Good Economic News

CNBC is reporting today that America’s Gross Domestic Product grew at a rate of 33.1% annualized during the third quarter. It was anticipated that the growth rate would be 32 %.

The article reports:

Coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together, the Commerce Department reported Thursday.

Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace, according to the department’s initial estimate for the period.

The gain came after a 31.4% plunge in the second quarter and was better than the 32% estimate from economists surveyed by Dow Jones. The previous post-World War II record was the 16.7% burst in the first quarter of 1950.

Markets reacted positively to the news, with Wall Street erasing a loss at the open and turning mostly positive.

The article includes two Tweets that provide insight into the election:

Please note that Joe Biden gives no facts to back up his claims. We are not out of the woods yet with the coronavirus, but we are moving forward. The Democrats in the House of Representatives have chosen to hold the stimulus package hostage to their pet projects to prevent the help to those who need it from being disbursed. I suspect that the funds will be allocated after the election.

Economic Growth In America

Yesterday Just the News posted an article about some recent comments by economist Stephen Moore.

The article reports:

As the U.S. economy rebounds following the coronavirus crisis, the last four months have produced historic levels of job creation for the U.S., economist Stephen Moore said Sunday. 

“May, June, July and August have been the four biggest months of job creation in the history of the United States. We’ve regained over 10 million jobs in four months,” Moore told John Catsimatidis’s radio program on WABC 770 AM, according to The Hill

The outlet noted that despite recent reporting that the unemployment rate has further declined it still remains much higher than it was in January.

It is going to take a while for the economy to recover from the coronavirus lockdown. It is also going to take a while to figure out whether or not the lockdown was actually effective or other actions would have been more appropriate. However, the economy is growing, and will continue to grow if President Trump is reelected. If former Vice-President Joe Biden is elected, taxes will go up, tariffs on China will go down, and economic growth will either stall or stop.

When Principles Depend On Who Is In Power

Yesterday Fox News posted an article detailing the Democrat’s reaction to President Trump’s suggested payroll tax cut. The tax cut is designed to counter some of the economic losses caused by fears over the coronavirus.

The article notes:

Democrats are lining up to condemn President Trump’s proposal to eliminate payroll taxes amid the coronavirus outbreak, even though many of them were lock-step in supporting former President Obama’s two-percent payroll tax cut in 2010.

The apparent flip-flop came as stocks rebounded on Tuesday on news of the president’s coronavirus initiatives, with the Dow posting its third-biggest point gain in history. Trump has called for a “dramatic” payroll tax cut, and Fox News is told there has been consideration of suspending the payroll tax for three months, through the fall, or even through the end of the year.

The article notes the Democrats’ previous stand on this issue:

House Speaker Nancy Pelosi, D-Calif., is working with Democratic leaders on their own stimulus package, and has suggested that a payroll cut likely won’t be included because it amounts to “tax cuts for major corporations.”

However, in a 2011 press release, Pelosi called a brief extension of Obama’s payroll tax cut a “victory for all Americans” and said it would put “nearly $40 per paycheck in the pockets of the average family.”

“Today is a victory for all Americans – for the security of our middle class, for the health of our seniors, and for economic growth and job creation,” Pelosi said at the time. “The American people spoke out clearly and, thanks to President Obama’s leadership, 160 million Americans will continue to receive their payroll tax cut – nearly $40 per paycheck in the pockets of the average family. I salute the work of the unified House Democratic caucus on behalf of the American people.”

The article concludes:

“According to those knowledgeable about the events that played out over less than a week, the agreement was the product of a fast-paced series of telephone contacts, conference calls and consultations with Congressional leaders,” the Times wrote. “A critical negotiation on Sunday led to a surprise cut in employee payroll taxes as the men sought to wrap up the deal.”

For Republicans, the sudden change in tone on payroll taxes as a means of economic stimulus was evidence of election-year opportunism.

“Like clockwork, Democrats never miss an opportunity to oppose President Trump,” Republican National Committee spokesperson Steve Guest told Fox News.

As for the new proposal on Capitol Hill, a source familiar with the proposal tells Fox News that addressing the Trump administration’s payroll tax proposal is “the fastest possible way” to address economic concerns. The source said that crafting proposals such as “unemployment insurance and dropping money out of helicopters” takes months to engineer. But the payroll tax could hit immediately – especially if they include both employers and employees.

The reluctance among some Republicans is a payroll tax cut could explode the deficit. However, Fox News is told that there are concerns that if Congress waits to act amid the declining economy, an even bigger hit to the deficit might result — as large as “a $1 trillion direct score on the deficit.”

Unfortunately the game is played on both sides. I believe there may be a handful of people in Congress who actually put the welfare of the country ahead of the welfare of their political party. I just wish there were more of them. As a country, we need to learn to work together in times of crisis–not simply use the crisis for political gain.

Why I Love The Alternative Media

Yesterday John Hinderaker posted an article at Power Line Blog titled, “Landmark Trade Deal With China; New York Times Hardest Hit.” The article details some of the actual facts of the trade deal and contrasts those details with the reporting of The New York Times.

Some examples:

Reaction was predictably partisan. On CNBC, Steve Bannon said that President Trump “broke the Chinese Communist Party,” and the U.S. “gave up very little in the end.” On the same program, hedge fund manager Kyle Bass said that he sees the agreement as a “‘temporary truce’ in which the U.S. got the better of China.”

At the New York Times, on the other hand, there was wailing and gnashing of teeth:

President Trump signed an initial trade deal with China on Wednesday, bringing the first chapter of a protracted and economically damaging fight with one of the world’s largest economies to a close.

Has the trade conflict with China damaged the U.S. economy? To some degree it has, although it has certainly hurt China’s economy more. This is the kind of short-term pain that Barack Obama, for example, was unwilling to accept. And yet economic growth under President Trump has been considerably better than under Obama.

The deal caps more than two years of tense negotiations and escalating threats that at times seemed destined to plunge the United States and China into a permanent economic war.

No one thought “permanent economic war” was a realistic possibility, except, perhaps, readers of the always-hysterical New York Times.

