Half a dozen years after the economic crisis the American economy is strong and poised to see continued growth as millennials enter the workforce and form households, CNBC commentator Ron Insana told several thousand REALTORS® at the Legislative Conference & Trade Expo in Washington on Tuesday.
Economic strength is likely to survive even if the administration of Donald Trump is engulfed in crises related to investigations into his campaign’s Russia ties, conflicts of interest, or even over his carrying out his oath of office, a question that’s being raised over his recent handling of sensitive intelligence.
What such a crisis would likely do is delay congressional action on the pro-business agenda Trump brought into office, Insane said. Priorities such as tax reform and health insurance reform would unlikely get through Congress before 2018 even though Congress and the White House entered the year with hopes of getting those passed quickly.
Insana said the United States came out of the economic crisis in better shape than other advanced economies and today stands in a strong position in part because of the energy independence it achieved through fracking and increased natural gas production—what Insana calls a key step toward a Fortress America doctrine of economic independence. The country also continues to grow important high-tech industries that will transform how the economy works for millennials, the largest generational cohort in the country’s history.
“No one’s ever made a profit betting against the American economy,” he said.
Against this positive economic backdrop, millennials will increase their rate of household formation, the first step toward entering the homeownership market in large numbers. That, along with continued lag in housing inventories driven in part by shortages of constriction labor, will keep upward pressure on housing prices, exacerbating affordability problems. Already some housing sectors—most notably high-end rentals in big metropolitan areas like New York City—are showing signs of bubble conditions, he believes.
If Trump is removed from office before his four-year term and Vice President Mike Pence assumes the presidency—a distinct possibility, Insana said, because of mounting constitutional concerns in Congress—Republicans’ pro-business agenda could see new momentum. Action could be taken on tax reform, health reform, and infrastructure investment. But if the crises help Democrats take the House as well as the Senate in 2018, the new dynamic would imperil that agenda.
The conference runs through Saturday, May 20. Almost 9,000 REALTORS® and others are in Washington to attend sessions and meet with their members of Congress to talk about tax reform, flood insurance reauthorization and reform, secondary mortgage market reform, and other priority legislative issues of real estate professionals.
Insana photo: WalkingGeek (Creative Commons)