This is their list:
4. Healthy Consumer and Employer Confidence – optimism can be contagious, and President Trump understands that and projects optimism.
This is their list:
4. Healthy Consumer and Employer Confidence – optimism can be contagious, and President Trump understands that and projects optimism.
Investor’s Business Daily recently posted an editorial about the impact of President Trump’s proposed tax cuts. The editorial notes that the Democrats sudden concern for deficits is a bit disingenuous after the impact President Obama had on the deficit during the past eight years. The editorial also notes that President Trump’s tax plan will not increase the deficit, but will probably decrease the deficit due to the economic growth created by lowering taxes.
The editorial includes the following chart:
According to the Congressional Budget Office, the House tax bill would boost deficits over the next 10 years by a total of $1.4 trillion. The added interest on the debt would kick that up to $1.7 trillion.
That looks like a lot of money. Except that equals just a 17% increase in total deficits projected over the next decade.
And that increase is a wild exaggeration, since it doesn’t allow for any extra economic growth from the GOP‘s pro-growth tax cuts — a premise that even some honest liberal economists don’t believe. The actual deficit boost, if there is any, will be far smaller than what the CBO says.
But let’s accept the CBO’s numbers as gospel truth.
Look more closely at the data and you see that what’s driving deficits ever upward isn’t the Republican tax cuts. It is out-of-control spending.
Over the past 50 years, despite all the myriad changes in tax laws, revenues as a share of GDP have remained remarkably close to the average: 17.4%. In fiscal year 2017, which ended in September, the share was 17.3%. In Bush’s last in office, it was 17.1%. When Bill Clinton took office in 1991, it was 17.3%.
What happens if the Republican tax plan goes into effect? According to the CBO, taxes as a share of the economy in 2027 will be … 17.9%.
That’s right. Even with an allegedly budget-busting tax cut, the federal government will claim a greater share of the nation’s economy in 2027 than it does today, and that share will be above the average for the previous 50 years.
The only reason deficits continue to climb over the next decade is because federal spending is going up at an unsustainable rate.
The editorial concludes:
But the bigger problem is that any reasonable attempt to rein in any of the entitlement programs is met by fierce and unrelenting opposition from all those Democrats who now claim to worry about deficits. They will viciously demagogue any Republican who dares to propose real reforms of these programs, and then brag about any resulting election victories.
So, the next time you hear Democrats pretend to be deficit hawks, ask them what their plan is to bring entitlement spending under control.
There are no guarantees in the economy. There are certain things that the government can do that historically have aided growth and certain things that the government can do that have inhibited growth. We have history as our guide as to what works, but sometimes people have a political bias that tends to ignore history.
Real Clear Politics posted an article today about the Trump economy. The article was written by Stephen Moore. The economy is not booming, the workforce participation rate is still too low for it to be considered booming, but it is definitely improving. The title of the article is, “Why the Left Has Been So Wrong About the Trump Boom.”
The article reports:
Time magazine‘s cover story for the week of Nov. 6 is a classic. It blares: “The Wrecking Crew: How Trump’s Cabinet Is Dismantling Government As We Know It.” The New York Times ran a lead editorial complaining that team Trump is shrinking the regulatory state at an “unprecedented” pace.
Meanwhile, last week the stock market raced to new all-time highs; we had another blockbuster jobs report with another fall in the unemployment rate; and housing sales soared to their highest level in a decade.
The article at Time magazine fails to recognize that those two facts are related.
The article at Real Clear Politics further notes:
But so far the Trump haters have missed the call on the economy‘s trajectory. Doubly ironic is that the same Obama-era economists who are trashing Trump’s increasingly realistic forecast of 3 percent growth are the ones who predicted 4 percent growth from the Obama budgets. Obama never came anywhere near 4 percent growth, and at the end of his second term, the economy grew at a pitiful 1.6 percent.
Under Obama, free enterprise and pro-business policies were thrown out the window. What was delivered was the weakest recovery from a recession since World War II, with a meager 2.2 percent average growth rate. Middle America felt it, which is why Trump won these forgotten Americans.
One reason that economist Larry Kudlow and I and others assured Donald Trump that 3 to 4 percent growth was achievable was that Trump could capitalize on the underperformance of the Obama years. Under Obama, business investment fell almost two-thirds below the long-term trend line — thanks to higher taxes on investment. Now, partly in anticipation of the tax cut, business spending keeps climbing.
