How the presidential election will affect growth and prosperity was the focus of Robert Genetski's economic forecast Thursday in Palatine.
The nationally known economist told a crowd of about 300 business leaders at his annual presentation that every October, we have "doom and gloom." The Ebola crisis and ISIS arose in past years, and "this month we've got a lot of doom and gloom over the election," he said at the 13th annual economic breakfast sponsored by Cornerstone National Bank & Trust Company.
The Saugatuck, Michigan-based expert, known for his classical economic principles, believes there is more negativity going into this election than usual. Genetski, who blames the Federal Reserve for our most recent financial crisis, outlined what each candidate would do for the economy if elected. "It's the policies that are put into place" that will affect the economy, said Genetski, who is finishing his latest book titled, "Rich Nation, Poor Nation."
He believes if Hillary Clinton is elected, her policies would include an increase in government spending, higher taxes for business and the rich and more government regulations. Genetski believes this would mean slow growth, low interest rates and higher inflation.
The economist said Donald Trump believes in many of the same policies as former President Ronald Reagan, including less government spending except in the case of national defense; lower taxes and fewer regulations. He said Trump believes in removing many of the restrictions on free markets, particularly in health care, with the exception of trade barriers and tariffs. The idea of putting taxes on trade is one area that Genetski does not agree with Trump.
"The idea that Canada and Mexico are somehow stealing our jobs is simply wrong," he said.
He believes these implications would lead to higher living standards, faster growth, higher interest rates initially and less pressure on the money supply.
"There are risks associated with each of these candidates," Genetski said.
He expects the stock market will increase about 10 percent next year under either president.
Genetski suggested business leaders be optimistic, regardless of who is elected president and how bleak the circumstances might appear to be. "We should be optimistic because there are always going to be challenges to businesses. We should be optimistic that we have the tools to protect our business and protect our financial assets under whatever circumstances start to arise."
Participants at the breakfast meeting said the forecast was engaging and interesting. "It opened up the eyes to what is common sense," said North Barrington attorney Helmut E. Gerlach. "In my opinion, the free market will always prevail."
Pat Horne of Arlington Heights said Genetski seemed a "little more middle of the road than usual. And he was a little more positive on Trump than I thought."