The agreement is a significant turning point in American trade policy and the types of free-trade agreements that the United States has typically supported. Rather than lowering tariffs and other economic barriers to allow for the flow of goods and services to meet market demand, this deal leaves a record level of tariffs in place and forces China to buy $200 billion worth of specific products within two years.

Phase One reduces or eliminates some tariffs and leaves others in place for Phase Two. This isn’t really all that complicated, but the Times wants its readers to think that Trump’s approach represents a departure from an imagined, purist practice of the past.

Please follow the link above to read the entire article. It is a beautiful example of how the mainstream media takes good news and attempts to make it bad news because it involves an accomplishment by President Trump.

How Does Economic Growth Influence Your Vote?

During the Democrat debate last night, former Vice-President Joe Biden made a very interesting statement.

Townhall reported the following:

Former Vice President Joe Biden stated he is more than willing to “sacrifice” the ongoing economic growth, resulting in the displacement of thousands of blue collar workers, in order to shift towards a more green economy. 

“The answer is yes, because the opportunity, the opportunity for those workers to transition to high paying jobs, as Tom said, is real,” Biden said during the sixth Democratic presidential debate on Thursday.

“We’re the only country that’s taken great, great crises and turned them into enormous opportunities. I’ve met with the union leaders. For example, we should in fact be making sure right now that every new building built is energy contained, that it doesn’t leak energy, that in fact we should be providing tax credits for people to be able to make their homes turn to solar power,” he continued.

Instead of fossil fuel jobs, Biden said there is an opportunity to install 550,000 charging stations across the United States so that the country can own the electric vehicle market. 

“There are so many things we can do. We have to make sure we explain it to those people who are displaced, that their skills are going to be needed for the new opportunities,” Biden added.

I wonder if the former Vice-President understands what it will be like for those workers as he ‘transitions’ the economy. I wonder if he is planning to make their house payments and their car payments. I wonder if he remembers the hardships the Obama administration caused to the coal industry workers in West Virginia. We really cannot afford to elect a President who plans on taking jobs away for the good of the people.

Joe Biden Continues To Say Really Odd Things

CNS News posted an article today about some recent comments by former Vice-President Joe Biden. The former Vice-President made the remarks at the opening of a new campaign office in Iowa.

The article reports:

Biden twice envisioned what could be accomplished with “Trump out of the way”:

    • “Literally, with Donald Trump out of the way, there’s not a thing we can’t do.”
    • “With Trump out of the way, we’ve never been in a better position to lead the world.”

The former Vice-President stated:

“Literally, with Donald Trump out of the way, there’s not a thing we can’t do. Our ability to compete is incredible. We are the wealthiest country in the history of the world. We have more great research universities in America than all the rest of the world combined, and every major life-changing thing that has come out in the last 25 years has come out of one of those universities. We have the greatest researchers in the world. We’re in a position where our workers are, literally, three times as productive as workers in Asia. So, why do we walk around like, ‘Oh, my God, what are we going to do?’ We’re in trouble because of Trump.

“With Trump out of the way, we’ve never been in a better position to lead the world in the 21st century and restore America’s integrity and word around the world. So folks, that’s why I’m running. That’s what I hope we’re going to be able to do. We have enormous capacity. Thank you, thank you for being here. I promise you, you’re probably going to see more of me than you want to see, but I plan on winning Iowa.”

The article concludes:

Biden did not mention that Trump had not been in his way during the eight years Biden served as vice president in the Obama Administration.

I guess the former Vice-President hasn’t realized that our current economic growth began when he and President Obama got out of the way.

The Numbers Are In

CNBC is reporting today that nonfarm payrolls rose by 128,000 in October, exceeding the estimate of 75,000 from economists surveyed by Dow Jones.

The article notes:

There were big revisions of past numbers as well. August’s initial 168,000 payrolls addition was revised up to 219,000, while September’s jumped from 136,000 to 180,000.

The unemployment rate ticked slightly higher to 3.6% from 3.5%, still near the lowest in 50 years.

The pace of average hourly earnings picked up a bit, rising 0.1% to a year-over-year 3% gain.

The article also reports:

Central bank leaders have largely praised the state of the U.S. economy, particularly compared with its global peers. The Fed earlier this week lowered its benchmark interest rate a quarter point, the third such move this year, but Chairman Jerome Powell clearly indicated that this likely will be the last cut for some time unless conditions change significantly.

“The October jobs report is unambiguously positive for the US economic outlook,” said Citigroup economist Andrew Hollenhorst. “Above-consensus hiring in October, together with upward revisions to prior months, is consistent with our view that job growth, while clearly slower in 2019 than in 2018, will maintain a pace of 130-150K per month. Wage growth remaining at 3.0% should further support incomes and consumption-led growth.”

The economic policies of President Trump have resulted in significant economic growth for America. American workers at all levels are enjoying the benefits of these policies. The decision for the voters in 2020 will be whether or not they choose to continue this economic growth.

Success Often Breeds Success

When President Trump campaigned for President, he said he wanted to redo America’s trade deals and bring manufacturing back to America. He has renegotiated the trade deals. Congress has yet to approve the deal with Mexico and Canada, but a lot of manufacturing has returned to America. The Washington Times posted an article today about public opinion of President Trump’s trade policies.

The article reports:

“Bipartisan consensus has emerged that foreign trade is good,” wrote Gallup senior analyst Lydia Saad. “Americans’ broad view of trade is the most positive it has been in more than a quarter-century.

…“Both Republicans and Democrats have become more positive about trade over this period of improving economic conditions,” she noted. “However, support for trade among both groups jumped sharply after Trump took office in 2017.”

The 2019 poll numbers now reveal:

• 70% of Americans say trade with other nations has a positive effect on “innovation and development of new products.”

• 67% say international trade has a positive effect on U.S. economic growth.

• 63% say trade has a positive effect on American businesses,

• 58% say trade has a positive effect of the quality of products.

• 51% say trade has a positive effect on jobs for U.S. workers.

I wonder if the positive results of President Trump’s policies will be reflected in the 2020 election.

 

 

 

The Delusional Candidate

Yesterday One America News posted an article detailing some recent statements by presidential candidate Joe Biden.