The article at Real Clear Politics concludes:
Maybe the liberal economists and their shills in the media should show some humility. They should acknowledge they were dead wrong about how much Obamanomics was going to grow the economy and about how Trumponomics would crash the economy and the stock market. Or better yet, maybe the rest of us should all just stop listening to them.
The other conclusion that can be reached is that the free market works every time it is allowed to work. Government interference has a very negative impact on economic growth. We need to send President Obama’s economic advisors and a good number of Congressmen back to school to study basic economics.
The American economy is slowly improving. It is not racing along, but it is improving. Investor’s Business Daily recently posted an editorial explaining that although we have a 4.1 percent unemployment rate, we are not yet at full employment. As the article explains, there are other numbers that need to be considered when looking at the economy.
The editorial reports:
But look at the numbers more closely and you see that we are far from full employment.
First, the 0.1 percentage point decline in the unemployment rate in October was almost entirely the result of the fact that 968,000 dropped out of the labor force that month.
That’s right, for every new job created, nearly four people left the labor force.
The broader measure of unemployed — which combines those actively searching for a job with those working part time but want to work full time or are “marginally attached” to the labor force — show the jobless rate to be 7.9%.
And the IBD-TIPP poll shows that there’s likely even more slack than that. The October survey — which asks those polled whether they or anyone in their household is looking for work — shows that the share of job seekers is currently above 10%. This number, by the way, has consistently tracked higher than either of the BLS’s two measures.
Here’s another way to look at it. Back in December 2000, the unemployment rate was 3.9%. But that month, the labor force participation rate — the share of the population that’s either working or looking for a job — was 67%.
The current rate: 62.7%.
If the labor force participation rate were the same today as it was in 2000, the official unemployment rate would be more like 10%.
The 10% unemployment rate would be better than what the actual rate has been in recent years, but obviously, it is not good.
The editorial concludes:
There is clearly still a need for pro-growth policies to get millions of workers sitting on the sidelines back to work.
Those pro-growth policies need to begin with the passage of President Trump’s tax proposal followed by a complete repeal of ObamaCare. If the Republicans in Congress want to be re-elected, they need to do both. It is time to put away the fear of a political outsider succeeding as President and begin to work together to move the country forward.
An article on
An article on the website of the JFK Library includes the following paragraph:
The president finally decided that only a bold domestic program, including tax cuts, would restore his political momentum. Declaring that the absence of recession is not tantamount to economic growth, the president proposed in 1963 to cut income taxes from a range of 20-91% to 14-65% He also proposed a cut in the corporate tax rate from 52% to 47%. Ironically, economic growth expanded in 1963, and Republicans and conservative Democrats in Congress insisted that reducing taxes without corresponding spending cuts was unacceptable. Kennedy disagreed, arguing that “a rising tide lifts all boats” and that strong economic growth would not continue without lower taxes.
The Canada Free Press posted an article today about some of the benefits of President Trump‘s proposed tax package. The article points out some basic economic principles that should be considered when analyzing the tax proposal.
The article points out:
2. The transfer of this wealth from control of politicians to business people will ensure that capital fuels real, profit-driven productivity rather than simply being transferred to politically favored constituencies. In other words, if you want some of that capital, you’ll have to do something productive to earn it. That’s how economic growth happens.
3. A company that earned $100 million in profits will now save $15 million on its federal tax bill. What can a company that size do with a suddenly found $15 million? How many people can it hire, products can it develop, machines can it buy, facilities can it expand?
4. The professional service industry should benefit tremendously from this tax change, particularly smaller practitioners. Why, you ask? They don’t pay massive taxes, after all. You’re right, they don’t. But the massive corporations they’d like as clients do. Many of these corporations view the services of such professionals as a luxury they would like, but can’t afford when margins are too tight. Freeing up extra cash for big corporations will give professional service providers more opportunity to secure large corporate contracts.
5. Wages will increase, but not for the reason some people think. Many of the arguments liberals make against corporate tax cuts is that corporations will just pocket the money and won’t share it with their workers. But that’s not how business works. The goal of a corporation is to be more productive and profitable, and you need capital to invest in productivity. When productivity rises, wages follow because workers can provide more value. Corporations aren’t going to raise wages just because there’s more money sitting around, nor should they. They’ll raise wages because the greater capital availability will make it possible to increase productivity.
6. Liberals argue that the government would spend the $200 billion as well, so it would be reinvested back in the economy regardless. The government would spend it, but businesses will spend it more wisely because they’re accountable for the result of the spending. Also, you always spend money more wisely when it’s money you earned as opposed to money you simply confiscated from someone else. That’s why lottery winners so often end up in bankruptcy.
