Tag Archives: Stephen Moore

One Possible Solution To The Cost Of Health Insurance

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On Wednesday, Stephen Moore posted an article at The Patriot Post about the healthcare aspect of the current government shutdown.

The article notes:

The government shutdown has focused debate on the vast sum ($136 billion in 2025, as projected by the Congressional Budget Office) that the federal government spends to annually subsize continually skyrocketing Obamacare health insurance premiums. The Wall Street Journal reports that regardless of how that fiscal tug-of- war turns out, health insurance premiums paid by Americans are expected to rise another 8% or 9% next year.

The mega-health insurers are leading the charge for more subsidies because this money lands right in their pockets. Their profits and stock values have been soaring while the rest of us struggle to pay the rising tab.

One reason health care costs are rising at two to three times the cost of everything else is that the entire insurance market is dysfunctional. Most Americans pay high monthly premiums (or the government pays for them) for coverage they often don’t use.

In 2024, 11.7 million people, more than one-third of those covered by Obamacare, had no medical claims. They, or taxpayers, paid a lot in premiums — for nothing.

But the whole idea of insurance is to protect your family from major expenses — not minor ones. That’s why we have fire insurance on our homes — to protect against the risk of the total loss of your property.

We need a system much more sensible and less costly for patients and taxpayers. We should be encouraging insurance plans with low premiums that cover major “catastrophic” medical expenses but leave smaller expenses — like checkups or minor surgery — to be paid by policyholders directly.

Such policies — known as catastrophic health insurance plans — have been available for several decades. Most of us would be better off financially if we signed up for these plans. With low premiums and coverage for major medical expenses, they are a win-win for families.

Even as regulated by Obamacare, this coverage charges premiums that are only about half the amount of other Obamacare plans. For example, Forbes recently analyzed the premiums of “77 catastrophic health plans nationwide.” The average premium for a 50-year old member is $443 per month, or $5,316 per year, compared to almost $10,000 for the average Obamacare plan, according to Paragon Health Institute calculations.

The article notes that Obamacare makes catastrophic health insurance plans illegal. Many in Congress are quite happy to move Americans to government healthcare and government insurance (as long as they can have their private insurance).

The article concludes:

Sometimes in life the best solution is the simplest one: Stop the hundreds of billions of dollars of wasteful subsidies, the skyrocketing premiums and the “one size fits all” plans that so many of us do not use, want or need — and instead legalize pro-growth catastrophic health insurance plans for all. Stop fattening the checks of the fat and happy health insurance conglomerates like UnitedHealth, who resist paying honest claims but force you to write monthly checks for insurance you don’t use or need.

Please follow the link to read the entire article.

The Economic Impact Of The Trump Presidency

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On Tuesday, Stephen Moore posted an article at The New York Post comparing the Trump economy and the Biden economy.

The article includes the following graph:

The article reports:

In other words, the middle class mostly treaded water in the Biden years, but enjoyed an income surge through most of Trump’s term.

The Census Bureau also collects data on the income cut-off for households in the bottom 25% of the income spectrum — that is, the income level a household would have to reach to move out of the bottom 25%.

The article also notes:

The article concludes:

Not even Biden’s large cash welfare benefits could reverse the silent-killer effect of inflation’s 22% cumulative price hikes in gas, groceries and rents from 2021 to 2024.

Second, Trump’s 2017 tax policies — which were and still are ridiculed as “tax cuts for the rich” — actually benefited all income groups by increasing jobs and boosting the overall economy.

The share of the income-tax burden paid by the richest Americans actually rose after the president’s tax cuts kicked in. 

Now that Congress has extended those lower tax rates, we may see a similar across-the-board rise in everyone’s income over the next three years.

I am looking forward to the Trump economy.

The Impact Of President Trump’s Energy Policies

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On Saturday, Stephen Moore posted an article at Hot Air discussing the impact of President Trump’s energy policies.

The article notes:

Well, so much for the vaunted renewable energy “transition” to save the planet. This was always a fable. We get 80% of our energy from fossil fuels, and with Donald Trump now in the White House, that ratio is rising, not falling.

A Reuters headline from recent days tells the real story: “US crude production to hit record 13.41 million (barrels per day) in 2025 before falling.”

The data from the International Energy Agency tells the same story about clean natural gas: We’re producing more of it than ever before. Why shouldn’t we? The U.S. has greater access to clean, cheap, reliable and made-in-America natural gas than any other nation. Natural gas is far cheaper and less land-intensive than ugly wind and solar farms that industrialize America’s natural landscape beauty.

All told, American energy in the ground is a $50 trillion treasure chest right under our feet. The commercial value of this abundance is — nearly enough to pay off our entire national debt. We would be lunatic to leave it in the ground.

The rapid revival of America as an energy superpower under Trump should come as no surprise. This is continuation of a 15-year trend thanks to the fracking and horizontal drilling revolution that has nearly tripled U.S. annual production.