The article reports:

Joe Biden is campaigning to roll back President Trump’s tax cuts. The former vice president made his case Wednesday in his hometown of Scranton, Pennsylvania.

Biden touted his middle class background and announced his intent to hike the corporate tax rate from 21 percent to 28 percent. He claimed the repeal would help the middle class by hitting the wealthy and corporations.

“The wealthy didn’t need [tax cuts] in the first place,” said Biden. “Corporations have spent them on stock buybacks.”

Then Joe Biden claimed that former President Obama is responsible for the current economic success in America:

“Donald Trump inherited a strong economy from Barack and me,” stated the former vice president. “Things were beginning to really move — just like everything else he’s inherited, he’s in the midst of squandering it.”

The article then notes the actual economic facts:

Recent data from the Census Bureau revealed the middle class has experienced an economic boom since President Trump took office. The average family income rose over $5,000 since 2017. Under the Obama administration, household incomes only grew by about $1,000 by the end of eight years.

The main things that increased in the Obama economy were unemployment and the number of people on food stamps. Admittedly, President Obama became President at a difficult economic time, but his policies resulted in the slowest and leanest economic recovery in American history. President Trump’s economic policies have resulted in economic growth in all segments of the economy. The middle class and all minorities are enjoying higher wages and more jobs. A return to the economic policies of President Obama would be a step backward–not a step forward.

Good Economic News For Americans

According to Investopedia:

A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. FICO scores take into account various factors in five areas to determine creditworthiness: payment history, current level of indebtedness, types of credit used, length of credit history, and new credit accounts.

Yesterday The Federalist posted an article about how the Trump economic policies have impacted the FICO scores of Americans.

The article reports:

Americans’ average FICO score has hit an all-time high of 706 on the personal credit rating scale. Ethan Dornhelm, the vice president for scores and analytics at FICO, told CBS News that a score of more than 700 basically qualifies individuals for just about any credit at favorable terms.

FICO scores range from 300 to 850. A score above 700 is considered great, and a score above 760 is considered excellent. This high national credit score may be largely attributed to the strong economy, with its historically low unemployment rate, and the Tax Cuts and Jobs Act.

“This record-long stretch of economic growth has helped minimize reliance on debt to pay the bills,” said Joel Griffith, a research fellow at The Heritage Foundation. “Low interest rates help ensure a greater portion of loan payment goes to paying down principal rather than merely making interest payments.”

Creditworthiness is now increasing, which means Americans have the ability to rely on their paychecks, not just borrowing from their futures, to fulfill their financial obligations.

Americans’ average FICO score hit a low during the financial downturn of 2008, with a score of 686. After the recession passed, the nation’s average FICO score continuously grew.

Is giving Americans more access to larger lines of credit such a good thing? According to Griffith and Federal Reserve Bank data, U.S. household debt is also declining. Even now that Americans are able to take on more debt, they are not. They’re paying off their credit cards and increasingly lowering their other debt.

Unfortunately, this national accomplishment has not been a topic discussed among 2020 Democratic nominees. Why have the Democratic presidential candidates shied away from talking about the economy? Because, they call for an economy that “works for everyone,” when the current system is working for more people than ever before.

A Gallup poll shows that 88 percent of Americans believe the current U.S. economy is either “fair,” “good,” or “excellent.” That’s because this economy has provided 5.1 million new jobs and dropped the unemployment rate to 3.7 percent — the lowest rate in nearly half a century.

Leadership and economic policies make a difference to ALL Americans. The tax cuts and economic policies of President Trump have ‘worked for everyone.’ The government cannot create an economy the ‘works for everyone’ by taking money from people who earn it and giving it to people who did not earn it. An economy  that ‘works for everyone’ is created when everyone has the opportunity to find a job or start a company and create their own success.

We Need To Get Healthcare Right

Yesterday Issues and Insights posted an article about ObamaCare 10 years out.

The article reports:

Based on polling data, Obamacare has been a miserable failure, and Obama will be far from the last president to grapple with this issue.

The most recent Wall Street Journal/NBC News poll finds that health care is at the top of the nation’s priority list, with 24 percent of respondents listing it as their top priority for the federal government. Next on the list is immigration, at 18 percent, and after that, economic growth at 14 percent. 

The poll also found that 42 percent list health care as either their first or second choice on the priority list.

Back in June 2008, when Obama was running for president, only 8 percent rated health care as a top priority, just 20 percent as their first or second priority. Of course, the economy was in a recession and the country at war with Iraq, both of which weighed heavily on the public’s mind at the time.

But even in earlier years when the economy was doing well, health care ranked far lower on the list of priorities than it does today. In June 2006, only 14 percent ranked it as No. 1 on their list. A year later, 15 percent said it was their top priority.

The public has not been impressed with ObamaCare:

An ongoing Gallup survey finds that the public was actually more satisfied with their own coverage and quality of health care in 2007 than they were in 2018. Other surveys find cost remains a major complaint.

The article lists a few problems with ObamaCare:

It has done nothing to slow, much less reverse, the rising cost of health care. In fact, Obamacare itself caused premiums in the individual market to more than double in its first four years.

…National health spending, which was 16.3 percent of GDP in 2008, is now 17.9 percent and is slated to hit 19.4 percent by 2027. Per-capita spending on healthcare jumped from $7,898 to $10,739 over those years.

Far from driving the deficit down, Obamacare is pushing federal red ink up. The Congressional Budget Office has calculated that repealing Obamacare would cut the deficit by some $473 billion in the first 10 years

Rather than admit failure, the Democrats simply want to throw more money at it.

The article concludes:

Naturally, because of these failures, the Democrats’ answer is to dump even more taxpayer money into government-run health care programs, with most now favoring a $32 trillion plan developed by socialist Bernie Sanders to have the government nationalize the entire health insurance industry.

Only in government, and only among fans of big government, are massive failures like Obamacare rewarded with still more government. 

The Economy Is Humming Along

CNBC is reporting today that the economic news for April is very good.

The article reports:

The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday.

Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate.

Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. The monthly gain was 0.2%, below the expected 0.3% increase, bringing the average to $27.77. The average work week also dropped 0.1 hours to 34.4 hours.