Unfortunately, many Americans are not familiar with the basic economics that will make this tax plan work. The Democrats have already begun yelling ‘tax cuts for the rich,’ and many people will believe them. The basic concept here is that the tax cuts should go to the people who are paying the taxes. Since almost half of Americans do not pay income taxes and will not pay taxes under the proposed plan, why should they resent those who are paying taxes getting a small break?
I am not an economist, and I don’t play one on television, but I am capable of basic observations. The July jobs numbers came out Friday. This put the rather biased media in a position of having to say that the report beat expectations. When do they ever get their expectations right?
The Wall Street Journal posted the statistics on Friday. Here are some highlights:
The economy created 209,000 jobs in July, well above this year’s average monthly gain of 184,000.
…The average hourly wage for private-sector workers grew 2.5% in July. That’s a modest pace historically, but it looks better when considering inflation is so low.
…The share of Americans holding jobs or actively looking for work rose a tenth of a percentage point last month to 62.9%. That’s very slight progress.
…A measure underemployment—one that takes into account jobless workers, reluctant part-time workers and Americans too discouraged to look for work—remained at 8.6%. That’s two tenths of percentage point higher than May’s level, though it’s down more than a point from the prior year.
You can’t turn eight years of anemic economic growth around in seven months. However, we are definitely moving in the right direction. Despite the lack of cooperation from the Washington establishment, President Trump is deregulating and moving forward. If we are to see real economic growth, we need to drain the swamp of those establishment politicians who are blocking President Trump’s economic policies. We need to find primary challengers to many of the so-called leaders in Washington.
In 1910 a group of political, industrial, and financial leaders met in secret on Jekyll Island in Georgia to lay the foundation for the Federal Reserve. The people in attendance included Nelson W. Aldrich, Republic Whip in the Senate, Abraham Piatt Andrew, Assistant Secretary of the U.S. Treasure, Frank A. Vanderlip, president of the National City Bank of New York (representing William Rockefeller), Henry P. Davison, senior partner of the J.P. Morgan Company, Benjamin Strong, head of J.P. Morgan’s Bankers Trust Company, and Paul M. Warburg (partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France). (This information is from The Creature from Jekyll Island by G. Edward Griffin.) This meeting set up the cartel we now know as the Federal Reserve. It is a cartel because it is a small group of people not accountable to the government who control the flood of money in America. They have traditionally used that power politically and will continue to do that in the future. Although some members of Congress have called for a thorough audit of the Federal Reserve, but because of the power the fed has, that will never happen.
Yesterday The Gateway Pundit posted a story about recent actions by the Federal Reserve. During the eight years of the Obama Administration, President Obama continually used executive orders to put roadblocks in the way of economic growth–over-regulation, increases taxes on successful people, and generally doing things that made it more difficult for small businesses (the backbone of our economy) to grow. During this time, the Federal Reserve kept the economy from feeling the impact of President Obama’s actions by not raising interest rates. Now we have a President who understands economics and is doing things to help the economy grow. So what is the Federal Reserve doing–trying to undercut his success.
The article at The Gateway Pundit reports:
No Fed Funds Rate increases took place between June 2006 and December 2015. CNBC reported in December 2015 that President Obama oversaw “seven years of the most accommodative monetary policy in U.S. history” (from the Fed). Finally, in December 2015 after the Fed announced its first increase in the Fed Funds rate during the Obama Presidency, it was reported that:
“Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic conditions, the committee decided to raise the target range for the federal funds rate to ¼ to ½ percent,” the FOMC’s post-meeting statement said. “The stance of monetary policy remains accommodative after this increase, thereby supporting further improvements in labor Premarket conditions and a return to 2 percent inflation.”
The only other Fed Funds Rate increases since 2016 were after President Trump was elected President. The Fed Funds Rate increased on December 14, 2016, on March 15th, 2017 and yesterday June 14th, 2017 by .25%.
The article further notes:
The Fed Funds Rate greatly impacts the economy:
“Lower interest rates usually spur the economy by making corporate and consumer borrowing easier. Higher interest rates are intended to slow down the economy by making borrowing harder.”
So again the question is whether the Fed is trying to negatively impact President Trump’s economic recovery from the abysmal Obama years (Obama was the only President where the GDP growth rate never broke 3%) or is the economy just so much better now that President Trump has taken office?
We suspect both.
The report includes the following:
“May proved to be a very strong month for job growth,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Professional and business services had the strongest monthly increase since 2014. This may be an indicator of broader strength in the workforce since these services are relied on by many industries.”
