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Creating Economic Assets out of Nothing

Creating Economic Assets out of Nothing

    One of the magical things about economics is that you can create an economic asset out of nothing but persuasion. For example, if you persuade people to be more optimistic about the economy, people invest more money, buy more products, create more jobs, and generally manifest the better economy from their own expectations. This magic of creating wealth from nothing but persuasion is one of the reasons President-elect Trump will be different from other presidents. He knows how to do this particular brand of economic magic. He has been doing it for years with his own company. The more common names for this phenomenon are branding and licensing. Companies license the Trump name for their buildings and other products because they recognize the name as a psychological asset that Trump created by persuasion. 

    Remember the loan that Trump got from his dad for his first major project? Trump persuaded his dad to give him a loan, then he persuaded people to work for him, and then he persuaded people to move into the building. You can see in that story that persuasion was used as a tool to create a physical economic asset in the form of a building. But a building is not a brand. Trump had to add more psychology to turn it into a brand that others would license. it’s the branding and licensing part that involves creating an invisible economic asset from persuasion alone. 

    Now President-elect Trump is doing the same thing for America. That’s what his negotiations with Carrier and Ford and Boeing are all about. It is the start of rebranding America as a new and better version of itself, and one in which Americans take care of their own before taking care of the rest of the world. And apparently that brand and the optimism that comes with it is working. The stock market is up since the election, creating billions in new wealth from nothing but persuasion.

    I find it easy to imagine a President Trump turbo-charging America’s economy with a ripple effect that benefits the rest of the world in lots of different ways. I don’t know how big this economic effect can get, but “billions” probably doesn’t cover it. I think we’re looking at a trillion-dollar wealth creation from persuasion alone.


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