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Posts Tagged ‘economic growth’
April 9th, 2018 at 9:21 am
Image of the Day: More Trump Bump, Which They Said Couldn’t Be Done
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During the Obama years, when we endured the worst cyclical economic “recovery” in recorded U.S. history, we were told that the 3% economic growth to which we’d become accustomed since measurement began was a thing of the past, and that “secular stagnation” was the order of the future.  Well, in just the first year of the Trump presidency, a funny thing happened:

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Three Percent Miraculously Returns

Three Percent Miraculously Returns

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December 5th, 2012 at 8:40 am
Text of Paul Ryan’s Speech to Jack Kemp Foundation

Greta Van Susteren has the transcript of Rep. Paul Ryan’s keynote address to the Jack Kemp Foundation last night.  For fans of Kemp and his notion of The American Idea (i.e. broad-based economic growth, equal opportunity, and cultural renewal), Ryan’s speech is an inspiring formulation of Kemp’s program for the 21st century.  An excerpt:

Americans are a compassionate people. And there’s a consensus in this country about our obligations to the most vulnerable. Those obligations are beyond dispute. The real debate is how best we can meet them. It’s whether they are better met by private groups or by government – by voluntary action or by government action.

And I would add that it’s about finding the most cost-effective way to meet those obligations so that they are financially sustainable.  This is critically important for at least three reasons.  First, it means that promises made to today’s beneficiaries can be kept.  Second, it means that tomorrow’s taxpayers won’t be left with the short end of the stick, being made to pay more than they receive in benefits.  And third, it frees up money; both in the federal budget for other worthy spending, and as a greater share of income retained by taxpayers.  Long-term federal entitlements are the real social contracts in our nation, and Americans owe it to ourselves – through our elected representatives – to reform the entitlement system to ensure its stability and fundamental fairness.

October 30th, 2012 at 10:42 am
No Growth Without Government
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GDP grew by two percent in the third quarter of this year. That’s not a particularly impressive number, but in this economy — with its now-ubiquitous diminished expectations — it falls under the category of “We’ll take what we can get.” The Mercatus Institute’s Veronique De Rugy and Keith Hall have scratched beneath the surface of those numbers, however, and what they’ve found is even more disheartening than the rate itself:

According to the Bureau of Economic Analysis, the economy grew by a modest 2 percent in the third quarter of 2012. While this was stronger growth than the preceding quarter, all of the increase in GDP growth came from the biggest increase in federal government spending in over two years.  Federal government spending rose 9.6% at an annual rate in the third quarter…Growth in the private sector fell by 0.1 percent to 1.3 percent in the third quarter—down from 1.4 percent in the second quarter.

But the private sector, we remind you, “is doing just fine.”

January 25th, 2012 at 8:58 pm
Why Obama Can’t Run as Reagan Redux
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It’s not morning in America. And if the dawn does break on President Obama’s watch, the forecast is for heavy clouds. This graph from today’s Wall Street Journal, comparing economic growth during Reagan and Obama’s first terms, shows why:

ObamaReaganGrowth

November 2nd, 2011 at 1:02 am
More Crony Capitalism in L.A. Football Bid

Recently, Troy wrote an excellent indictment of the latest Los Angeles boondoggle, a debt-laden deal to bring an NFL team to a city with job-killing regulations and 12.5 percent unemployment.

Now, Joel Kotkin echoes Troy’s analysis with more scathing criticisms of the regulations-for-thee-but-not-for-me pay-to-play scandal pushing a publicly financed stadium forward.

Such projects often obscure the real and more complex challenge of nurturing broad-based economic growth. This would require substantive change in a city or regional political culture. Instead the football stadium services two basic political constituencies: large unions and big-time speculators, particularly in the downtown area. The fact that the stadium will be built with union labor, for example, all but guaranteed its approval by the city’s trade union-dominated council.

Downtown developers and “rent-seeking” speculators, the other group behind the project, have siphoned hundreds of millions in tax breaks and public infrastructure in the past decade. They have done so – subsidizing companies from other parts of Los Angeles, entertainment venues and hotels — in the name of a long-held, impossible dream of turning downtown Los Angeles into a mini-Manhattan. Perhaps no company has pushed this more effectively than the stadium developer Anschutz Entertainment Group, a mass developer of generic entertainment districts around the world. AEG has expanded its influence by doling out substantial financial donations to Mayor Villaraigosa and others in the city’s economically clueless political class.