Yesterday The Washington Examiner reported that at the beginning of May the total continuing claims for unemployment benefits ran at the lowest level in 28 years. The workforce participation rate in April was 62.9 percent (in March it was 63.0). That number has been hovering at 62 and 63 percent since January of 2012.
The article reports:
Over the past month, the average number of continuing claims per week has clocked in at 1.95 million, the lowest number in 43 years.
Those numbers were released as part of the department’s weekly jobless claims report, which is valued by investors and government officials because it provides a frequently-updated indication of new claims for unemployment benefits, a proxy for layoffs. Fewer layoffs means more job creation.
Thursday’s report showed just 232,000 new claims, adjusted for seasonal variations, for the week ending on May 13. That was the lowest number in nearly three months, and an extremely low mark by historical standards.
…At 4.4 percent in April, the unemployment rate is already below where Federal Reserve officials thought it could sustainably go if the economy were fully healthy.
Jobless claims below 300,000, economists calculate, go along with steady or declining unemployment, meaning that the unemployment rate could fall further still.
Deregulation, efforts to repeal ObamaCare, and the development of America’s energy resources have a lot to do with the economic growth that has begun under President Trump. Note that all three of these things involve an undoing of President Obama’s policies. Elections do have consequences, and the 2016 election has had very positive economic consequences.
The article reports:
With little fanfare and even less media coverage, the House Financial Services Committee recently approved along party lines a bill that would significantly reform the economy-deadening Dodd-Frank law. It’s a good first step toward restoring our financial freedom.
The fact is, the 2010 Dodd-Frank law has been a disaster, responsible for killing hundreds of thousands of U.S. jobs and putting a damper on economic growth by making credit harder to come by for those who need it most.
In a recent interview with NPR, House Financial Services Chairman Jeb Hensarling of Texas made a succinct case for getting rid of Dodd-Frank: “Free checking at banks has been cut in half. Banking fees have gone up. Working people are finding it more difficult to get mortgages,” he said.
He could have gone further. Small- to medium-size banks — the traditional sources of working capital for small business — have been hurt worst by Dodd-Frank’s extensive regulations that impose billions of dollars in unnecessary costs each year. And rather than repealing too-big-to-fail for big banks, Dodd-Frank actually makes it all but certain that taxpayers will be asked to bailout big banks during the next downturn.
Dodd-Frank was passed with the idea that the banks and Wall Street were responsible for the financial meltdown of 2008. Actually, the government and government policy were much more to blame.
Here is that video:
The article at Investor’s Business Daily further explains:
Under regulatory threat from the government, banks made loans they knew were bad, then the government bought them back. When the Fed went too far in raising interest rates in the mid-2000s, the housing market cratered, banks’ balance sheets were destroyed, and a massive credit crunch and the “Great Recession” ensued. The government caused this crisis — not Wall Street.
As we’ve written repeatedly in the past, Dodd-Frank should have been shut down long ago. It has strangled entrepreneurial activity and dampened economic growth, and made it impossible for millions of Americans to get home loans. It’s a major reason why GDP during the Obama years grew at a pathetic 1.9% rate, rather than the more normal rate of 3% or more.
We hope the House will move quickly to end Dodd-Frank, one of the worst financial regulatory laws in modern history.
It is going to take a while, but the damage done to the American economy by the policies of Congress and the misdirected efforts to correct something that did not cause the problem can be corrected. We need both political parties to work together to make that happen. Unfortunately, I don’t think that is likely. Hopefully the Republicans have enough votes to pass this legislation without any Democratic votes.
President Truman is quoted as saying, “It’s amazing what you can accomplish if you do not care who gets the credit.” He also said, “You can’t get rich in politics unless you’re a crook.” We are seeing the truth in both of those observations in the current tax debate.
You might remember that 2012 was the year the tax increases to pay for ObamaCare began. In 2013 the Capital Gains tax increased for high income earners, and the increase in the medicare payroll tax also began in 2013. Obviously raising taxes did not help the economy.
This is the laffer curve:
I am going to assume that Democrats are going to try to block President Trump’s tax reform. I think that is rather obvious. So the question becomes, “Do Democrats not understand economic principles and economic growth (e.g. the Laffer curve) or do they simply want to enslave the American worker?” At this point it is a valid question.