Unemployment was last this low in December 1969 when it hit 3.5%. At a time when many economists see a tight labor market, big job growth continues as the economic expansion is just a few months away from being the longest in history.

The growth in the economy is the result of economic policies put in place by President Trump–tax cuts, revised trade deals, cuts to regulations, and generally making the economy more welcoming to companies who want to do business in America.

The article concludes:

GDP increased 3.2% during the first quarter, far exceeding expectations, while productivity during the quarter jumped 3.6% for its best gain in five years. Pending home sales rose 3.8% in March, providing some hope in the real estate market so long as rates are held in check.

Earlier this week, the Federal Reserve held the line on its benchmark interest rate, characterizing economic growth as solid even as inflation remains tame. The central bank watches metrics like the nonfarm payrolls report closely for clues both on job creation and wage pressures.

Fed Chairman Jerome Powell said current indications point to a prolonged period of holding pat on increases or decreases in rates. President Donald Trump has said he wants the Fed to cut rates by a full percentage point.

The economy plays a big role in deciding elections. None of the policies espoused by the current group of Democrat Presidential candidates for 2020 will continue this economic growth.

The Free Market Is Good For The Environment

The Washington Examiner posted an article today about air pollution in America.

The article cites the successes America has had in curbing air pollution in our country:

Over the last 50 years, harmful air pollution known as particulate matter has plummeted. Toxic pollutants like lead, sulfur dioxide, and carbon monoxide are now nearly nonexistent in our air. Ozone is down dramatically. We’re the only highly populated nation in the world to meet the World Health Organization’s standards for particulate matter and by a long shot. In fact, our standards are among the strictest in the world.

These radical air quality gains occurred at the same time our population, energy consumption, vehicle miles traveled, and gross domestic product also grew dramatically.

Economic growth does not have to be crippled in order to create a clean environment–in fact, economic growth can be used as an engine to promote a clean environment.

The article explains:

Take the catalytic converter, which turns toxic exhaust into harmless gases, like water vapor, by catalyzing a chemical reaction. It was perfected for use in gasoline engines in the 1950s by Eugene Houdry, a French scientist who became a U.S. citizen in 1942, and was popularized in the 1970s as an efficient way to meet the Clean Air Act standards.

According to the EPA, which calls the catalytic converter “one of the greatest environmental inventions of all time,” modern cars, SUVs, trucks, and buses are 98-99% cleaner now than they were 50 years ago. Tailpipe pollutants have nearly been eliminated, meaning our cities are no longer stifled by smog. We’re free to take advantage of the independence, mobility, and economic opportunity personal vehicles offer without sacrificing environmental quality.

That’s good old American ingenuity at work. It continues to work today in technologies like baghouse dust collectors that eliminate pollution from commercial plants and renewable natural gas generation from methane captured from landfills or wastewater treatment plants. The limitless potential of the free market and innovation, not government mandates and taxes, have driven both our economy and environment to dramatic success.

All this is made possible by access to abundant, reliable, and affordable energy. Our energy resources have the power to improve our quality of life, power our economies, and lift people out of poverty both at home and abroad, all while improving the environment. Nothing is more powerful to drive human flourishing than energy.

We don’t have to ruin the American economy to prevent being wiped out in twelve years.

Anyone who believes that the radical agenda of the environmentalists is actually about the environment needs to consider the following quote from an Investor’s Business Daily article of March 29, 2016:

…listen to the words of former United Nations climate official Ottmar Edenhofer:

“One has to free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with the environmental policy anymore, with problems such as deforestation or the ozone hole,” said Edenhofer, who co-chaired the U.N.’s Intergovernmental Panel on Climate Change working group on Mitigation of Climate Change from 2008 to 2015.

So what is the goal of environmental policy?

“We redistribute de facto the world’s wealth by climate policy,” said Edenhofer.

Wake up and listen to what the people who are pushing drastic environmental regulations are really supporting.

The Numbers On The Economy

On March 13th, CNBC posted at article about the impact of President Trump’s economic policies on wages.

The article reports:

The recent jump in paychecks has come with an unusual characteristic, as workers at the lower end of the pay scale are getting the greater benefit.

Average hourly earnings rose 3.4 percent in February from the same period a year ago, according to a Bureau of Labor Statistics report last week. That’s the biggest gain since April 2009 and seventh month in a row that compensation has been 3 percent or better.

What has set this rise apart is that it’s the first time during an economic recovery that began in mid-2009 that the bottom half of earners are benefiting more than the top half — in fact, about twice as much, according to calculations by Goldman Sachs. The trend began in 2018 and has continued into this year, and could be signaling a stronger economy than many experts think.

The article concludes:

“Taken together, our findings suggest a relatively optimistic consumption outlook given solid income growth across income levels,” Choi wrote. “Even if employment growth slows as labor supply constraints start to bind, this should be partially offset by the continued firming of wages, particularly among lower income workers with higher marginal propensities to consume.”

One danger is that higher wages could start to eat into corporate profits, which have doubled since the financial crisis.

However, it could take years for that to be a significant factor, according to an analysis by AB Bernstein.

“While pressure on capital share is likely to remain, that doesn’t mean that profits are going to fall – in fact profits can lose share at a rate up to about 100bps per year [1 percentage point] and still expect to have positive profit growth,” Philipp Carlsson-Szlezak, chief U.S. economist at AB Bernstein, said in a note. “In other words, overall expansion of net value add can be strong enough to protect profit growth even in the face of a rising labor share.”

Carlsson-Szlezak said wage pressures more likely would be felt at a sector level in industries where labor takes a bigger share of output. For example, information technology and extraction likely would feel the least effects, while hospitality and retail would be hit hardest.

The piece of the puzzle that is missing to ensure a continuing strong economy is getting the federal deficit under control. Unfortunately Congress has been unwilling to do this. If it is not done fairly quickly, all of the positive economic growth we have seen under President Trump will evaporate.

Revising The Numbers

Economists seems to have a problem lately correctly predicting economic growth. They always seem a bit surprised when the numbers come in higher than what they predicted. Well, it has happened again.

