Low-wage Americans will suffer most under Trump, warns Bill Gross

Posted on November 16, 2016

Donald’s Trump’s arrival in the White House will hit the low-earning and jobless Americans who voted the Republican into office, Janus Capital’s Bill Gross has said, revealing that he did not vote for either Republican or Democratic nominee in the US presidential election.

In his latest investment outlook, Mr Gross poured cold water on the notion that Mr Trump’s economic policies would revive growth and jobs for the poorest Americans, arguing his pledges to cut taxes and increase defence spending were an extension of “Wall Street versus Main Street” economic policies.

“I write in amazed, almost amused bewilderment at what American voters have done to themselves” said Mr Gross.

“[Trump’s] policies of greater defense and infrastructure spending combined with lower corporate taxes to invigorate the private sector continue to favor capital versus labor, markets versus wages, and is a continuation of the status quo”, he added.

Predicting Mr Trump would spend a “short” but damaging four years in office, the fund manager warned an ageing global population meant populism would continue to be “on the march” around the world:

It is demographically baked in the cake. Unless the worker’s share of GDP reverses its downward trend, and capital’s share peaks, then populists worldwide will reject establishment parties in almost every future election – initiating in some cases growth-negative policies revolving around trade, immigration, and yes, in Trump’s case, lower taxation that may lower GDP growth, not raise it.

Instead, Mr Gross said he favoured a classic Keynesian job-creation programme to revive growth and defang populist movements.

“Let’s supplement welfare with a patriotic ”Help America jobs program’”, said Mr Gross who revealed he did not vote for “either establishment party’s candidate”.

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