I can understand high-tax states not wanting to give up the benefit they reap in the current tax code. I can also understand all the lobbyists tearing their hair out because their special interest will no longer get a tax break, but at some point Congress needs to do what is best for the country and for the American people. Economic growth is struggling under the current tax burden. Every American who works is giving the government a higher percentage of what they earn than the Medieval surfs paid their lords. That is a scary thought. At the same time, many people who choose not to work are driving expensive cars and living better than the people who do work. The poverty in America that the government is now supporting currently owns a nice car, a big-screen television, an ipad, a smart phones, and central air conditioning. I am all for helping people in time of need, but I think we have lost our way.
Congress needs to pass President Trump’s tax plan. Every Congressman who does not support the plan needs to be voted out of office as soon as possible. Unless the American voters begin to hold their representatives accountable for what they do, the swamp will never get drained. The problem is in both political parties. It is time to take note of the people whose votes help America and the people whose votes hurt America.
The article reports:
Initial claims for state unemployment benefits declined 25,000 to a seasonally adjusted 234,000 for the week ended April 1, the Labor Department said on Thursday. The drop was the largest since the week ending April 25, 2015.
The prior week’s data was revised to show 1,000 more applications received than previously reported.
Claims have now been below 300,000, a threshold associated with a healthy labor market for 109 straight weeks. That is the longest stretch since 1970 when the labor market was smaller.
The labor market is currently near full employment.
Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 250,000 last week.
A Labor Department analyst said there were no special factors influencing last week’s claims data. Claims for Louisiana were estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,500 to 250,000 last week.
The article reminds us that last week’s data will have no impact on the March unemployment report due out on Friday.
The article further reports:
According to a Reuters survey of economists, nonfarm payrolls likely increased by 180,000 jobs last month after rising 235,000 in February. The unemployment rate is seen steady at 4.7 percent.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid decreased 24,000 to 2.03 million in the week ended March 25. The four-week moving average of the so-called continuing claims fell 7,750 to 2.02 million, the lowest level since 2000.
This is good news. The number to watch in the report coming out tomorrow will be the Labor Force Participation Rate. If the unemployment rate stays low as more people enter the workforce, then we are on our way to an actual recovery. The unemployment number was kept artificially low during the Obama Administration by not counting people who had given up looking for work. As those people begin to look for work, it is quite possible that the unemployment number will rise slightly. In order to get a true picture of what is actually happening to employment in America, you need to look at both the unemployment rate and the Labor Force Participation Rate. The unemployment rate needs to be low and the Labor Force Participation Rate needs to be high. I will be posting both of those numbers as soon as I get them.
Investor’s Business Daily posted an editorial today about the current state of the economy. The editorial reminds us that under President Trump, the economy is growing rapidly.
The editorial reports:
Growth: For eight years, economic indicators repeatedly came below forecasts. Now, there’s been a string of reports — the latest one is on jobs — that have outperformed economist predictions. What’s changed, we wonder?
The Bureau of Labor Statistics reported Friday that the economy added 235,000 jobs in February, when economists expected 200,000 new jobs. And that comes after January’s 227,000 gain, which also beat economists’ forecasts by a substantial margin.
That’s not all. Other recent indicators have come in better than economists had expected.
Orders for capital goods were higher in December than forecast.
There were supposed to be 5.55 million existing-home sales in January. The actual number was close to 5.7 million — which was the highest level since 2007.
Retail sales in January climbed 0.4%, where economists had predicted they’d advance only 0.1%. At the same time, the Commerce Department revised the December sales increase upward to 1%.
Now, obviously we can’t draw any broad conclusions from a few unexpectedly good economic results.
But it’s worth pointing out that this is a dramatic change from the Obama years, when about the only thing that you could predict with any degree of accuracy was that the economy would underperform economists’ predictions.
This is an example of soft bias on the part of the media. When the economic numbers are changed during the month following their release, they may not receive the media coverage that the numbers received when they were originally released.
The editorial concludes:
…The National Federation of Independent Business‘ small business optimism index hit a 12-year high in January. The IBD/TIPP Economic Optimism Index was the highest it’s been since October 2004. The Dow has gained nearly 17% since the November elections.
This sudden change of heart appears to be having an immediate impact on the economy. The unexpected rise in home sales, for example, is being driven in part by “a postelection jump in mortgage rates, led by optimism about President Donald Trump‘s plans to ease regulations and spur economic growth,” noted Crain’s Business. The jump in capital goods orders “is a sign that businesses might be following up buoyant postelection sentiment by spending more after years of tepid global growth,” according to Bloomberg.
Whether this will last depends on whether Trump gets his economic policies in place.
In the meantime, it’s worth asking why it is that economists consistently overestimated the economic impact of Obama’s tax-regulate-and-spend policies, and now appear to be underestimating Trump’s pro-business agenda.