The Gateway Pundit is reporting the following today:

The fourth quarter GDP number was released on Thursday and beat expectations at 2.6%Economists expected a 2.2% GDP rate.

CNBC says the GDP report was only preliminary, it would mean average growth for the year was 3.1 percent.

...Ronald Reagan brought forth an annual real GDP growth of 3.5% . Barack Obama, with his abysmal policies, was lucky to average a GDP growth rate of slightly greater than 1%.

Obama ranked as the fourth worst presidency on record in GDP growth at 1.457% . Only Herbert Hoover (-5.65% ), Andrew Johnson (-0.70% ) and Theodore Roosevelt (1.41% ) had lower average annual GDP growth than Barack Obama.

The Commerce Department announced in the first quarter of 2016 that the US economy expanded at the slowest pace in two years with a GDP growth rate of an anemic 0.5% . The second quarter GDP growth rate was not much better at 1.2% . (The 3rd quarter GDP rate was not yet announced by the time we drafted our post before the 2016 election.)

…Barack Obama was the first President ever to never surpass an annual rate of 3% GDP growth!  This resulted in Obama being rated the worst economic President ever!

Obama’s Congressional Budget Office (CBO) forecast in 2016 that America would never see 3.0% economic growth again. They had given up and Hillary was their candidate.

President Trump did win the election in 2016 and his Director of the White House National Economic Council Larry Kudlow said in early December that the U.S. economy is growing at a rate greater than 3% –

This is good news for people in the job market and people entering the job market. Jobs are becoming more plentiful and salaries are rising.

The Power Of The Media Illustrated

This is the current polling from RealClearPolitics:

This is some recent economic news reported by The Washington Times on January 9:

Given the dazzling December economic data, it’s no wonder the press gave it short shrift. According to the U.S. Bureau of Labor Statistics, the economy added a whopping 312,000 jobs, far more than the expected 176,000. After revisions, job gains have averaged an impressive 254,000 per month over the past three months. Job growth in 2018 (an average of 220,000 per month) passed that of both 2016 (195,000) and 2017 (182,000). Payrolls increased by 2.6 million in 2018, the highest since 2015.

The sunny jobs picture encouraged 419,000 new workers to enter the workforce and sent the labor force participation rate up to 63.1 percent. Unemployment rates among blacks, Latinos and women are at or near historic lows.

Job growth has also meant significant wage growth. Wages are up a stunning 3.2 percent from last year and .4 percent from November. December was the third straight month that the yearlong growth in nominal average hourly earnings was above 3 percent in nearly a decade; the last time we saw that trend was April 2009. Wages are also being given an assist by inflation being kept in check.

The article at The Washington Times concludes:

His (President Trump’s) astounding economic track record is their worst nightmare. It puts the lie to the nonsense Mr. Obama, the Democrats and the media have been shoveling for years: That anemic economic growth, high unemployment, the collapse of manufacturing and grotesque trade imbalances were the “new normal.”

It also pointedly demonstrates that the statist vision — radical wealth redistribution, socialized medicine, green energy chimeras, social justice enforcement, limits on free speech, private property and gun ownership, and the rule of the leftist mob — creates only tyranny, poverty, injustice and servitude. (Note the deflection: These are things the left claims to want to eradicate.)

Mr. Trump and his economic thunderbolt are exposing the left and its policies as irredeemably bankrupt, economically and morally. And that is perhaps the biggest reason why they must try to destroy him.

A lot of this economic news has not been reported. However, people do notice when there are more jobs available and there is more money in their paycheck. President Trump’s approval numbers are finally in positive numbers. The economy is booming. What would be the basis for most Americans believing America is headed in the wrong direction? Might it be the constant negative reporting from the media? Can you imaging what President Trump’s approval rating would be if the media were actually balanced? Just remember–the people vote. The media represents only a small percentage of votes.

Crony Capitalism Stopped In New York City

Heritage.org posted an article today about Amazon’s decision not to locate in New York City.

The article reports:

Based on Amazon’s public statement, it seems the company couldn’t rely on the deals it had cut or the political support it had received to last beyond the next election. And businesses can’t base long-term decisions like this on shifting political sand.

That’s part of the problem with crony capitalism. It may procure short-term wins for a select few politicians and for businesses that can afford to pay to play, but it’s not a strategy for long-term success.

Employers want to set up shop in places where they can grow and succeed. The best environment for that is a level playing field with minimal government interference and low, broad-based taxes—not picking winners and losers through special-interest subsidies

A favorable business environment is one where local leaders work to help all businesses equally, not a select few. Employers want leaders who can listen to their needs without telling them how to run their business, and they want communities and leaders that welcome the jobs and economic growth that employers bring, instead of protesting their presence. 

It turns out this is not what New York City had to offer. Amazon said that certain politicians “made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.”

New York City is not a friendly business climate, and losing those special “relationships” would have left it exposed to the same burdens and barriers that other businesses face in New York. 

For most businesses, deciding where to locate really all comes down to the bottom line.

The article notes that businesses and people are leaving New York:

According to the ALEC-Laffer State Economic Competitiveness Index, “Rich States, Poor States,” New York ranks dead last in the overall economic outlook ranking, while Virginia ranks among the top 10. 

And Amazon isn’t the only company wary of locating in New York. Plenty of individuals, families, and businesses are fleeing the state, and they’re taking their income and tax revenues with them. 

In fact, between 1997 and 2016, every dollar of income that left New York was replaced by only 71 cents coming in. That deficit will only continue under New York’s current policies.

The article concludes:

States and cities should also take a lesson from this New York episode: Crony capitalism isn’t the way to win over more business. The key is to provide a level playing field that offers opportunity for all businesses to grow and thrive.

The Workforce Participation Rate

Yesterday CNS News posted an article about the January Workforce Participation Rate. This is the number of people in America either working or looking for jobs. When President Obama took office in January 2009, the Workforce Participation Rate was 65.7. That number dropped to a low of 62.4 in September 2015 and began slowly climbing, reaching a high of 62.9 in September 2016. The number hovered around there for a while until finally reaching 63.2 in January 2019.