The principle of supply and demand applies to fossil fuels.

The article notes:

Crude was over $100 in 2022 and generally ranged between $70 and $85 for the rest of Biden’s term. At $100 a barrel, drillers will search for oil in your backyard. If it were not for Biden’s environmental regulations and the cancellation of vital energy infrastructure, such as the Keystone XL pipeline, we would have produced far more oil under Biden. Gas wouldn’t have gone up to $5 a gallon.

What’s impressive about the Trump oil production spike is that it’s happened even as the global spot price of oil has fallen. In other words, we’re getting the best of both worlds: made-in-America energy AND low prices at the pump. The Energy Information Administration reports forecasts that gas prices will keep falling to below $3 a gallon by next year. That is, unless you live in California, where gas still costs above $5 a gallon.

Let’s not forget the national security benefits from this pro-drilling strategy. More U.S. drilling means less profits for Iran, Russia and other enemies of freedom. It weakens Vladimir Putin’s hand and drives him to the negotiating table since the Russian economy is dependent on natural gas exports for survival.

As I have previously stated, when the crude oil price comes down to $55 a barrel, the Ukraine war will end. It won’t have anything to do with anyone’s negotiating skills–it will be the result of the economic situation in Russia caused by falling oil and gas prices.

Making America’s Economy Great Again

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On Saturday, Hot Air posted an article by Economist Stephen Moore with suggestions about helping the American economy recover from four years of the Biden administration.

This is the list:

1. Slash Job-Killing Regulations

2. Make the Trump Tax Cuts Permanent

3. Replace Welfare With Work

4. Use America’s Abundant Natural Resource

5. Cut Medical Costs by Demanding Health Care Price Transparency

6. Allow School Choice for All Families

7. Implement a Pro-America Immigration Policy

8. Revive America’s Great Cities

9. Pull the U.S. Out of the Paris Climate Change Treaty and Other Anti-America Agreements

10. Finally, Drain the Swamp

Please follow the link to the article for details. All of these are doable. All of these ideas benefit all Americans. It would be wonderful to see America’s cities return to being safe, clean places that are wonderful to visit.

Here We Go Again

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Remember the housing bubble that collapsed in 2007? There were a lot of reasons for that collapse–Congress was not innocent, the government encouraging sub-prime mortgages, putting quotas on mortgage companies telling them who they could loan money to (regardless of income qualifications), etc. Well, the government is in the process of laying the groundwork for a similar crisis.

On Friday, Hot Air posted an article by Stephen Moore about some current government actions that will have results similar to the housing bubble collapse of 2007.

The article reports:

Here we go again. The latest scheme by the Biden administration is to encourage families to borrow more money by using the equity in their home as collateral. Home equity loans are often very risky. If prices fall, home equity can become negative. There is nearly $18 trillion in home equity, and it’s one of the largest sources of savings and ownership for American families.

Now the Biden administration wants to encourage Americans to borrow even more at a time when credit card and auto debts are at an all-time high. If homes fall in value, families could slip underwater and default — just like during the subprime crisis.

As The Wall Street Journal points out, the other “likely losers” from this scam “would be taxpayers.” The evidence is indisputable from 2008 that the mortgages that ended in default were low-down-payment and low-equity loans.

Why in the world would President Joe Biden want to go down this dangerous road again?

In 2009, I shared the following information (here and here):

The bank is East Bridgewater Savings Bank which has no delinquent loans or foreclosures on its books.  The bank didn’t even need to set aside in money in 2008 for anticipated loan losses.   From late 2003 through mid-2008, East Bridgewater Savings made an average of 28 cents in loans for every dollar in deposit — a sharp contrast to the 90 percent average loan-to-deposit ratio among similar banks.

The FDIC recently criticized this bank for not lending enough, slapping it with a “needs to improve” rating under the Community Reinvestment Act, the Boston Business Journal reported.

According to the article:

“East Bridgewater Savings ended 2008 with $135 million in assets, deposits of $84 million, $87,000 in profit, and a Tier 1 risk-based capital ratio of 31.6 percent — more than three times higher than many community banks in Massachusetts, the Journal reported.”

It seems to me that this sort of behavior on the part of the bank should be praised–not criticized.  It used to be good business to lend money only to people who were likely to pay it back!

The average consumer has more common sense that the economic ‘experts’ in the government!

What Four More Years Of Bidenomics Would Look Like

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On May 14th (sometimes it takes me a while to get to things), Stephen Moore posted an article at BizPac Review detailing some of the economic plans the Biden administration has if they win the election in November. If you like trying to stretch your dollar because of inflation, you will love the new challenges.

The article reports some of the plans:

1. Tax rates on investment up to 70%.

2. $2 trillion in new debt spending.