September 6th, 2011 at 5:44 pm
Mitt Romney’s Economic Recovery Plan

I’ve taken my share of shots at GOP presidential nominee Mitt Romney for all the usual conservative misgivings about his candidacy.  And while this post is in no way an endorsement of him or his campaign, I do think it worth sharing a link from the Boston Globe to Romney’s newly unveiled economic plan.

Thankfully, it’s all about how to achieve economic growth.  Quin mentioned previously that Rick Santorum, one of Romney’s rivals for the nomination, also has some good ideas.  As conservatives get down to the business of eyeballing the candidates, we’d better get as informed as we can be.  Republican or Democrat, we can’t make another presidential level mistake.

August 19th, 2011 at 12:53 pm
CA Gov. Brown Picks Wrong ‘Jobs Czar’

California Democratic Governor Jerry Brown appointed Michael Rossi, former Bank of America executive and GMAC subprime mortgage guru, to be his unpaid “jobs czar.” Brown hopes that Rossi will be able to tell Brown how to revive the state’s sagging economy.

It’s telling that Brown chose a career Big Business executive instead of a successful entrepreneur.  The two types of people – and their skill sets – couldn’t be more different.

Rossi’s path to success involved managing large corporate structures that focus heavily on exploiting government-created revenue streams, such as subprime mortgages that but for government-owned Fannie Mae and Freddie Mac’s guarantee would never have been made.  It also doesn’t help that today BofA is announcing its second straight year of layoffs (3,500 employees this year alone).

It would be far better for Brown to enlist the help of an entrepreneur with success starting and growing businesses.  As the Kauffman Foundation showed in a study released last summer, “new firms add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually.”

Here’s the Kauffman Foundation’s explanation:

Most notably, during recessionary years, job creation at startups remains stable, while net job losses at existing firms are highly sensitive to the business cycle.

“These findings imply that America should be thinking differently about the standard employment policy paradigm,” said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. “Policymakers tend to focus on changes in the national or state unemployment rate, or on layoffs by existing companies. But the data from this report suggest that growth would be best boosted by supporting startup firms.”

If Governor Brown wants to create jobs he should consult the people creating jobs – not those managing a declining workforce.

August 4th, 2011 at 1:00 pm
California Democrats Trying to Weaken Initiative System

Dan Walters, the dean of California political journalists, is sounding the alarm over a series of moves by the state’s Democratic machine to restrict conservative access to statewide ballot initiatives.

As California Democrats see it, conservatives are poised to unleash a torrent of ballot measures to rein in government spending and regulations, as the state continues to suffer double-digit unemployment and annual budget deficits.  With Democrats controlling all levers of government, there’s only one area where their tax-and-spend liberalism could be challenged: at the ballot box.

To eliminate that threat, Democrats in and outside government are pushing to criminalize paying signature gatherers per name collected, and issuing radio ads linking petition-signing with identity theft.  Last week, Democratic Governor Jerry Brown vetoed the criminalization measure, but others are waiting the wings.

The motivation behind the Democrats’ ploy is protecting the public employee union members who live off legislative largesse, be it sweetheart pension deals, deferred compensation, or over-generous overtime pay.

With Californians waking up to the fact that economic growth isn’t possible without serious reforms, it’s becoming clearer by the day that the liberal Democrats running the state are not governing in the taxpayer’s best interest.  So to the statist’s mind, it’s far better to cut off debate than face reality.

May 16th, 2011 at 1:38 pm
Gingrich’s “Voodoo Economics” Moment?

During the 1980 presidential campaign, Republican candidate George H. W. Bush decried Ronald Reagan’s supply-side tax cuts as “voodoo economics” because the policy promised to lower tax rates and generate more production, and thus more tax revenues.  Bush’s denunciation of Reagan’s economic vision was a proxy for Keynesian thinkers in both parties, who thought (and think) that tax reductions spur consumption (demand), not production (supply).

Of course, Bush lost to Reagan in the Republican primary that year, in part because Reagan had a more compelling message: let’s cut taxes to get the economy growing instead of cutting them simply to reduce spending.  Moreover, Bush was wrong because Reagan’s policies worked.

This weekend, 2012 presidential candidate Newt Gingrich slammed Rep. Paul Ryan (R-WI) and the latter’s “Path to Prosperity” budget proposal as “right-wing social engineering.”  Why?  Because Gingrich thinks changing the way Medicare operates – from straight government subsidy to vouchers – is too “radical.”

But that isn’t stopping Gingrich from continuing to support an individual mandate to buy health insurance.  (Like fellow contender Mitt Romney (R-MA), but unlike President Barack Obama, Gingrich wants the individual mandate at the state, not federal, level.)  So, in Gingrich’s mind, transforming Medicare from a defined benefit into a defined voucher is “radical,” but mandating individuals to buy health insurance is not?

