January 16th, 2017
How many laws have you broken today?
It’s impossible to know for sure, given that regulations now affect just about every facet of our lives. That’s doubly true for businesses, which were not exactly coddled by the Obama Administration (although exceptions were made for generous Democratic donors, such as Goldman Sachs and Tom Steyer).
The federal tax code alone is now 74,608 pages long, or 187 times longer than it was a century ago. Depending on what you include and how you count the pages, the Affordable Care Act (ACA) has produced anywhere from 10,000 to 20,000 pages of new regulations, while the Dodd-Frank Wall Street Reform and Consumer Protection Act, developed to increase oversight of the financial industry and reduce risk, has produced more than 22,000 pages of regulations.
The regulatory state was taken to a new level by President Obama, who didn’t even bother getting support from Congress during his second term. He and the bureaucratic brethren (and sistren) he appointed to regulate worked overtime and broke all records for creating new laws to restrict our freedom, stifle economic growth, concentrate power in Washington and prevent the new Republican administration from doing its job.
That making America great again isn’t the goal of the Obama Administration is made clear by the volume of new regulations being approved. In August, we reported that he set a record by becoming the first president to approve 600 major rules (e.g., rules that each impose a cost of more $100 million). While George W. Bush was no slouch, having approved 496 major rules during his two terms as president, Obama blew past him and just kept going. Read the rest of this entry »
January 3rd, 2017
So did President Obama save us from the financial crisis and rebuild America’s economic strength?
Most media would have us believe that’s the case. As we previously noted, CNBC’s John W. Schoen reported that, “Obama’s biggest parting gift to Trump may be the economy,” since the unemployment rate has dropped to a nine-year low of 4.6%. AP’s Josh Boak repeated the statistic in an article, “Obama leaving behind much stronger economy.” And there are many, many other examples.
Washington Post columnist Catherine Rampell wrote recently that the president-elect will be taking office with “among the most favorable economic conditions … imaginable.” She clearly does not have a very vivid imagination.
Yet other statistics bear out that Obamanomics has been an economic bust, not a boom. Consider the lack of economic growth. In the 85 years for which the U.S. Bureau of Economic Analysis has calculated the annual change in real gross domestic product (GDP), the period from 2006 through 2015 is the only 10-year period during which annual growth never reached 3%. Before now, the longest period during which the economy failed to grow by at least 3% was the four-year period from 1930 to 1933. That is, during the Great Depression. Read the rest of this entry »
December 27th, 2016
We’ve ignored the Federal Reserve Board for weeks now and with good reason. We’ve been bored with the board.
There have been no taper tantrums. There’s been no pontificating about macroprudential supervision, quantitative easing or even forward guidance. No one is talking about negative interest rates anymore.
How boring is the board? The Fed has even issued the same policy statements after each meeting with only a few word changes. And the original policy statement was not too exciting, either.
In fact, the Fed has done next to nothing in the three years since Janet Yellen was appointed to chair it. What’s happened over that period? The Fed has increased interest rates twice, by a total of 0.5% to 0.75%.
The latest yawner was in December, when the Fed raised rates by a whole 0.25%. Even the economists and experts predicted that one. Heck, even The New York Times predicted it correctly.
Financial journalists who have the misfortune of covering the Fed attempted to make it a big event. Google “taper tantrum” and you’ll find that virtually every journalist who wrote about the rate increase compared it to the May 2013 “taper tantrum,” which was when then-Fed Chair Ben Bernanke caused the stock market to tank by indicating that the Fed would end quantitative easing … someday. Read the rest of this entry »
December 19th, 2016
Christmas is coming and we’re just happy that, in today’s post-politically correct world, we feel safe using that word again.
“Happy Holidays” was such a blah, generic pronouncement, it was impossible to say it and sound sincere. So “Merry Christmas” to all, even if you’re offended by the mere mention of the most joyful holiday ever created.
In the spirit of Christmas, I’ve made a list. It’s a wish list, and I understand that it may takes years to deliver everything on it, but I’m patient. And I’ve waited a long time, so a little more waiting won’t hurt.
1. A Growing Economy. Throughout the Obama administration, we heard predictions of strong growth, but it never happened. It should be clear to anyone now, except maybe Paul Krugman, that Keynesian economics doesn’t work.
Hopefully, the Trump administration will not rely on stimulus spending and loose monetary policy as President Obama has, but we’re somewhat concerned that he’s bringing in talent from Goldman Sachs, which tends toward Keynesian thinking. Read the rest of this entry »
December 12th, 2016
Don’t laugh, but the same journalists who have been writing about our booming economy, our amazing progress against ISIS (make that ISIL), Hillary’s dedication to her country and the coming end of the world due to climate change are now claiming that “alt-right” news sites are making things up.
Washington Post columnist Eugene Robinson, who has never written a negative word about any Democrat or a positive word about any Republican, says “cynics” writing on sites like Facebook, Reddit, Infowars and Inquisitr “concocted ‘news’ stories out of whole cloth during the campaign in an attempt to destroy Hillary Clinton and those closest to her.”