3. A “net zero” energy policy eliminating production of nearly all our abundant fossil fuels.

4. An end to state “right-to-work” laws in 26 states.

5. The antitrust assault against Silicon Valley and corporate mergers ramps up.

The article also concludes:

There is more to worry about under Bidenomics in a second term. One worry is that Dems will agree to eliminate checks and balances in our system of government by overturning the filibuster rule of at least 60 votes in the Senate to pass legislation. Another concern is that Dems will lock in their electoral strength by making Washington, D.C., and Puerto Rico states to add four more Democratic senators. Remember Kyrsten Sinema of Arizona and Joe Manchin of Pennsylvania heroically voted to save the filibuster — but they won’t be around in January 2025 to stop the court packing.

Could American businesses and families survive getting smashed by these gale-force winds of another Bidenomics hurricane in 2025 without capsizing the ship of state? I wouldn’t bet on it.

Stephen Moore is a visiting fellow at the Heritage Foundation and a senior economic advisor to Donald Trump. His latest book is: “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy.”

Your vote counts. We need enough votes against Joe Biden to overcome the fraud that is already being planned.

Green Energy And Jobs

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On Tuesday, Townhall posted an article by Stephen Moore noting that some unions are finally realizing that the Biden administration’s green energy policies are not going to provide jobs.

The article reports:

Could it be that union bosses are finally waking up to the cold reality that the greatest threat to steel workers, the United Auto Workers, miners, machinists and the Teamsters is the radical climate change agenda of the environmentalists?

The green movement has taken the Democratic Party hostage — and President Joe Biden’s all-in embrace of far-left green policies is wreaking havoc on rank-and-file union jobs.

The United Auto Workers recently announced it would withhold its endorsement of Biden as he runs for a second term. “The federal government is pouring billions into the electric vehicle transition, with no strings attached and no commitment to workers,” UAW President Shawn Fain recently declared. “The EV transition is at serious risk of becoming a race to the bottom” for America’s workers.

My only question: Why did it take five years to figure this out?

What a shock that a union that makes automobiles would have second thoughts about endorsing the reelection of a president who, just a few weeks ago, announced new regulations that are intended to end production of all gas cars within a decade. That’s a death sentence for UAW workers.

Meanwhile, California Democrats have proposed new rules to end the production of nearly 2 million diesel trucks. Has anyone alerted the Teamsters?

The article concludes:

This isn’t complicated. The leftists’ religious pursuit of “zero emissions” leads to a green holy land with no smokestacks, no power plants, no cars, no trucks, no steel mills, copper mines, pipelines, gas stoves, air conditioners, airplanes, nuclear plants, washers and dryers, pesticides, plastics, or cows and other livestock.

Oh — and as we sprint to a new post-industrial-age America, with no need for blue-collar unionized workers. The green “degrowth” movement isn’t about creating prosperity for union workers but about putting them on unemployment lines.

It’s good news that the Big Labor bosses are finally expressing some doubts about what the climate change agenda means for hard-hat workers. But if they keep working to elect climate change crazies, the demise of our union workforce will be swift and brutal.

It is important to do everything we can to protect and preserve the environment. However, that preservation has to be balanced with the ability to feed people and help people raise their standard of living. As people, we have the ability to preserve the planet, but we need to preserve each other in the process.

Laws Have Consequences

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On Tuesday,  Stephen Moore posted an article at Townhall about the current employment situation in America.

The article notes:

A policy question these days that has befuddled federal lawmakers is why so many millions of people have not returned to the workplace in the post-COVID-19 era. The labor force participation rate among employable adults is near a record low today. There are at least 2 million to 4 million employable adults who could and should be working but aren’t.

Very few people with even minimal skills can credibly say they can’t find a job. Employers report some 10 million job openings. Small business owners say their biggest problem is finding competent workers. There are many explanations for why so many people aren’t working — fear of COVID-19, the skills mismatch, more people taking early retirement, and so on. But a major factor is that the federal government is back to doing what it did in the 1970s and 1980s. The welfare state today is paying people not to work — even a single hour.

That problem went away in the 1990s after many states, such as Wisconsin and Michigan, began reforming their welfare systems with work requirements. Then-House Speaker Newt Gingrich (R-GA) and the Republican Congress in 1996 passed a historic bipartisan welfare reform bill that President Bill Clinton signed into law.

The article reports on the results of the passage of that law:

Few laws in the last half-century have had such stunning success. Here is a quick summary of the impact, as reported by Brookings Institution welfare expert Ron Haskins:

No. 1: Caseloads declined by 60%, and the number of welfare recipients fell to its lowest level since 1969.

No. 2: Between 60% and 70% of those leaving welfare got a job.

No. 3: The child poverty rate fell every year between 1994 and 2000 because parents were working.

No. 4: The federal government saved more than $50 billion (almost $100 billion in today’s dollars).

During the Covid pandemic, the work requirements were removed.