It’s time to get on board–it seems that the train has left the station.
Yesterday The Washington Free Beacon reported:
The International Monetary Fund downgraded the economic growth outlook for the United States to 1.6 percent in 2016, which is the largest one-year drop seen for an advanced economy, according to the Fund’s World Economic Outlook report.
The report states that the United States grew at a rate of 2.6 percent in 2015 and is projected to slow to 1.6 percent in 2016, a decline of 38 percent.
The article further reports:
Weaker-than-expected growth in the United States is one of the reasons why the International Monetary Fund cut its global growth projections. The group projected that global growth would slow to 3.1 percent in 2016 after growing 3.2 percent in 2015, citing the U.S. growth forecast as well as the Brexit vote.
“Economic growth in recent years has fallen short of expectations in both advanced and emerging market economies,” the report says. “As the world economy moves further away from the global financial crisis, the factors affecting global economic performance are becoming more complex. They reflect a combination of global forces—demographic trends, a persistent decline in productivity growth, the adjustment to lower commodity prices—and shocks driven by domestic and regional factors.”
Let’s look at how government policy can impact economic growth. The first problem is over-regulation. That is a problem in all industries, but in particular in the energy sector. How many coal mines, coal companies, or coal-powered electric plants has the Obama Administration put out of business? What happens to the cost of electricity for the average family as cheaper methods of generating electricity are shut down? As the cost of electricity rises, how does that impact the disposable income of Americans and the willingness of companies to do business here. Let’s also look at the healthcare industry. ObamaCare is dying a slow, painful death. Insurance premiums for some Americans are rising rapidly, and the government is fining other Americans who can’t afford health insurance. Meanwhile, some of the reimbursement rates are so low, some doctors are refusing certain patients.
What impact has the Obama Administration had on the cost of doing business in America? Will those policies change under Hillary Clinton? This may be an ‘if you like your job, you can keep it’ moment in America. Your vote may actually determine whether or not you are gainfully employed after January.
The Democrats accused the speakers at the Republican National Convention of preaching doom and gloom. President Obama has stated that he is proud of the current economic recovery. Some of us might ask, what recovery?
This graph was posted by a friend on Twitter. Houston, we have a problem. Our economy has not been growing. We need to free the private sector from the burden of overregulation by the federal government. Hillary Clinton will not do that–she will simply continue President Obama’s economic policies. That is not a good idea.
The article includes the following chart:
The growth of regulations under President Obama has been astounding.
The article reports:
Total spending on federal regulatory activity has jumped almost 18% in real terms since Obama took office, reaching $56 billion this year. That outpaced overall economic growth, which has climbed a total of 13% since 2008.
Over those same years, the number of jobs at these regulatory agencies climbed by 11.8% — to almost 280,000 workers — while the number of private sector jobs has growth by 8.5%.
To put these numbers in perspective: If GDP had grown as fast as the federal regulatory budget, the economy would be $696 billion bigger today. If private sector employment had kept pace with the growth in regulatory jobs, there would be 3.7 million more people at work.
The study, published jointly by the Weidenbaum Center at Washington University in St. Louis and the Regulatory Studies Center at George Washington University, also breaks down regulatory spending into “social” and “economic” categories. Social regulations cover health, safety and environment, and include agencies such as the FDA, Homeland Security, the EPA, the National Highway Traffic Safety Administration.
The thing to remember here is that regulations cost money. They are an extra burden on small businesses and slow down the growth of the economy.
The article notes:
Based on the administration’s own figures, these Obama-imposed rules cost the economy a total of $108 billion a year, but as Heritage notes, the actual costs are much higher because federal regulators routinely lowball compliance costs.
This is no way to run an economy.
Yesterday Twitchy reported that Wendy’s will be introducing self-service kiosks in their 6000 stores nationwide this year.
Investor’s Business Daily reported yesterday:
Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”
It’s not surprising that some franchisees might face more of a labor-cost squeeze than company restaurants. All 258 Wendy’s restaurants in California, where the minimum wage rose to $10 an hour this year and will gradually rise to $15, are franchise-operated. Likewise, about 75% of 200-plus restaurants in New York are run by franchisees. New York’s fast-food industry wage rose to $10.50 in New York City and $9.75 in the rest of the state at the start of 2016, also on the way to $15.
Wendy’s plans to cut company-owned stores to just 5% of the total.