When Reagan adopted the mantra of economic growth through across-the-board tax cuts in 1980, he gave voters a clear alternative to the shared scarcity narrative being peddled by politicians in both parties.  Ryan’s budget proposal is based on Reagan’s insight that less taxes and more growth sells; less choice and more government mandates do not.

Like Reagan, whoever wins the Republican presidential nomination next year will have to make some accommodation with Ryan’s economic vision.  Downsizing – whether it’s freedom, opportunity, taxes, or spending – isn’t enough of a message to create the kind of majority needed to enact the kind of policy changes that spur real private sector growth.  With positions supporting ethanol subsidies and state level individual mandates, it sounds like Newt Gingrich is more comfortable playing the elder Bush’s role in this campaign.

May 14th, 2011 at 10:40 am
Ryan’s Senate Run Would Correct Kemp’s Mistake

Rep. Paul Ryan (R-WI) owes a lot to the late Jack Kemp, Ryan’s former boss at Empower America.  In a published remembrance of Kemp, Ryan said that while Ronald Reagan motivated him to get into politics, Kemp inspired him.

Indeed, Ryan’s “Roadmap to America’s Future” and “Path to Prosperity” budget resolution are models of Kemp’s supply-side thinking about incentivizing economic growth through government policies.  It was thought that, at most, Ryan might entertain becoming the 2012 GOP presidential nominee’s running mate if the right candidate asked.  Much like Senator Marco Rubio (R-FL), Ryan is a methodical politician of substance who is purposefully navigating his career trajectory.  Unlike others, Ryan and Rubio seemed committed to establishing a real record before running for higher offices.

But reality may be pushing up Ryan’s time frame.  With the surprise announcement that Senator Herb Kohl (D-WI) will not seek reelection next year, Ryan has an opportunity not unlike Jack Kemp faced as a rising New York congressman in the late 1970’s.  Then, Kemp decided not to challenge liberal Republican incumbent Jacob Javits in the 1980 GOP primary.  Had he done so and won, Kemp would have significantly increased his national profile by holding a statewide office at the beginning of the Reagan era.

Of course, to run Kemp would have had to split time between promoting his Senate candidacy and his landmark Kemp-Roth tax cuts – the soon-to-be centerpiece of Reagan’s economic recovery plan.  Like Kemp, Ryan has a game-changing economic program to fight for this next cycle, but unlike his former mentor, I think the odds are very good that Ryan will decide to run for the Senate.  If Democrats are going to make Ryan’s “Path to Prosperity” a major campaign theme next year, why not see if Wisconsin voters are ready to promote their state’s best presidential contender to statewide status?

April 29th, 2011 at 1:10 pm
It Takes People to Grow an Economy

The Wall Street Journal reports China’s controversial one-child policy will have disastrous effects on the country’s capacity for economic growth, a stunning rebuke to policymakers who argue that predetermining fertility rates is key to eliminating poverty.

Since the one-child-per-couple policy went into effect in 1980, over 400 million births have been prevented, decreasing the amount of poor people and thus the rate of poverty.  (Though since the policy applies to everyone, it has also reduced the amount of children born to middle class and wealthy families; i.e. those most likely to produce entrepreneurs and innovators.)

An informal advocacy group in China is trying to overturn the one-child policy because of a generational imbalance that threatens continued economic growth:

They say China’s elderly population is expanding rapidly as Mao-era baby boomers retire, putting new burdens on society to cover the cost of their retirement. At the same time, China’s labor force is due to start shrinking in 2016, reversing the demographic phenomenon of a widening pool of low-cost labor that powered a manufacturing boom over the past three decades.

It takes people to grow an economy.  If Chinese policymakers continue to eliminate entrepreneurs and workers from the economy, they will soon experience the same chilling effects of the demographic winter settling in over Western Europe and Japan.

April 11th, 2011 at 12:19 pm
Bring On the Ideology

The Wall Street Journal reports that President Barack Obama’s upcoming speech about how to balance the budget will include tax increases along with cuts to programs like Medicare and Medicaid.

The call for higher taxes on America’s job creators will solidify the decision facing voters next year.  The Democrats want more money, while the Republicans want less government.

If there is a positive aspect about the president showing his true tax-and-spend colors, it’s that ideology – how serious people frame reality and their decisions about it – is now front and center in politics.

Rep. Paul Ryan (R-WI) and the GOP want lower taxes and private sector growth.  President Obama and the Democrats want to spend taxpayer money into an ever-growing share of GDP.

Let the debate begin.