by Calculated Risk on 11/20/2017 03:03:00 PM

Update: Here are five questions that people ask me all the time.
1. Are house prices in a bubble?
2. Is a recession imminent (within the next 12 months)?
3. Is the stock market a bubble?
4. Can investors use macro analysis?
5. Will Mr. Trump have a negative impact on the economy?

Three weeks ago I posted five economic questions I'm frequently asked. 

Since then I've discussed:
1) Are house prices in a new bubble?

2) Is a recession imminent (within the next 12 months)?

3) Is the stock market a bubble?

4) Can investors use macro analysis?

The final question I'm frequently asked: Will Mr. Trump have a negative impact on the economy?

First some good news. When Mr. Trump was elected, the cupboard was full. In November 2016, employment had been increasing solidly for several years (and the unemployment low and falling), wages had finally started picking up in 2015 and 2016, demographics were improving (the prime working age population was growing again), and the World economy was starting to pick up.

Luckily for Americans, and for Mr. Trump, there have been limited policy changes this year - and the economy has stayed the positive course.   For example, despite the campaign rhetoric, there has been no significant trade wars and no mass deportations.

Some infrastructure spending would be a positive, but the proposals from the Trump administration would have had minimal impact (and luckily they haven't gone anywhere).  As an aside, the best time for more infrastructure spending would have been in the years immediately following the financial crisis when the unemployment rate was still elevated - but unfortunately those efforts were blocked by Congress.

"Repeal and replace" would have had a negative impact on the economy, but luckily it failed.

The current tax proposals - mostly to cut taxes on high income earners and inherited wealth - might have some short term positive impact on the economy, but these proposals would be neutral or negative in the medium to long term.

There is a push to loosen financial regulations, and that would be a medium to long term negative, but not a concern for a few years.

The biggest concern is what Mr. Trump will do if something needs to be done (a crisis of some sort).   Mr. Trump is reckless, ignorant and irresponsible - and his response in a crisis is unpredictable.   But right now the best course for Americans would be if the Trump administration did nothing, and hopefully the expansion will stay on course.