The article concludes:

America is a rich nation, and we should absolutely have a safety net so that those who fall on tough times, lose a job or become disabled — and that happens to almost all of us at some point in our lives — do not go hungry or homeless or suffer from deprivation.

But welfare is supposed to be temporary and a hand-up, not a handout. The goal of welfare was to end poverty, not perpetuate it.

House Ways and Means Committee Chair Jason Smith (R-MO) said that restoring work for welfare requirements is “a top priority” of his panel. It should be a top priority for our country. Let’s make work, not welfare, pay.

Let’s put the work requirement back into welfare.

Putting American Interests Last

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Venezuela is an obvious example of a prosperous country rapidly declining. As I noted in a recent article, the country went from freedom to tyranny in a very short time. The chances of Venezuela returning to its former status as a free, prosperous nation are very slim. However, evidently the Biden administration has hope.

On Monday, Townhall posted an article about President Biden’s decision to allow Chevron to resume pumping oil in Venezuela. This decision is in obvious contrast to the President’s limiting oil production in America.

The article reports:

The Treasury Department announced Saturday that it was giving Chevron the green light to pump in the socialist country for the first time in years in a joint venture with the country’s national oil company, Petróleos de Venezuela.

The article includes the following quote from former White House Economic Adviser Stephen Moore:

Commenting on the news, Moore said he nearly fell out of his chair reading the headlines.

“This is the same administration that won’t allow us to do drilling here in the United States, not in Texas, not in Oklahoma, not in Alaska, not in West Virginia. But we can pump oil from Venezuela,” he told Fox News of the “America last” policy. “It makes absolutely no sense…When Trump left office and I helped Trump on energy policy, our whole policy was to make America totally energy independent so we wouldn’t have to rely on countries like Venezuela and Iran and Russia. And so somebody explain this one to me because it makes no sense.”

The article concludes:

A White House official claimed the move has nothing to do with current oil prices, but instead is “about the regime taking the steps needed to support the restoration of democracy in Venezuela,” an administration official told The Wall Street Journal. 

Wow. If you believe that, I would like to sell you a bridge in Brooklyn. You can have all the tolls you collect.

This Might Be Part Of The Problem

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There is value in education, but there is also value in real-world experience. Sometimes academics get so wrapped up in their theories that they forget that when you add people to an equation, things don’t always go as planned. On Thursday, The U.K. Daily Mail posted an article which might illustrate the problem of relying on academics rather than people with real-world experience.

The article notes:

  • Economists Stephen Moore and Jon Decker analyzed the work records and resumes of 68 officials, including Biden and his Cabinet members, advisers
  • They found that 62 percent of Biden appointees who deal with business matters – economic policy, regulation, commerce, energy and finance, have ‘virtually no business experience’
  • Only one in 8 were found to have ‘extensive’ business experience and their average business experience was 2.4 years

This is what happens when you use a quota system rather than merit to appoint your advisors and the people in your cabinet.

The article reports:

The report found that 62 percent of Biden appointees who deal directly with business matters – economic policy, regulation, commerce, energy and finance, have ‘virtually no business experience.’ Only one in 8 were found to have ‘extensive’ business experience and their average business experience was 2.4 years. 

‘These highest level people who are in charge of kind of keeping our economy on track of haven’t got the experience to deal with, you know, the logistics of managing $22 trillion economy,’ Moore told DailyMail.com in an interview.

‘You have basically lawyers and university professors and community activists that don’t have any experience with managing a big operation or steering the economy in the right direction.’ 

The lack of experience is pervasive in the Biden administration:

All you have is an administration right now that seems to be focused on two issues. One is, you know, income inequality and the other is climate change. And those aren’t high priority right now. That priority is getting America back to work.’ 

Biden and Harris both have 0 years business experience, as do Agriculture Sec. Tom Vilsack, Treasury Sec. Janet Yellen, Labor Sec. Marty Walsh and Office of Management and Budget Director Shalanda Young, to name a few. There are a handful of exceptions, such as Commerce Sec. Gina Raimondo who worked 11 years in venture capital and White House Chief of Staff Ron Klain who has 16 years’ experience after a career in venture capital.

The article concludes:

The authors found that the Biden administration is staffed by those who come from law backgrounds (20), politics and government (21) and academia or policy-making (12). Those whose main background is venture capital or investing is five.

Please follow the link to read the entire article.

Dictionary.com describes kakistocracy as government by the worst persons; a form of government in which the worst persons are in power. I think we are there.

Economic Growth In America

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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.

Sad News For The American Economy

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One entity that controls the American economy is the Federal Reserve (which is not controlled by the government). It’s board members are nominated by the President and approved by Congress, but it is a private entity. Unfortunately it is part of the globalist cabal that seeks to undermine American sovereignty. President Trump has attempted to put two skilled businessmen on the Federal Reserve recently. The globalists in Congress have caused both men to withdraw their nominations. In the coming year, you can expect the Federal Reserve to subtly move to make the re-election of President Trump more difficult. I expect rate hikes leading up to the election to counter a healthy economy that is rapidly expanding. President Trump is not a globalist, and the globalists really want him gone. Globalists in Congress include both Democrats and Republicans (that is why it is so difficult to secure our borders).

