The first rule for being a Wall Street stock analyst is never to predict both a share price and a date for it. Virtually all analysts give a “target price” for the stocks they follow, but they never specify when that price will be achieved because they realize it would be impossible to say. The same rule applies to Washington policymakers. Members of the Trump administration are edging closer to breaking the rule, and they may regret it.
Treasury Secretary Steven Mnuchin told the Wall Street Journal yesterday that America’s slow GDP growth over the past seven years resulted from Obama-era policies that this administration can reverse. “We think it’s critical that we get back to more normalized economic growth,” Mnuchin said. “More normalized economic growth is 3% or higher.”
Note that he wisely refused to say when we’d reach 3%. Virtually no private economist sees such rapid growth happening in at least the next decade; the Fed predicts long-term growth of only 1.8%. But other administration officials may be forced into attaching dates to highly audacious growth forecasts because next month the White House is scheduled to release a budget plan. If the plan features tax cuts, heavy infrastructure spending, a higher military budget, and no cuts to Social Security or Medicare, all without calamitous effects on the budget deficit – as it must if it’s to honor Trump’s campaign promises – then it will have to assume heroic growth rates. The administration is reportedly planning to assume exactly that in order to make its budget numbers work.
The risk is that by the time fiscal 2018 ends on September 30 of next year, five weeks before the mid-term elections, we’ll know whether those highly ambitious predictions came true on time. It’s a high-risk bet: Trump will be either an economic miracle worker or an irresponsible dreamer digging the U.S. into a fiscal pit.
The situation is similar regarding other Trump promises. Most of them don’t carry such firm deadlines, but September 30, 2018, allows a reasonable time for achieving them. Will manufacturing employment be higher or lower than it was on inauguration day? Will America be demonstrably safer? Will there be a wall? Will ISIS be destroyed?
Trump disproved the doubters when he won in November, and he could do it again. But it will be difficult, and the stakes are extremely high. After all, when business leaders make promises as specific as Trump’s, and fail to deliver, they get fired.
After some 400 issues, Power Sheet will become but a memory at the end of this week, and I will be devoting my time to the physical and digital pages of Fortune. On Monday, you’ll begin receiving CEO Daily, Fortune editor Alan Murray’s popular newsletter, if you don’t get it already. And while we’re on the subject, I urge you to consider signing up for some of our other newsletters, including RaceAhead, on how to take the lead in corporate diversity, and Trumponomics Daily, our all-new dispatch from D.C. You’ll find them and all our other newsletters here: http://fortune.com/newsletters/
What We’re Reading Today
Carlos Ghosn to step down as Nissan CEO
After rescuing Nissan and running it for the past 16 years — while also running Renault for most of that time — Ghosn will focus on overseeing the alliance of Renault, Nissan, and Mitsubishi as chairman of all three automakers. Hiroto Saikawa will succeed Ghosn as Nissan CEO on April 1. Fortune
Inside Uber’s walls
Employees are rewarded for making bold bets, often stepping on each other’s toes, and the best performers often get away with infractions, current and former employees told the New York Times. A complaint of sexual harassment and discrimination from former software developer Susan Fowler has led CEO Travis Kalanick to apologize. She says managers were constantly undermining supervisors; other Uber employees concur. NYT
Tillerson meets with Mexican leaders
Hours before Secretary of State Rex Tillerson landed in Mexico, the country said it would not accept President Trump‘s new immigration rules. The situation portends tense conversations with President Enrique Peña Nieto in what has historically been a friendly relationship. NBC News
Building Better Leaders
Nadella: Fear kills innovation
“It’s so critical for leaders not to freak people out, but to give them air cover to solve the real problem,” says Microsoft CEO Satya Nadella. “If people are doing things out of fear, it’s hard or impossible to actually drive any innovation.” USA Today
When debating men in the boardroom…
…Hill Holliday COO Leslee Kiley uses her experiences as a child at the dinner table. She and her father used to debate the latest topics in the news, honing her ability to lay out clear, confident, prepared arguments. Fortune
The Trump tweet impact
Companies attacked by President Trump on Twitter haven’t suffered much impact. In fact, the 12 companies examined have outperformed the broader U.S. market as a group since the social media shaming. WSJ
Trump ends transgender bathroom protections in schools
President Trump rolled back rules imposed by President Obama allowing transgender students to use the bathrooms or locker rooms of their sexual identity. The Trump administration says states and local schools should decide on the right policy. Fortune
McMaster considers reorganizing Trump’s foreign policy team
New National Security Adviser H.R. McMaster is considering reinstating the director of national intelligence and the chairman of the Joint Chiefs of Staff as full cabinet-level members of the National Security Council. He’s also likely to restore Homeland Security to the Council, reversing a move made soon after Trump‘s inauguration. NYT
Trump polls even lower than the media
In a new poll, 52% of respondents said they trust mainstream media to tell the truth more than Trump. Just 37% trusted the president more. Washington Post
Fortune Reads and Videos
Apple speaks out against Trump’s decision…
…to roll back transgender protections in schools. “We support efforts toward greater acceptance, not less, and we strongly believe that transgender students should be treated as equals,” the company said in a statement. Fortune
Mark Cuban says a universal basic income…
…as a response to job losses from automation would be “one of the worst possible responses.” Fortune
U.S. life expectancy is expected to improve…
…to 83.3 years for women and 79.5 years for men by 2030. But that will still lag many other developed nations. Fortune
Dell founder Michael Dell turns 52 today. Biography