There are some things those asking for significant increases to the minimum wage should keep in mind. Very few people are actually attempting to support families on minimum wage jobs–generally those holding those jobs are people attempting to enter the work force for the first time. These jobs allow them to develop basic workplace skills–showing up on time, being polite to customers, and showing up for work every day. Companies are in business to make a profit. If they do not make a profit, there is no reason for them to stay in business. No government has the right to determine what profit is acceptable–left alone, the free market will do that. Part of our current problem is that the government has interfered so much with the free market, that that normal checks and balances within the free market are not working as they should. The solution would be to get the government out of the marketplace–let businesses complete for workers and pay them what is necessary. It is also telling that because economic growth in America is currently slow, workers who would not normally be working in minimum wage jobs are working there.
Yesterday The Washington Times posted an article about America‘s shrinking labor force. Although the unemployment rate is reported at 5.1 percent, that does not take into account the number of Americans who have given up looking for work.
The article reports:
The “unemployment rate” most often cited in the news media is U-3. But U-3 ignores everyone who hasn’t actively looked for work within the previous four weeks. So if you can’t find a job and give up looking, you don’t count as “unemployed” in the U-3 rate.
If we calculated the illiteracy rate that way, we wouldn’t count someone as illiterate unless he had attended a reading class in the past four weeks. In other words, the U-3 figure is fake, because it ignores whether the labor force participation rate has dropped.
According to Diana Furchtgott-Roth, former chief economist at the Labor Department, if America today had as high of a labor force participation rate as we had in 2006, then “last year’s average unemployment rate would have been 11.4 percent instead of 6.2 percent.”
So the U-3 measure of unemployment creates the illusion that the economy is serving American workers roughly twice as well as it really is, when you consider all the persons who’ve given up looking for jobs.
Today’s labor force participation rate is 62.6 percent, a 38-year low. That depressed number wipes out all the gains in employment made during the Reagan era, a time when women by the tens of millions moved into the workforce.
Today, more women are on food stamps than have full-time jobs.
If the economy is doing so well, why are more women on food stamps than have full-time jobs?
The article goes on to explain that before the housing bubble burst, the American economy grew at a rate of about 3.1 percent a year. Since President Obama has been in office, the growth has been slightly over 2 percent. Slow growth is expected to continue due to President Obama’s policies–ObamaCare and excessive Environmental Protection Agency regulations on energy production are expected to have a serious negative impact on economic growth.
The article concludes:
Even worse: That idea of a “new normal” 2.1 to 2.2 percent annual growth rate may be overly optimistic. We have yet to see the effect of many recent and proposed anti-growth policies — for example, Obamacare, which is being phased in over a period of years, and the Environmental Protection Agency’s proposed plan, not yet final, to make the price of electricity “skyrocket.” If anti-growth policies push the economic growth rate down to around 1.6 percent a year, that’s like cutting the size of the 2063 economy in half. Long before that, government finances will collapse.
Welcome to Greece.
Elections matter. Unless we change those making policy in Washington, D.C., we will become Greece.
The article includes the following chart:
As you can see from the chart, the economy has not shown consistent growth since 2009.
The article concludes:
The administration always offers excuses for the economy’s inadequate performance on its watch–most recently, cold weather–but the common denominator is an anti-business, anti-growth administration that spends too much, wastes too much, incurs too much debt, and imposes too many costly regulations.
Our country was designed to be governed by laws made by lawmakers who would be held accountable by the voters. Unfortunately, we have evolved into a country where regulations made by unelected officials who are not accountable to anyone have crippled economic growth. It is long past time to elect leaders who will follow the constitution and not allow unelected bureaucrats to determine our economic future.
Yesterday Investors.com posted an article about the employment numbers released by the Bureau of Labor Statistics on Friday.
The jobless rate is 5.8%, the lowest since June 2008. However, the Labor Force Participation Rate (the percentage of Americans of working age who are working) is at 62.8 percent, essentially flat since April according to the Bureau of Labor Statistics website.
Despite these relatively good numbers, consumer confidence is still low, Part of the reason for that is what has happened to Middle Income family income since 2007.
The article at Investors.com reports:
Real median household incomes fell 6.6% from $55,627 in 2007 to $51,939 at the end of last year. It will take years to recoup that loss. Meanwhile, male workers’ incomes have been in a tailspin for over a decade.
Private-sector wages grew 2% from last year in October — just barely ahead of the 1.7% rise in inflation.
So lack of opportunity stemming from 2% GDP growth and slow-growing family incomes have put average Americans in a sour mood.