The Gateway Pundit is reporting today that Stephen Moore has withdrawn his nomination to the Federal Reserve Board.

The article reports:

Stephen Moore has a distinguished career in leadership roles at Heritage and The Wall Street Journal. Stephen Moore is a founder at the Club for Growth. Moore was an early Trump campaign supporter and wrote the book Trumponomics.

Moore is a presidential adviser and friend and is an architect of the greatest economic boom since Ronald Reagan.

In September Stephen Moore spoke at the Gateway Eagle Council in St. Louis, Missouri.

And in December Steve criticized Federal Reserve Chairman Jerome Powell for his irresponsible and dangerous rate hikes and threats of rate hikes. Powell was able to unilaterally stall the US economic boom in its tracks and cost the US economy hundreds of billions of dollars.

Moore wrote that it was time for Powell to resign. Moore was right.

The article includes excerpts from a World Net Daily article explaining why Jerome Powell should resign:

The Fed had already reduced the monetary thrust that it provides to the economy eight times since Dec. 15, 2015, by raising its federal funds interest rate from 0.25 percent to 2.25 percent. Each time, the Fed claimed that it needed to guard our economic airliner from inflationary “overheating” – as if its job is to prevent too many people from working and to make sure that paychecks aren’t rising too quickly.

Unfortunately, if you cut engine power too far on a jetliner, it will stall and drop out of the sky.

On Wednesday, Dec. 19, despite the numerous market-based alarms that were sounding in the cockpit, Federal Reserve Chairman Jerome Powell and his co-pilots on the Federal Open Market Committee – a committee within the Federal Reserve System charged under the United States law with overseeing the nation’s open market operations and which makes key decisions about interest rates and the growth of the U.S. money supply – voted to raise the funds rate to 2.50 percent. This sucks more dollars out of the economy at a time when the world is demanding more dollars – thanks to Trump’s tax-cutting and deregulation policies.

Powell has been entirely tone-deaf to the financial markets he seeks to protect. The Dow Jones Industrial average, which had risen by 382 points on hopes that the Fed would listen to Trump and stop cutting power, plunged by 895 points after the 2 p.m. announcement, and closed the day down 352 points (1.49 percent). Poof. Trillions of dollars of wealth vanished.

The article at The Gateway Pundit concludes:

The Democrats and Deep State apparatus does not want Stephen Moore on the board of the Federal Reserve. Stephen is the perfect pick for the job. Now the deep state is attacking Steve and his family.

Republican Senators Joni Ernst (R-IA), Shelley Moore Capito (R-WV), Lisa Murkowsky (R-AL) and anti-Trumper Mitt Romney (R-UT) expressed reservations this week. The Republican senators effectively killed Steve Moore’s nomination.

The Republicans voiced concerns over Moore’s nomination for comments he made nearly 20 years ago about women earning as much as men in fields like women’s sports.

On Thursday Steve Moore withdrew his nomination for the Federal Reserve Board.

It was a victory for anti-Trump globalists everywhere.

Stephen Moore’s withdrawal of his nomination is America’s loss.

Trying To Drive A Stake Through The Establishment

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On March 22, President Trump nominated Stephen Moore to serve on the Board of the Federal Reserve. The establishment began their attack almost immediately. Why? Because Stephen Moore is a respected economist who will rock the boat of the establishment. He supports the economic policies of President Trump (which incidentally have been successful in reviving a struggling economy). The negative reports and personal attacks are all through the mainstream media–very little is being said about the accomplishments of Stephen Moore.

In December 2018, World Net Daily posted an article by Stephen Moore titled, “Fire the Fed.” Stephen Moore called on Chairman Powell to resign in wake of interest-rate hike.

In the article, Stephen Moore states:

In one of the most remarkable Abbott and Costello routines in modern times, the economic wizards at the Fed again raised interest rates on Tuesday. Their crackerjack logic for doing so is to steer America on a course toward recession so they have the tools in hand to end the recession they themselves created. Can anyone tell us who’s on first?

Worse, this Fed move doubles down on its blunderous interest rate rise in September. President Donald Trump turned out to be exactly right: The central bank pullback on money would slow growth and crush the stock market in order to combat nonexistent inflation.

…Since its peak on Oct. 3, which, not coincidentally, was right after Powell gave a speech suggesting that the Fed might be through tightening money, the Dow has fallen by more than 3,500 points. Market fears about his bad judgment have cut the value of all U.S. stocks by about $4.5 trillion, which is enough to buy 16,000 Boeing 787 Dreamliners.