Here is the chart from the Bureau of Labor Statistics:

The article at CNS News reports:

The Labor Department’s Bureau of Labor Statistics said the economy added 304,000 jobs last month, higher than analysts were expecting.

The number of employed Americans, 156,694,000, was slightly below last month’s record (156,945,000), and the unemployment rate increased a tenth of a point to 4.0 percent.

But the labor force participation rate increased a tenth of a point to 63.2 percent — the highest it’s been on President Trump’s watch.

The CNS News article included an excerpt from the Congressional Budget Report released this week:

According to CBO:

Employment: Nonfarm payroll employment is projected to grow by an average of 148,000 jobs per month in 2019, a decline from 213,000 jobs/month in 2018 but “still a healthy pace of job growth at this stage of the business cycle.”

Unemployment rate: The unemployment rate, now at its lowest point since the 1960s, is projected to fall from 3.8 percent in the fourth quarter of 2018 to 3.5 percent by the end of 2019. The anticipated decline in the unemployment rate reflects a continued increase in the demand for labor, which will reduce the number of unemployed workers in the labor force this year.

CBO said the demand for labor and the resulting upward pressure on compensation also encourages people to remain in the labor force or rejoin it, making the labor force larger and thus moderating the decline in the unemployment rate.

Labor force participation: The labor force participation rate, which has hovered around 62.8 percent since 2014, is expected to remain close to that rate during the next two years.

CBO explained that the stability of the labor force participation rate in recent years reflects the balancing of two opposing forces: sustained economic growth, which continues to encourage additional workers to enter the labor force and currently employed workers to stay on the job; and long-run shifts in demographics (particularly the aging of the population).

Labor compensation. After several years of prolonged weakness, wage growth accelerated notably in 2018, CBO noted. Over the next few years, labor compensation is expected to rise further as employment remains at elevated levels and firms must compete for a relatively small pool of unemployed or underemployed workers.

In CBO’s projections, annual growth of the employment cost index for wages and salaries of workers in private industry averages 3.5 percent between 2019 and 2023, slightly more rapid than its 3.3 percent pace in 2018 and considerably more rapid than the 2.0 percent average from 2009 to 2017.

President Trump’s economic policies are working. If he is allowed to continue those policies with a Democrat House of Representatives, he will be re-elected in 2020, so prepare to see the House of Representatives attempt to roll back many of those policies.

Prepare For A Very Ugly Year In The House Of Representatives

You can tell a lot about what is going on in the House of Representatives by the committee assignments. Based on the assignments being given out now, this is going to be a very ugly year. We have already seen two news stories in the past week that were an indication that facts don’t matter. We are going to see many more of those stories in the near future; and those stories, whether true or false, will be the excuse for the Democrats to begin impeachment proceedings against President Trump in the House of Representatives. The Democrats would do well to remember what happened to the Republicans after they tried to impeach President Clinton. What the Democrats need in order to avoid paying a heavy penalty for this move is to get President Trump’s approval ratings below 30 percent. They were able to do that with previous Republican presidents, but President Trump keeps fighting back (and the economy is providing jobs for people who might otherwise be disgruntled).

Yesterday Politico posted an article detailing some of the committee assignments that are relevant to the impeachment process.

The article reports:

The House Oversight Committee is adding a group of progressive flamethrowers to its ranks.

Reps. Alexandria Ocasio-Cortez (D-N.Y.), Rashida Tlaib (D-Mich.), Ayanna Pressley (D-Mass.) and Ro Khanna (D-Calif.) won spots on the high-profile committee on Tuesday, two sources told POLITICO.

…The new members, all of whom are freshmen except Khanna, have been critical of President Donald Trump, and their addition to the committee comes as Democrats have pledged to launch wide-ranging investigations into the president and his administration.

Tlaib drew swift backlash when she vowed to “impeach the motherf—er,” referring to Trump. Republicans have discussed a censure for Tlaib for railing against Trump.

Not only did the Democrats not chastise Representative Tlaib–they rewarded her behavior!

The article continues:

Rep. Elijah Cummings (D-Md.), the chairman of the Oversight Committee, dismissed concerns about the outspoken freshman lawmakers.

“If I based the choices going on the committee based on what people said or their reputations or whatever, I probably wouldn’t have a committee,” Cummings told POLITICO. “I am excited — there were a lot of people that wanted to come on our committee.”

…Rep. Dan Kildee, a member of the Democratic steering panel, said he was excited about the progressive picks.

“I want people to be aggressive, especially on that committee. It’s good to have people who aren’t afraid,” the Michigan Democrat said in an interview. “They’re going to be dealing with some pretty important stuff.”

The Democrats are continuing their effort to bring down a duly-elected President and totally undermine our representative republic instead of actually passing laws that will continue our strong economic growth. How sad.

Watch Out For The Bright, Shiny Object

Rightwinggranny is a little more than ten years old. I have learned a few things along the way. One of those things is that when the media is screaming headlines in unison, there is probably something going on behind the scenes that I need to be aware of. This article is an example of that.

On January 16th, Breitbart reported that New York Democratic Representative Alexandria Ocasio-Cortez will be serving on the House Financial Services Committee. The Committee is led by Representative Maxine Waters, a Democrat from California.

Representative Ocasio-Cortez has made some remarks that indicate she may not totally understand exactly how America’s Representative Republic works, but that’s okay–she still got elected. So let’s look at who supported her election. Opensecrets.org is a website that tracks political campaign donations, The link I highlighted leads to information on the funding of Representative Ocasio-Cortez’s campaign for the House of Representatives. There is nothing illegal here, but it is always interesting to see where a candidate gets their funding.

The campaign funding information on Representative Ocasio-Cortez shows that during her primary campaign, two-thirds of the donations came from small donors. She may not fully understand how our government works, but she did a very good job or organizing a campaign. Eighty-eight percent of the large donations to her campaign (over $200) came from outside her district. From the time she won the primary election until the end of June, she received $70,000 from out-of-state donors. How does a newcomer to politics build that kind of a political machine? Who were the people who helped her organize her campaign? I don’t have answers to those questions.