As if Hillary didn’t do enough to destroy Hillary.
Conspiracy theorists came up with a crazy story about alleged sex trafficking out of a pizza parlor frequented by Clinton Campaign Manager John Podesta and it led to an attempted shooting. Now Robinson has come up with a conspiracy theory about the conspiracy theorists he criticizes. No doubt Hillary Clinton would have been elected president, if people just reported the truth (except about her, of course).
If Robinson’s column isn’t “fake news,” what is? Read the rest of this entry »
December 5th, 2016
Donald Trump is not Ronald Reagan. That should be obvious, but many optimistic conservatives are drawing parallels and predicting economic nirvana over the next four years.
That’s unlikely to happen, but, conversely, the incoming president is not Barack Obama, either. The Obama presidency has been disastrous on many fronts, creating economic stagnation, a doubling of the national debt, and foreign policy disasters, such as the lifting of sanctions against Iran and Cuba in return for pretty much nothing.
We’re not about to join the media in bashing the president elect for choosing cabinet members that do not share U.S. Senator Elizabeth Warren’s ideological views, but we’re also concerned that the stock market’s post-election surge is yet another case of irrational exuberance.
Stocks were already overpriced before the election, yet the market was up 5.4% for the month of November. That’s not going to continue for four more years.
Stephen Moore, a senior economic advisor to the Trump campaign, is not surprisingly among those comparing Trump with Reagan. As he wrote in RealClear Policy, “After the election of Ronald Reagan in 1981, the U.S. Economy experienced one of its greatest booms in history. The growth rate averaged nearly 4 percent for seven years 1982–89. And the stock market rose from less than 1,000 on the Dow to more than 10,000 over the next two decades. This was a period of wealth and job creation that the nation and middle class had seldom seen before. All the liberal critics wrongly said it could not and would not happen. Read the rest of this entry »
November 28th, 2016
With the dollar strengthening rapidly relative to other currencies, in part as a result of Donald Trump’s election victory, consider this irony: The price of imports will fall, making them more attractive to consumers—just as the incoming president prepares to clamp down on imports.
Hopefully, he’ll put aside his protectionist instincts and be persuaded by his advisors to enable American consumers to enjoy a few bargains. Otherwise, we’ll be experiencing the downside of a strong dollar without enjoying the upside.
The downside is that a strong dollar makes American goods more costly abroad. The weak dollar that prevailed through most of the Obama presidency enabled American companies to compete abroad, even though corporate America is taxed at the highest rate in the industrialized world.
But add on a stronger dollar and American exports will drop, increasing our trade deficit, reducing corporate profits and making it more difficult for the economy to grow. That would cause a drop in employment and American workers would, yet again, have to wait to see their salaries increase. Read the rest of this entry »
November 21st, 2016
Is Donald Trump a narcissistic blowhard or an astute businessman with the ability to make America great again?
We will all find out over the next four years, but we should also keep in mind that he will not be running the country by himself. He has a Republican majority in Congress and most states are now run by Republicans (the party that most media were writing obits for a month ago).
Although President-elect Trump is a former Democrat and has expressed support for expanding many government programs, the advisors he has picked to date signal that the regulatory state we’ve lived under for the past eight years will be reined in. That would be good news for the economy and for the markets.
Regardless, he is not Hillary Clinton, who was poised to tack left of President Obama and bring us closer to the socialist state that U.S. Senators Bernie Sanders and Elizabeth Warren have been advocating.
While we worry about his stands on trade and immigration, President Trump will undoubtedly be stronger than President Obama, more bipartisan and more focused on economic growth. In all cases, it wouldn’t take much. Read the rest of this entry »
November 14th, 2016
“You can’t play sports without losing sometimes and, in losing, you learn something about grace and how to act under pressure.” John F. Kerry
The silent majority has made its choice. Working class white males bonded with the billionaire from New York City and, as a result, we have a new president who is not a Democrat (though he was), not a woman and, thankfully, not politically correct.
Donald Trump, though labeled as a racist by Democrats, also drew more votes from blacks, Latinos and Asians than previous Republican nominee Mitt Romney.
Supporters of Hillary Clinton did not take her surprise defeat well. In fact, they may have reacted with more constraint if bubonic plague had been introduced to their water supply. Clinton supporters swooned. I’m still not sure what the vapors are, but Hillary fans had cases of them in droves. It was like a scene from “Contagion” or “The Day the Earth Stood Still.” Panic was widespread.
Consider this quote from the Telegram & Gazette’s Dianne Williamson: “Yes, it hurts. It’s spirit-crushing. I’ve heard from many people who expressed surprise at the visceral emotional pain they felt upon learning that a slick, opportunistic demagogue has been chosen over a smart, capable and accomplished woman who has devoted her life to public service.” Read the rest of this entry »