The article at Investors.com further reports:
It’s policy failure. We and others repeatedly warned that President Obama’s massive stimulus, cheap money and heavy-handed regulation were a recipe for stagnation. That’s exactly what happened.
Each era of big government tinkering ends with the the economy being systematically run into the ground by Keynesian policymakers — and with economists pondering whether it’ll always be this way.
“Are you better off today than you were four years ago?” President Reagan famously asked in the 1980 campaign. Today, Americans seem to be saying no.
I hope the new Republican Congress will have the courage to encourage the President (strongly) to change direction.
The charts are taken from a booklet put out by the Republicans on the Senate Budget Committee. The booklet includes another chart which explains the low unemployment numbers that were released today–the workforce has significantly decreased. If the unemployment rate reflected the number of workers that have left the work force, the number would be considerably higher.
Today’s Wall Street Journal posted a story about the latest Gross Domestic Product numbers. The article included the following graph:
The Wall Street Journal reported that the Gross Domestic Product grew at a seasonally adjusted annual rate of 0.1% in the first quarter of 2014.
The article in the Wall Street Journal explains some of the factors responsible for the low economic growth. Some suggested causes were the extremely cold winter which slowed consumer spending, and the sudden drop in exports, declining at a 7.6% pace in the first quarter.
Obviously, this is not the robust economy the President has been claiming.
Ed Morrissey at Hot Air posted an article today about recent economic growth in America. The Bureau of Economic Analysis claimed a moderate economic annualized growth rate of 3.2% last month. The Bureau has now adjusted its numbers, saying that the economy only grew at the stagnation level of 2.4%:
The article reports the following from the Bureau of Economic Analysis:
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent. With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated.
Reuters reports the following:
Consumer spending was cut to a 2.6 percent rate, still the fastest pace since the first quarter of 2012. It had previously been reported to have grown at a 3.3 percent pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, contributed 1.73 percentage points to GDP growth, down from the previously reported 2.26 percentage points.
As a result, final domestic demand was lowered two-tenths of a percentage point to a 1.2 percent rate. The loss of momentum appears to have spilled over into in the first quarter of 2014, with an unusually cold winter weighing on retail sales, home building and sales, hiring and industrial production.
The article at Hot Air concludes:
Weather will be a factor in 2014 Q1, but it wasn’t in 2013 Q4. The economy was stagnating well before the polar vortices arrived, and has been ever since the June 2009 technical recovery. This is just more of the same.
President Obama’s economic policies are not working. Can we please try something else?
I might be a member of the flat earth society. I don”t believe the earth is flat, but I don’t believe that global warming is caused by man either. So Secretary of State John Kerry compares me to a member of the flat earth society. Well, let’s see how John Kerry’s data on man-made global warming stacks up with reality.
This is the chart:
As you can see, the truth has simply not kept up with the scientific predictions.
The Wall Street Journal posted an article yesterday that stated:
“Consensus” science that ignores reality can have tragic consequences if cures are ignored or promising research is abandoned. The climate-change consensus is not endangering lives, but the way it imperils economic growth and warps government policy making has made the future considerably bleaker. The recent Obama administration announcement that it would not provide aid for fossil-fuel energy in developing countries, thereby consigning millions of people to energy poverty, is all too reminiscent of the Sick and Health Board denying fresh fruit to dying British sailors.
Before we take actions that negatively impact the economy of the entire world, we really do need to make sure that the science we are using to justify the actions is valid.
The Stock Market reached record levels today. Normally that would be cause for celebration, but if you look at the reasons behind the rise in the stock market, the news doesn’t look quite so good.
Yahoo Finance reported today that the federal government will continue putting stimulus money into the economy for the near future because the economy is not growing at a satisfactory rate.
The article reports:
The Fed predicted Wednesday that the economy will grow just 2 percent to 2.3 percent this year, down from its previous forecast in June of 2.3 percent to 2.6 percent growth.
Fed officials decided to continue their $85-billion-a-month bond purchase program, surprising most economists, who had expected a slight reduction. The bond purchases have been designed to keep long-term loan rates low to encourage spending.
So what has this got to do with the stock market? Financial people expected the Fed to begin to slow its bond purchases, which would have begun the rise of interest rates. Right now, with interest rates at record lows, and the possibility of inflation, the stock market is a logical place to invest. As the Fed begins to pull back from its bond purchases, the stock market will fall slightly, mortgage rates will increase, and we will probably begin to see some serious inflation.
The stock market is currently being propped up by the Fed. I have not heard any good guesses as to what will happen when the Fed begins to slow down the money flow.