So why is it significant that Representative Ocasio-Cortez has been appointed to the House Financial Services Committee? That is the committee that oversees big banking, lending, and the financial sector. Representative Ocasio-Cortez has already expressed an interest in looking into the student loan crisis (a crisis created when the government took over student loans). It is quite possible that the committee will attempt to undo the deregulation President Trump has done that has led to the economic growth we are experiencing. Hopefully the Senate can protect our booming economy.

The other significant appointment you might not have heard about is the appointment of Representative Ilhan Omar from Minnesota to the House Foreign Affairs Committee. (You can read more about Ilhan Omar at Power Line Blog.) 

Breitbart posted an article about the appointment yesterday.

The article reports:

Omar supports the boycott, divestment, and sanctions (BDS) movement against Israel, which has been called antisemitic because it singles out the Jewish state for isolation and ignores the Palestinian side.

…House Minority Leader Kevin McCarthy (R-CA) issued a statement in which he reminded Pelosi that she said Congress “must” oppose BDS, and that Schumer had called BDS “anti-Semitism.”

“I would love to know what changed, because Democratic leaders just promoted a pro-BDS Democrat to a key committee that deals with the State of Israel.”

McCarthy continued: “Anti-Semitism has no place in Congress and certainly not on the House Foreign Affairs Committee.”

House Minority Whip Steve Scalise (R-LA) blasted Pelosi for appointing Omar to the committee, saying she had a “documented history of making anti-Semitic and anti-Israel remarks.”

He added: “House Democrats have now just endorsed that ideology.”

This appointment may simply be a reflection of the ongoing battle between Nancy Pelosi and President Trump as to who is going to lead the country. However, both of these appointments represent a very severe left turn on the part of the Democrats in the House of Representatives. It remains to be seen if Americans will support this extreme left turn.

How Is The Economy Doing?

The mainstream media spends a lot of time criticizing President Trump. He is characterized as someone who is totally incompetent, undisciplined in his decision making, volatile, stupid, uneducated, etc. Yet it is somewhat amazing what this man has accomplished in less than two years–with the drag of constant accusations and investigations, a hostile press that simply ignores anything he has accomplished, and a Congress that has been less than supportive.

The Conservative Treehouse posted an article today that highlights how the Trump economy is doing.

Here are some of the highlights:

As CTH anticipated the first tabulated holiday sales report via Mastercard® shows the results of a very strong consumer confidence level.  The first report highlights a very strong 5.1% increase in holiday purchases:

“Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade”…

~ Craig Johnson, president of Customer Growth Partners

…Wall Street is being impacted by their multinational reliance which is heavily weighted toward global investments. Main Street is driven by the actual U.S.A. checkbook economic factors. This is the modern disconnect. After decades of Wall Street companies investing overseas, and generating investment products that are fundamentally detached from the U.S. economy, they do not benefit from a strong U.S. economy. However, Main Street directly gains from internal U.S. economic growth.

…If you understand the basic elements behind the new dimension in American economics, you already understand how three decades of DC legislative, monetary and regulatory policy was structured to benefit Wall Street and not Main Street. The intentional shift in monetary policy is what created the distance between two entirely divergent economic engines.

The support of Main Street instead of Wall Street is one of many reasons the Washington establishment hates President Trump. Under establishment politicians Wall Street and rich investors have done very well in recent years–at the expense of Main Street. President Trump has changed that. I strongly suggest that you follow the link and read the entire article at The Conservative Treehouse. It explains in detail how President Trump’s economic policies have changed the dynamics of the American economy.

The article concludes:

Bottom Line: U.S. companies who have actual connection to a growing U.S. economy can succeed; based on the advantages of the new economic environment and MAGA policy, specifically in the areas of manufacturing, trade and the ancillary consumer benefactors.

Meanwhile U.S. investment assets (multinational investment portfolios) that are disconnected from the actual results of those benefiting U.S. companies, and as a consequence also disconnected from the U.S. economic expansion, can simultaneously drop in value even though the U.S. economy is thriving.

The American economy is improving for average Americans. The elites who have profited greatly in recent years while the rest of us struggled do not like that. Be prepared for an outright onslaught of negative news about President Trump as the middle class continues to prosper.

Raising Interest Rates Is Not The Right Move

Interest rates were kept artificially low during the Obama administration. This resulted in lower interest payments on the national debt, which increased from $7.27 trillion in 2009 when President Obama took office to $14 trillion at the end of fiscal 2016. The current national debt is $16 trillion. Increasing interest rates from 2.25 percent to 2.50 percent increases the amount of money all taxpayers will have to pay as interest on that debt.

Breitbart reported today:

“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2‑1/2 percent,” the Federal Reserve announced. The Fed indicated the possibility of just two rate hikes in 2019.

The Dow Jones industrial average rose leading up to the announcement.

Predictions looked toward a likely rate hike ahead of the announcement and possible signaling to a slowing of potential future rate hikes. USA Today reported ahead of the announcement, “Most Wall Street pros expect the Fed, as it has signaled, to hike its key rate another quarter point to a range of 2.25 percent to 2.50 percent. This would be the fourth increase this year and ninth since late 2015.”

The Federal Reserve is not a government agency. They are supposed to be apolitical, but their actions in recent years bring that into question. Lower interest rates during the Obama administration kept the stock market high, paid dividends to those on Wall Street and any well-connected politicians. It provided the appearance of an okay economy despite decreases in the Workforce Participation Rate and the rapidly shrinking middle class. Since President Trump took office, the middle class is growing, and the Workforce Participation Rate is slowly climbing. This rate increase will increase the amount of money needed to pay interest on the national debt and will be a drag on the economy. I don’t mean to be cynical, but I believe that is by design. The Federal Reserve is part of the political establishment that does not want to see the economic success of President Trump’s economic policies. President Trump is not a member of the political establishment, and it will be more difficult to get rid of him in 2020 if the economy is growing. The rate hikes announced today will put a damper on economic growth. The question will be how much of a damper.

 

The Real Numbers

Yesterday Investor’s Business Daily posted an editorial about the federal deficit and federal revenues. The numbers tell a very different story than the one the media would have you believe.

The editorial reports:

The latest monthly budget report from the Congressional Budget Office shows the deficit jumping $102 billion in just the first two months of the new fiscal year.