The Fed economists use twisted logic that the economy is “strong enough” to absorb the rate hikes – which is simply an admission that their policy will slow growth.

Stephen Moore needs to be on the Board of the Federal Reserve. His presence might prevent the Federal Reserve from raising rates just before the 2020 election in order to cause a recession. Just as the Federal Reserve kept rates low during the Obama administration to give the appearance of a healthy economy, they may raise those rates in the coming year to give the impression that President Trump’s economic policies are not working. They need a watchdog.

Exactly What Is The Federal Reserve Trying To Accomplish?

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The Gateway Pundit posted an article today that included Economist Stephen Moore’s comments on the recent rate hike by the Federal Reserve. Mr. Moore does not pull his punches.

Mr. Moore states:

In one of the most remarkable Abbott and Costello routines in modern times, the economic wizards at the Fed again raised interest rates on Tuesday. Their cracker jack logic for doing so is to steer America on a course toward recession so they have the tools in hand to end the recession that THEY themselves created. Can anyone tell us who’s on first?

Worse, this Fed move doubles down on its blunderous interest rate rise in September. President Trump turned out to be exactly right: the central bank pull back on money would slow growth and crush the stock market in order to combat nonexistent inflation.

The Fed had already reduced the monetary thrust that it provides to the economy 8 times since December 15, 2015, by raising its Fed Funds interest rate from 0.25% to 2.25%. Each time, the Fed claimed that it needed to guard our economic airliner from inflationary “overheating” – as if its job is to prevent too many people from working and making sure that pay checks aren’t rising too quickly.

Unfortunately, if you cut engine power too far on a jetliner, it will stall and drop out of the sky.

On Wednesday, December 19, despite the numerous market-based alarms that were sounding in the cockpit, Chairman Powell and his co-pilots on the FOMC voted to raise the Fed Funds rate to 2.50%. This sucks more dollars out of the economy at a time when the world demanding more dollars – thanks to Trump’s Tax cutting and deregulation policies.

Chairman Powell has been entirely tone deaf to the financial markets he seeks to protect. The Dow Jones Industrial average, which had risen by 382 points on hopes that the Fed would listen to President Trump and stop cutting power, plunged by 895 points after the 2:00 PM announcement, and closed the day down 352 points (1.49%). Poof, trillions of dollars of wealth vanished.

Since its peak on October 3, which, not coincidentally, was right after Chairman Powell gave a speech suggesting that the Fed might be through tightening money, the Dow has fallen by more than 3,500 points [now 4,500]. Market fears about his bad judgment have cut the value of all U.S. stocks by about $4.5 trillion, which is enough to buy 16,000 Boeing 787 Dreamliners.

The Fed economists use twisted logic that the economy is “strong enough” to absorb the rate hikes – which is simply an admission that their policy will slow growth.

And for what purpose?   Since the last rate hike the economy has slipped into an anti-growth deflationary cycle with commodity prices – oil, copper, cotton, lead, steel, silver among others – falling by about 10 percent. The new Fed policy is sure to accelerate the deflation and farmers, ranchers, coal miners, oil and gas drillers will get further crunched by the dollar shortage.

Can someone at the Fed Temple please explain how falling commodity prices indicates inflation? Inflation is too many dollars chasing too few goods.

The commodities index is about the only read-out that a monetary pilot truly needs. And, right now, the CRB Index is blaring “Pull up!  Pull up!”

Mr. Powell warned of a slowing economy in 2019 – but he failed to acknowledge that the headwinds the economy is facing are the drag the Fed is itself creating. It was almost as if the Fed believes there is some weird Puritan-like virtue to slowing down the investment, employment and wage-growth spurt Trump policies have created.

What is to be done now? Trump wants to fire the Fed chairman though it is doubtful he has the authority to do that. Much better for Mr. Powell to do the honorable thing and admit that his policies have had disastrous economic and financial consequences and resign.

If not this, at least Mr. Powell should hold an emergency meeting of the Federal Reserve Board and immediately cancel the rate hikes. Better yet, the Fed should announce ways to inject money into the dollar-starved economy.

For much of the past two decades, America’s economic problems of slow growth and flat wages were due to the drag of fiscal and regulatory mistakes. Now at the very moment in time when we FINALLY have a president who is slashing tax rates and regulations and is making America a much more business-friendly nation, the Fed’s monetary policy has come unhinged.

Cockpit warnings have been sounding for months, not only from the markets, but from President Trump and many other growth economists – including ourselves. We are now suffering the financial ramifications of this “pilot error” on the part of Chairman Powell.

The article includes the following chart:

It’s time either to get rid of the Federal Reserve or put someone in charge without a political agenda. Crashing the economy is the only way the Democrats can take the presidency in 2020, and political insiders know that. The recent drastic rate increase are not done without purpose.

The Economy Under President Trump

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I am not an economist, but I have learned over the years to listen to the people with the best track records on analysis. One of those people is Stephen Moore, who posted an article at The Wall Street Journal yesterday.

