Tags: robert shiller | trump revolution | davos

Yale's Shiller: 'Trump Revolution Troublesome to Me'

Yale's Shiller: 'Trump Revolution Troublesome to Me'
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By    |   Wednesday, 17 January 2018 09:38 AM

Nobel Prize-winning economist Robert Shiller reportedly claims President Donald Trump is synonymous with a "revolution" taking place in U.S. politics and society, but not in a good way.

The Yale University economics professor told CNBC he was concerned about the changes in society and politics heralded by the president.

"Trump is a revolution unfortunately, (and one) who's reaffirming nationalism and he's showing that Americans are no better than anyone else," Shiller told CNBC ahead of the World Economic Forum (WEF) in Davos, Switzerland.

"It's troublesome to me. I'm concerned," said Shiller, who was awarded the Nobel Prize in Economic Sciences with Eugene Fama and Lars Peter Hansen in 2013.

"So far we've gotten through a year of him and we're optimistic that Congress will switch to a Democratic majority in another year so he might be defanged," said Shiller, who also helped develop the widely-followed S&P/Case-Shiller Home Price Indices.

Trump is due to give a speech on the closing day of the WEF, an annual event in the Swiss Alps which runs from Jan. 23-26 and will attract 70 heads of state and government, as well as celebrities, CEOs and top bankers.

Last year, the annual elite gathering of world leaders and chief executives held in the Swiss alps focused on what impact the newly elected Republican president would have on the global economy.

This year, Trump will discuss his “America First” agenda in person, said White House Press Secretary Sarah Sanders.

“At this year’s World Economic Forum, the president looks forward to promoting his policies to strengthen American businesses, American industries, and American workers,” Sanders said in a statement.

The theme of this year’s Davos conference is to examine the causes of and solutions for political, economic and social fractures in society.

Shiller said Trump's reception by the Davos audience is going to be interesting to see, CNBC.com reported.

"He's coming to Davos this year and he's going to try out his rhetoric on the least sympathetic audience I can imagine. He likes sympathetic audiences so I don't know how he's going to manage this one," said Shiller, who developed the cyclically adjusted price-earnings (CAPE) ratio market valuation measure, which is calculated using price divided by the index's average historical 10-year earnings, adjusted for inflation.

Shiller said last year’s WEF was eye-opening for him. Last year’s theme – "creative a shared future in a fractured world" – reflected the problems facing the world, namely what he saw as "the problems of the international growth of populism and nationalism, racism and religionism that is quite striking right now," Shiller said.

"Those fractures are re-assertions of traditional fractures and so it's like we're back to history again. We were in a period of enlightenment following the horrors of World War II and now the people who remembered that are disappearing so we're going to go back and make the same mistakes," he said.

Shiller spoke just as a WEF survey warned that the risk of political and economic confrontations between major powers, including outright military conflicts, has risen sharply.

The Global Risks Report highlighted several top risks for 2018, including environmental threats from extreme weather and temperatures, economic inequalities and cyber attacks.

But most remarkable was the surge in geopolitical concerns after a year of escalating rhetoric between Trump and North Korean leader Kim Jong Un that has arguably brought the world closer to a nuclear conflict than it has been in decades.

The survey of nearly 1,000 experts from government, business, academia and non-governmental organizations showed 93 percent expect a worsening of political or economic confrontations between major powers in 2018, including 40 percent who believe those risks have increased significantly, Reuters explained.

Some 79 percent see a heightened risk of state-on-state military conflict. In addition to the threat of a conflict on the Korean peninsula, the report pointed to the risk of new military confrontations in the Middle East.

It cited a rise in “charismatic strongman politics” across the world and said political, economic and environmental risks were being exacerbated by a decline in support for rules-based multilateralism.

The report pointed to Trump’s decisions to withdraw from the Paris climate accord and the TPP trade agreement and his threat to pull out of a deal between Western powers and Iran designed to curb its nuclear program.

“The risks we are trying to grapple with here require multilateral solutions but we are moving in the other direction,” said John Drzik, president of global risk and digital at the consultancy Marsh, which helped compile the report.

While geopolitical worries rose sharply, the environment topped the list of concerns, with extreme weather events seen as the single most prominent risk in 2018 after a year of unusually frequent Atlantic storms, including Hurricane Maria, which devastated Puerto Rico.

With global growth recovering, concerns about the economy were down sharply. Still, the report described income inequality as a “corrosive problem” in many countries and warned against complacency over the economic environment given high debt levels, low savings rates and inadequate pension provisions.

“A widening economic recovery presents us with an opportunity that we cannot afford to squander, to tackle the fractures that we have allowed to weaken the world’s institutions, societies and environment,” said Klaus Schwab, founder and executive chairman of the WEF.

“We must take seriously the risk of a global systems breakdown.”

For his part, the president claims the mainstream media misinterprets his actions and words, focusing only on controversies and ignoring his accomplishments.

"Do you notice the Fake News Mainstream Media never likes covering the great and record setting economic news, but rather talks about anything negative or that can be turned into the negative. The Russian Collusion Hoax is dead, except as it pertains to the Dems. Public gets it!" Trump recently tweeted.

(Newsmax wires services contributed to this report).

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Economy
Nobel Prize-winning economist Robert Shiller reportedly claims President Donald Trump is synonymous with a "revolution" taking place in U.S. politics and society, but not in a good way.
robert shiller, trump revolution, davos
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2018-38-17
Wednesday, 17 January 2018 09:38 AM
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