President-elect Donald Trump continues to promote his economic growth agenda, standing by his campaign promises of slashing the corporate tax rate and decreasing regulations. Last week, Trump announced that he had struck a deal with Indiana-based Carrier Corp., saving 1,000 jobs from being exported to Mexico.
Trump may have mastered the art of the deal when it came to saving jobs at Carrier, but how will his business-like approach affect the U.S. economic system?
In an interview on the FOX Business Network’s Countdown to the Closing Bell, Harvard Economics Professor Greg Mankiw said the President-elect shouldn’t be meddling in the affairs of corporate America, and his decision to do so may not be beneficial for the economy in the long run.
“There’s a big difference between being a CEO of a company and being President of the United States. A CEO is basically a central planner for that company. The President of the United States is not the central planner for the U.S. economy,” Mankiw said.
The former chairman of the Council of Economic Advisors under Bush 43 said it is highly unlikely that a president alone would be able to make the best decisions on behalf of the businesses and workers that keep the economy going.
“We fundamentally believe in a market economy, that is decentralized decision making, not decision making centralized in one person, the President of the United States,” he said.
Although Trump’s ambitious efforts to save every job in the U.S. will benefit a subset of workers, Mankiw said allowing the free market to make these decisions is the best way of promoting economic growth.
“I think a lot of his [Trump] economic advisors people like Larry Kudlow and Steve Moore are believers in that principle and my guess is behind the scenes, they are not so enthusiastic about the some of this micromanaging,” Mankiw said.