Mixed economic signalsThanks to President Donald Trump’s drive to rev up the U.S. economy, the Dow Jones Industrial Average topped 20,000 points for the first time. In Wednesday’s trading on the New York Stock Exchange, the index shot up to 20,068.5, up 155.80 from the previous day. On the Korea Exchange the following day, Samsung Electronics hit a new record at over 2 million won ($1,725) per share after plunging to 1.12 million won last year.
The spike in the Dow Jones index is expected to continue because of Trump’s determination to create new jobs. He is pressuring companies to invest in America and create more jobs than ever before. CEOs of major U.S. carmakers promised him they would expand investments in the U.S.
But this may just be the tip of the iceberg. Trump’s America First policy will only accelerate, as seen in his signing of executive orders to renegotiate the North American Free Trade Agreement and leave the Trans-Pacific Partnership — not to mention an order to build a big wall along the U.S.-Mexico border.
The upswing in Samsung shares is also anticipated to gain momentum. Local stock brokers have elevated their target to 2.3 million won per share in sharp contrast with gloomy prospects facing the company after the explosions of some Galaxy Note7 phablets. Samsung’s performance is remarkable given a critical void of leadership after its management was questioned in the independent counsel’s investigation of the Choi Soon-sil scandal. As long as the boom continues in the global market for flash memory, though, Samsung will keep raking in huge profits down the road.
In the meantime, the shadow of deepening polarization of wealth rings alarm bells across the spectrum, and the Korea-U.S. free trade deal could be Trump’s next target despite worsening hardships for our small and mid-size companies as they seek new growth engines for the economy.
A trade war between the United States and China could lead to a noticeable decrease in our exports and overseas investment and an increase in the jobless. As the number of unemployed has exceeded 1 million, our government had to readjust its growth estimate to less than 3 percentage points. To make matters worse, the anti-graft law called the Kim Young-ran Act is depriving our farmers, fishers and restaurants of customers.
Presidential hopefuls must present clear visions to help our lackluster economy rebound. Only when companies’ investments and consumption by the masses recover can our economy be revitalized.
JoongAng Ilbo, Jan. 27, Page 26