SCOTT SIMON, HOST:
The Dow Industrial Average hit 21,000 for the first time ever this week. The stock market has soared since Donald Trump's election. Why? What does this mean? Will it continue? To know the unknowable, we turn now to Joe Nocera, columnist for Bloomberg View and a returning veteran to our program. Joe, thanks so much for being back with us.
JOE NOCERA: Thanks for having me, Scott.
SIMON: So why is the stock market rising to these unprecedented levels?
NOCERA: Well, people in business - people of business - have high hopes that the moves the Trump administration makes will, you know, as they say, unshackle the animal spirits - unshackle business. As the president himself noted on early Thursday morning on Twitter, the market has added $3.2 trillion in value since November 8. So, you know, the hopes are exceedingly high. The core question right now being asked by investors is - is this run-up justified by what's going to happen over the course of the next year or two?
SIMON: So they anticipate deregulation.
NOCERA: They anticipate deregulation.
SIMON: Yeah.
NOCERA: They certainly anticipate massive tax cuts, especially corporate taxes, so that's a second really important thing. And they - you know, they expect things like other massive infrastructure. Trump has promised a trillion-dollar infrastructure plan. So there's a series of things like that have corporate America and investors' hopes very, very high.
There are three problems, as I see it. The first is that his erratic nature has the potential to do something - for something to happen - that could cause the stock market to really crash - some argument with China or some fight with India or, you know, something along those lines.
There are also two business things that he has in mind that could be very harmful and that I think could wreck the whole idea that the stock market is going to go up, and the economy's going to go up. One is if there's truly a deportation plan that causes hundreds of thousands of undocumented immigrants to be kicked out of the country. They make up 5 percent of the American workforce, and there are certain sectors of the economy, like farming, that are completely dependent on undocumented immigrants. The second is if there's a border tax or tariff, which could also lead to a trade war. And the two of those combined, I think - my view is - would overwhelm anything like corporate tax relief on the upside.
SIMON: Is it possible to undertake massive infrastructure projects without immigrant labor?
NOCERA: I don't really think it is. That's mainly because the labor market right now is very tight. There really isn't a lot of unemployment right now. And so if you undertake an infrastructure project, you need laborers. And even if you're paying the kind of wages that attract natural-born citizens, you're still going to need undocumented immigrants to get the job done.
SIMON: And these are not - infrastructure jobs and construction are usually not the kind of jobs that, let's say - that 55-year-old people who've lost their jobs and fallen off the unemployment grid can fill.
NOCERA: That's exactly right. And what's more - immigrants - undocumented and legal immigrants combined - are one part of that 20-to-50-year-old population that's growing and that are going to be the workers of the future.
SIMON: Joe Nocera, columnist with Bloomberg View - good to talk to you again, Joe.
NOCERA: Thank you, Scott. Transcript provided by NPR, Copyright NPR.