The article reports:

Liberals are tripping over themselves to explain why the economy has performed so much better under Donald Trump than it did under Barack Obama. The economy has grown by nearly 4% over the past six months, and the final number for 2018 is expected to come in at between 3% and 3.5%. The U.S. growth rate has doubled since Mr. Obama’s last year in office.

When Mr. Trump was elected, many Democratic pundits predicted an economic and stock-market meltdown. Then the economy started surging and they abruptly changed their tune, arguing that Mr. Trump was simply riding a global growth wave. That narrative was shattered when U.S. growth kept steaming ahead even as global growth—especially in China and Germany—stalled.

The people who predicted an economic crash if President Trump was elected are now saying that the tax cuts have given us a ‘sugar high’, and the market will crash when the sugar wears off. That makes about as much sense as President Obama taking credit for the move toward American energy independence.

The article continues:

The real contradiction in the “sugar high” argument is that it ignores the slow growth of the Obama years, which featured an avalanche of debt spending. Deficits as a share of GDP were 9.8% in 2009, 8.6% in 2010, 8.3% in 2011 and 6.7% in 2012. Where was the sugar high then? Instead of the expected burst in output coming out of the 2008-09 recession, borrowing more than $1 trillion a year for four years yielded the worst recovery since the Great Depression. Even excluding 2009, Mr. Obama’s deficits averaged more than 5% of GDP throughout the rest of his presidency but produced less growth than Mr. Trump has with lower deficits.

This wasn’t what Keynesians expected. Mr. Obama’s economic team predicted 4% growth every year coming out of the recession. Instead the “sugar high” from record peacetime deficits produced measly 2% growth. By 2016 GDP was running about $2 trillion below the trend line of a normal recovery.

The fastest growth rate over the past three decades was recorded in Bill Clinton’s second term, when federal government spending fell from 21.5% to 18% of GDP and deficits disappeared into surpluses. So much for the idea that deficit spending is a stimulant.

Mr. Trump’s fiscal policies have produced more growth than Mr. Obama’s because they were designed to incentivize businesses to invest, hire and produce more here at home. The Obama “stimulus,” by contrast, went for food stamps, unemployment benefits, ObamaCare subsidies, “cash for clunkers” and failed green energy handouts.

The article concludes:

Those pushing the “sugar high” fallacy also don’t realize that the Trump tax cuts aren’t going away soon. The 2017 business tax cuts can’t cause a recession in 2019 or 2020 because they don’t expire until 2025. They aren’t sugar pills.

The biggest threats to the economic boom and financial markets today are a deflationary Federal Reserve and the specter of a global trade war. Solve those problems and the American economy can keep flying high on its own power. And Mr. Trump’s critics will be proved wrong again.

When you decrease taxes and regulations on businesses, we all gain. That combination, if allowed to continue, will bring us continued economic growth.

When Success Becomes Political

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It is in the best interests of all Americans for the country to prosper. Unfortunately, some of our politicians have forgotten that principal.

Stephen Moore posted an article at Townhall today with the following title, “Why the Left Hates Prosperity,” It’s an interesting premise.

The article states:

Here is Moore’s rule of modern-day politics: The better the economy performs under President Donald Trump and the more successes he racks up, the more unhinged the left becomes. It’s a near linear relationship. And it goes for media as well.

That’s why the monthly jobs announcements and the quarterly GDP reports, like the one released Oct. 26, are the unhappiest days of the year for the Trump haters. News of 3.5 to 4 percent growth and 7 million surplus jobs are the bane of the resistance movement’s existence.

The usual charge against President Trump is the he has moved the Republican party to the far right and ended the days of compromise with the likes of Ted Kennedy. Just for the record, that wasn’t compromise–it was capitulation (aka losing).

The article continues:

Liberals want a return to the days when the GOP’s standard bearers were people like George H.W. Bush, Bob Michel, Bob Dole, John McCain, Mitt Romney, and most recently, John Kasich.

Think. What do all these Republicans have in common? Losing.

My intention isn’t to disparage these men. I have known all of them and respect them all — especially the noble war heroes. Michel was a Republican minority leader beloved by the left for years and years, precisely because he kept the House Republicans where they belonged — in the minority.

I think Mr. Moore is on to something here. As long as the Republicans were shooting themselves in the foot, the Democrats loved them. Donald Trump is not your average Republican. He is probably one of the few Republicans who would have stood strong during the nomination process of Justice Kavanaugh, That’s one of many reasons why Democrats hate him.

The article concludes:

Politics is a contact sport. There aren’t many moral victories in politics. And yes, it really all does come down to winning. As two-time winner Bill Clinton used to say, you can’t change the country if you don’t win.