…A true apples-to-apples comparison, the CBO says, shows that the deficit climbed by just $13 billion.

So, no, the deficit is not soaring.

The editorial explains:

In fact, the CBO report shows that overall tax revenues climbed by $14 billion in the first two months of the year, compared with the same months last year. Which means they continue to hit new highs.

The CBO report shows that combined income and payroll taxes were the same in the first two months of the new fiscal year as they were last year. That’s even though far less money was withheld from paychecks thanks to the Trump tax cuts.

It also found that corporate income taxes went up by $5 billion. That’s despite the “massive corporate tax giveaway” that Democrats want to repeal.

Why are these revenues flat or up? Simple: The tax cuts help spur accelerated economic growth, which create jobs and spark income gains. More workers and higher wages mean more tax revenues. On the corporate side, a bigger economy means more profits, which even when taxed at lower rates can produce more revenue. This is exactly what advocates of Trump’s pro-growth tax cuts said would happen.

Meanwhile, revenue from “other sources” climbed by $8 billion. (To be clear, at least some of that $8 billion came from the re-imposition of ObamaCare’s nefarious tax on insurance premiums, which Congress had suspended the year before.)

But while revenues climbed by $14 billion, spending in the first two months of the new fiscal year climbed by $27 billion.

The obvious solution to the deficit problem is to limit spending. If we can’t agree on that, we could lower taxes again to increase revenue further, but I suspect that would really cause some Congressional heads to explode.

The Election Of Donald Trump Signaled A Change

Donald Trump became America’s President despite long odds. Hillary Clinton was considered to be the President-elect by almost everyone up until we actually voted. So what happened? Many Americans are looking past the news the mainstream media has been feeding them and looking around. They have reached the point where they are choosing to believe what they see rather than what they are being told. As the middle class of America struggled under the Obama administration, those in the bureaucracy increased in number and prospered. The richest counties in America are adjacent to Washington, D.C. That is not a coincidence. The political and media elite are looking out for their own interests while ignoring the well being of their fellow countrymen. Those countrymen elected Donald Trump. Those feelings are not unique to America. They recently erupted in France.

The Wall Street Journal posted an article yesterday about the recent riots in France. The straw that broke the camel’s back was the drastic increase in the gasoline tax, but that was the straw–the issue is much bigger.

The article reports:

Nothing reveals the disconnect between ordinary voters and an aloof political class more than carbon taxation.

The fault line runs between anti-carbon policies and economic growth, and France is a test for the political future of emissions restrictions. France already is a relatively low-carbon economy, with per-capita emissions half Germany’s as of 2014. French governments have nonetheless pursued an “ecological transition” to further squeeze carbon emissions from every corner of the French economy. The results are visible in the Paris streets.

President Emmanuel Macron and his Socialist predecessor François Hollande targeted auto emissions because they account for about 40% of France’s carbon emissions from fuel combustion compared to 21% in Germany. But this is mainly because France relies heavily on nuclear power for electricity. Power generation and heating account for only 13% of French emissions, compared to 44% across the Rhine. French road-transport emissions were a mere 0.4% of global carbon emissions in 2016, when overall French emissions were less than 1%.

Yet Paris insists on cutting more, though transport emissions are notoriously hard to reduce. Cleaner engines or affordable hybrids have been slow to emerge. Undeterred, Mr. Macron pushed ahead with a series of punitive tax hikes to discourage driving.

If you still believe that the climate change movement is about climate, I would like to share the following from a previous rightwinggranny article:

Green For All acknowledges the need to disrupt the current economy, because we understand that our current economy was based upon human trafficking, the exploitation of labor, and violent racism,” according to the group’s website. “We are safe enough to be invited into spaces where power-building groups are not, and radical enough to push a deeply justice-based agenda in those spaces. We are radical enough to partner with grassroots organizations when other national groups are turned away, and enough of an ally to offer resources and support in those spaces.”

In case you were wondering, a deeply justice-based agenda means that the United Nations would be in charge of all political and economic activities of its members. There would be a movement toward socialism and a great loss of the freedoms we enjoy in America and in other western countries. The French were right to revolt.

Putting Politics Before The Welfare Of Americans

Yesterday Investor’s Business Daily posted an editorial about the coming Congressional session. The title of the editorial is, “Market Turmoil Shows Why Trump’s Pro-Growth Policies Must Continue.”

The editorial explains:

Kudlow (President Trump’s top economic advisor, Larry Kudlow) tried to calm the waters. “Corrections come and go,” he told reporters at the White House. “I’m reading some of the weirdest stuff how a recession is in the future. Nonsense. Recession is so far in the distance I can’t see it. Keep the faith. It’s a very strong economy.”

Let’s be clear. Economic forecasts have been overly pessimistic for most of the Trump administration, with actual results consistently coming in “unexpectedly” higher than forecast. And Kudlow is right. There’s no sign of a recession on the horizon.

The editorial points out the indications of a strong economy and the steps needed to keep it strong:

Unemployment is at 50-year lows. Wages are growing at the fastest rate since the financial crisis. There are a million more job listings than officially unemployed people. Productivity grew 2.2% in the third quarter, after jumping 3% in the second quarter — the fastest growth rate in four years. Small business optimism and the IBD/TIPP Economic Optimism Index remains at record highs.

After eight long years of sluggish growth under President Obama, the economy has been booming.

Still, the Fed has been raising interest rates, and as we’ve pointed out repeatedly in this space, the risk is always that they will go too far, too fast, and crash the economy. The trade war with China is taking its toll. And the economic expansion is old. The last recession ended 113 months ago, making this the second longest in the post-World War II era.

Which is all the more reason for the federal government to continue wringing every bit of growth-inhibiting policies out of the system. For his part, Trump needs to get a trade deal in place with China when he meets with President Xi Jinping at a G-20 summit later this month. And he needs to continue to deregulate where he can.

Unfortunately the Democrats in Congress have little interest in continuing the policies that have resulted in the current economic growth. They will make every effort to roll back the tax cuts and increase the size and spending of the federal government. Hopefully their efforts will not be successful.