What do election results portend for Wichita’s economy?

Now that the political upset of the century is over, how will Donald Trump’s administration affect Wichita?

To begin, I think it’s safe to assume that with Republican control of both congressional chambers, a Trump administration will be able implement the core domestic ideas he campaigned on: a substantial permanent tax cut; ramped-up infrastructure spending; a cutback on environmental regulations – starting with those on coal-fired electricity plants – and other, unspecified rules; repeal of the Dodd-Frank financial reform law, though it’s unclear whether any portion of it would be saved; repeal of Obamacare, though it’s unclear what its replacement, if any, would look like; building of the southern wall, which may be part fence; and some unwinding of past trade agreements.

In economic-speak, Trump is proposing a big Keynesian fiscal stimulus – though he might not call it that. That will increase employment, including jobs for many who are unskilled or those with rusty skills who have been out of the labor force for some time.

But this will add inflationary pressure to an economy where inflation has already been rising.

Accordingly, look for the Fed after the election to raise interest rates faster and higher than would have been the case with a Clinton win. Bond and mortgage rates already are up.

If you’re a saver or retired, this is good news, though stock prices over the long run might not fare well with higher rates.

There is one silver lining of higher rates: They give the Fed more room to ease in a future recession without resorting to “quantitative easing” – printing money for its own sake – which has been highly controversial.

A higher-pressure, higher-interest economy should keep us out of recession for some time, with one big caveat: whether Trump’s trade renegotiation strategy, if not pursued deftly, triggers a global trade war. That could push the U.S. and global economies into recession, or much slower growth, which would hurt our aviation industry.

If the trade measures provoke retaliation, aircraft suffers even more, and even Kansas agriculture could get hit.

A big uncertainty is what will replace Obamacare. The president-elect says he wants to keep the ban on insurers taking account of pre-existing conditions and the guarantee that children can be on their parents’ plans until age 26.

But how this can be done without penalizing customers for not buying insurance is a big open question. Allowing insurers to sell across state lines, though desirable, won’t solve the problem. As a result, consumers may have more choices for insurance, but many are likely to have even higher deductibles than now.

Lower-income Wichitans will suffer, and our emergency rooms are likely to be fuller, with more indigent care.

Even with D.C. dysfunction ended, Wichita’s fate is largely in its own hands, more precisely in the hands of current and new entrepreneurs and the companies they build.

Recently, The Eagle profiled highly successful SNT media, which is rapidly creating high-paying jobs for people with information technology skills.

Many of the start-ups and young companies showcasing themselves every week at 1 Million Cups are built around or rely heavily on skilled IT workers. Our schools, K-12 and colleges, must generate a lot more of these workers, or Wichita will be left behind in the 21st century.

This story was originally published November 16, 2016 at 4:29 PM with the headline "What do election results portend for Wichita’s economy?."