The problem for the Trump haters, and the reason they are so spitting angry, is that Trump is changing the country for the better. According to a Quinnipiac poll, 7 of 10 voters rate the economy as good or great. Liberals are doubly angry and frustrated because they were so sure he would fail. Perhaps they are the ones who are intellectually inferior.

I strongly suggest that you follow the link and read the entire article–there is a lot of insight in what Mr. Moore is saying. No one likes to lose, but at least the Republicans were gracious about it–too gracious.

Despite What The Mainstream Media Says…

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Stephen Moore posted an article at Real Clear Politics today about global pollution. Remember all the hysteria when America didn’t sign the Kyoto Treat and didn’t institute a cap-and-trade carbon tax? Well, evidently Americans cared enough about keeping the air clean to reduce carbon dioxide emission on their own.

The article reports:

Yet the latest world climate report from the BP Statistical Review of World Energy finds that in 2017, America reduced its carbon emissions by 0.5 percent, the most of all major countries. That’s especially impressive given that our economy grew by nearly 3 percent — so we had more growth and less pollution — the best of all worlds. The major reason for the reduced pollution levels is the shale oil and gas revolution that is transitioning the world to cheap and clean natural gas for electric power generation.

Meanwhile, as our emissions fell, the pollution levels rose internationally and by a larger amount than in previous years. So much for the rest of the world going green.

The world’s largest emitter of carbon dioxide emissions is China. According to the invaluable Institute for Energy Research, “China produces 28 percent of the world’s carbon dioxide emissions. India is the world’s third-largest emitter of carbon dioxide and had the second-largest increment (93 million metric tons) of carbon dioxide emissions in 2017, more than twice as much an increase as the U.S. reduction.” This means it doesn’t really matter how much America reduces its greenhouse gases because China and India cancel out any and all progress we make. Those who think they are helping save the planet by purchasing an electric car or putting a solar panel on their roof are barking up the wrong tree. There is no way to make progress on greenhouse gases without China and India on board — which they clearly are not.

It is basically ironic that China and India, both countries that signed the Kyoto Treaty, have increased their carbon dioxide to the point where they are cancelling out the gains made by America.

The article concludes:

So there you have it. The countries in the Paris climate accord have broken almost every promise they’ve made and the nation (the U.S.) that hasn’t signed the treaty is doing more than any other nation to reduce global warming. Yet, we are being lectured by the sanctimonious Europeans and Asians for not doing our fair share to save the planet. It’s another case study in how the left cares far more about good intentions than actual results. What matters is that you say that you will wash the dishes, not that you actually do it.

Unfortunately the war on carbon has never been about making the earth a cleaner place–it has always been about money. The Chicago Climate Exchange was set up in 2003 so that powerful Democrats could make a ton of money once cap-and-trade legislation was passed in America. It closed in 2010 when the legislation was not passed, and those Democrats lost their investment. Its two biggest investors were Al Gore’s Generation Investment Management and Goldman Sachs–and President Obama, who helped launch CCX with funding from the Joyce Foundation, where he and presidential advisor Valerie Jarrett once sat on the board of directors. Had cap and trade gotten through Congress, all of those people would have made a lot of money. That is one of many reasons why they supported the legislation–clean air was simply a side issue. (References here and here).

 

 

The Trump Economy

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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 Positive Impact Of Sequestration

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On Sunday, Stephen Moore posted an article at the Wall Street Journal about the positive aspects of sequestration. The bottom line in the story is that because of sequestration the federal government is shrinking.

In fiscal 2013, the sequestration will save the government more than $50 billion.

The article explains the potential future impact of sequestration:

In other words, Mr. Obama has inadvertently chained himself to fiscal restraints that could flatten federal spending for the rest of his presidency. If the country sees any normal acceleration of economic growth (from the anemic 1.4% growth rate so far this year), the deficit is on a path to drop steadily at least through 2015. Already the deficit has fallen from its Mount Everest peak of 10.2% of gross domestic product in 2009, to about 4% this year. That’s a bullish six percentage points less of the GDP of new federal debt each year.

…Discretionary spending soared to $1.347 billion in fiscal 2011, according to the CBO, but was then cut by $62 billion in 2012 and another $72 billion this year. That’s an impressive 10% shrinkage. And these are real cuts, not pixie-dust reductions off some sham baseline. Discretionary spending as a share of the economy hit 9.4% of GDP in fiscal 2010 but fell to 7.6% this year and is scheduled to slide to 6.4% in Mr. Obama’s last year in office.

There are still major problems with entitlement programs going broke (I would like to repeat myself here and say that Social Security is not an entitlement program. If you are going to call it an entitlement program, just give everyone the money they have paid into it over the years and stop payments.). Social Security, Medicare and Medicaid will eventually have to be reworked in order to make them viable, but I seriously doubt that will happen under a Democrat president. Partial privatization of all three programs would extend their viability, but would need politicians willing to take a political risk for the good of the country. Right now that’s not what we have in Washington.

 

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