energy and the environment.
She is hopeful the new administration will reduce energy regulation and allow states to pursue their own policies. Utah will improve air quality and reduce carbon emissions, while developing its energy, without federal one-size-fits-all regulations, Nelson said.
Gochnour and McKeown said it would be hard for the new administration to push aggressive reforms through the bureaucracy. While some 4,000 political appointed slots are available, there are tens of thousands of career staffers who can delay and stifle dramatic changes.
Nelson said she’s confident that if gridlock continues at the federal level, the states will go forward and fill the void. For example, she said, Utah is collaborating with other states to create an electric vehicle charging network across several states.
Spendlove said he is hopeful Trump and Congress will reduce regulation on the financial sector by reworking the Dodd-Frank law and by eliminating or reforming the Consumer Finance Protection Bureau, which is unaccountable to Congress and to voters. Some 2,000 small community banks have been lost since Dodd-Frank was enacted and access to capital has been restrained, he said.
Most panelists agreed that Trump’s negative comments against major American companies like Carrier and Boeing are damaging and should have been handled differently.