ATLANTA – Rajeev Dhawan, director of the Georgia State University Economic Forecasting Center, sees the economy cooling somewhat after a really good 2016, but with the exception of manufacturing jobs, job growth has been good this year and trends well into 2018.
Nearly 25 percent of all job growth in Georgia and metro Atlanta falls in what the forecast calls “premium” jobs – high-paying – but after a high in 2016 will be moderating through 2019. Georgia is on track to create 87,800 jobs in 2017.
But that will slip to 70,400 in 2018 and to 65,000 new jobs in 2019. Not surprisingly the lion’s share of job growth, around 75 percent, will occur in the greater Atlanta region.
Meanwhile, nationally, Dhawan compares Congress’ tax cuts with an opening gambit in chess. The gambit is the sacrifice of a piece (tax cuts) for a greater advantage later on.
Congress (at least the Republican majority) is banking on giving the middle class tax relief in the short run – thus cuts do expire unless renewed. Meanwhile big business and Wall Street can see $1.4 trillion in tax savings 10 years down the road.
Will the tax cuts create the capital to fuel the kind of GDP growth the United States has not seen since the Kennedy-Johnson era? The GOP majority says yes. But the trickle-down growth policies of Reaganomics in the 1980s never materialized.
Dhawan said he thinks in the end there will be tax cuts for the middle class in the first quarter of 2018 – it is an election year after all. But Congress – read the Senate – will have to back away from some or most of the corporate giveaways as its razor-thin majority cannot withstand more than two defections.
And given Alabama’s soap opera Senate election, that once golden Red State seat in the Senate up for election could be lost reducing its majority to one. With elections coming up, Senate Republicans may well decide it is better to live and fight another day for Wall Street.
“It will end up being a tax cut for the middle class,” Dhawan said.
Internationally, the picture is murkier. Speaking on that issue was guest speaker Stuart McIntosh, executive director of Group of 30, an international financial think tank comprised of senior banking, financial and academic figures.
He noted that history tells us when there is a global economy, there is economic stability in the world. That was evidenced by the Roman Empire as a time of relative economic and social stability. And when it fell, there were hundreds of years of economic chaos known as the Dark Ages.
With first Britain and then America leading what McIntosh called the globalization of a world economy there has been relatively stable and continuous economic growth.
What has given rise to concern is President Donald Trump’s “America First” trade policy which suggests America is retreating from leadership of the global economy which clouds the future a great deal.
As Trump disassociates the U.S. from trade and environmental agreements to renegotiate “better deals” for America, it creates a leadership vacuum for the rest of the world.
“If America steps out of the role of leading the world economy, there is a very short list of who could step in to assume that role,” McIntosh said.
He did not say China, but the list gets short indeed if it is taken away. McIntosh pointed out that upon the U.S. stepping out of the multi-lateral Asian trade treaties, it was China that has taken the lead role to negotiate pan Asian deals without the U.S.