Any number of things led to Trump’s capitulation of his shutdown of the US government. Good sense was not one of them, unfortunately. He continues to insist that money be allocated to build his great wall or great metal barrier to protect us from the invading hoards from Latin America. Economists had been warning that the damage is real and growing. Many economists believe that even with this short reprieve, the growth in our economy has been or will be squandered. Business and consumer confidence- already burdened by signs of slowing global growth, trade tensions with China and waning effects of the 2017 tax overhaul could suffer. Including the end of the standoff, the economy could slip from what appeared to be the strongest year of growth since the 2007 financial crisis into a stall, or worse.
Fear of immigration is poisoning Western politics. Trump owes his job to it. Brexit would not be happening without it. Strident nationalists wield power in Italy, Hungary, Poland and Austria, and have gained influence elsewhere. The West risks a backlash of the sort that ended the previous great age of mobility, before 1914. According to Gallup, 700m people—14% of the world’s adults—would like to move permanently to another country, usually a rich one. In sub-Saharan Africa the figure is 31%. The rich world clearly could not absorb so many newcomers at once. This is one reason why the politicians who complain loudest are winning elections. However, the economic benefits of allowing a steady flow are potentially gigantic. An unskilled Mexican who moves to America raises his wages by 150%; a Nigerian, by 1,000%. Therein lies the problem: the biggest benefits of moving accrue to the migrants themselves, while the power to admit them rests with voters in rich countries.
At Yale’s CEO Summit last week in New York City, though off the record, nearly 150 business leaders who were there: three out of four CEOS said they often apologized to their international business partners about the president and about his messages. Eighty-seven percent said Trump’s negotiation style had cost our nation the trust of its allies and three-quarters felt that he was not leading effectively on issues critical to US national security.