Trump Executive Orders: Bump or Jump?
The lofty titles of many of President Trump’s 17 Executive Orders read like a manifesto for dismantling decades of Progressivism: Restoring the Rule of Law, Federalism, and Economic Growth…; A Comprehensive Plan for Reorganizing the Executive Branch; Reducing Regulation and Controlling Regulatory Costs; Enforcing the Regulatory Reform Agenda; Minimizing the Economic Burden of the Patient Protection and Affordable Care Act…; Expediting Environmental Reviews and Approvals…; A Task Force on Crime Reduction….
Investors are right to recognize in these orders a promise of better money-making for everyone who wants to produce and trade according to the requirements of human flourishing – through voluntary consent to mutual advantage. But promise does not prudent portfolio strategy make. Flawed Progressive ideas like Keynesian economics and collectivist politics have crippled entire branches of human knowledge and creativity for over a century. To every opportunistic “winner” amid Washington’s 150,000 pages of byzantine and draconian tax and regulatory schemes, countless innocents have been forced to provide the winnings – diminishing the rule of law on which even opportunists and “Progressives” must ultimately depend.
So what do these orders mean, exactly? Consider the February 3rd order – Core Principles for Regulating the United States Financial System. Its text mandates “…economic growth and vibrant financial markets [by addressing] …failures, such as moral hazard….” Well, since 1934, the FDIC has promoted moral hazard by forcing prudent banks to fund insurance for reckless banks. Does this mean the FDIC will finally be wound down?
Reproducing the rights-respecting liberalism that engendered America’s stupendous, as yet unsurpassed prosperity of the Gilded Age and Roaring Twenties requires more than inspiring executive orders and vague promises “to address” moral hazard. It requires a clear grasp of proven principles like Hamiltonian Federalism and Saysian supply-side economics, and it requires the conviction to lead and consistently apply those principles. In government and business, principled execution trumps all.
In investing, market prices tell all. IFI’s disciplined, all price-based models integrate the combined intelligence of all buyers and sellers in the major asset classes and subclasses – including those with the latest knowledge of government policy changes affecting their particular prospects. Since 2000, our methodology has proven that markets can be reliably forecast in the 6 to 12 month horizon using changes in forward-looking price relationships alone.
To the degree that Mr. Trump executes true principles consistently and successfully, we’ll see progress and profits. Until then, today’s prices say yesterday’s destructive Progressivism is too far from remission; the recent market bump cannot yet become a jump.