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Posts Tagged ‘Growth’
July 30th, 2018 at 1:04 pm
Image of the Day: Inexplicable Economic Surge in 2017 and 2018
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Inexplicably, U.S. economic growth has surged in the first and second quarters of both 2017 and 2018 after a deregulatory and tax-cutting presidential administration replaced a hyper-regulatory and tax-raising one:

Inexplicable Economic Bump

Inexplicable Economic Bump

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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February 2nd, 2017 at 12:33 pm
Image of the Day: Obama’s Legacy = Worst Economic Growth Record
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The  Obama Legacy:  the worst economic growth rate of any president since official recordkeeping began.

Obamas Economic Legacy

Obama's Economic Legacy

November 25th, 2011 at 3:29 pm
How ‘Do-Something’ Pundits Endanger the Country

Matt Welch of Reason magazine has a wonderfully critical review of New York Times columnist’s Tom Friedman’s newest paean to government action, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back.  In a wide-ranging essay that faults as well NYT columnist David Brooks and CNN contributor (and one-time Bush speechwriter) David Frum for their simplistic preference for more government power to fix all that ails America, Welch explains how the ‘do-something’ crowd endangers freedom.

First, a definition:

Do something. Is there a two-word phrase in politics more loaded with disguised ideological content? Embedded within is both an urgent call for powerful government action and an up-front declaration that the policy details don’t matter. The bigger the crisis, the more the urgency, the sparser the detail.

Try as its cheerleaders might, there is nothing essentially new about ‘do-something’-ism:

As The Washington Post’s Greg Sargent pointed out in response to Miller, “many of those calling for a third party are refusing to reckon with an inconvenient fact: One of the two partiesalready occupies the approximate ideological space that these commentators themselves are describing as the dream middle ground that allegedly can only be staked out by a third party. That party is known as the ‘Democratic Party.’ ” By dreaming up a third way to deliver ideas and rhetoric already associated with Barack Obama, the centrists are making the implicit admission that the president is ineffectual in the face of GOP intransigence.

As usual, claimants for a ‘third way’ are really just calling for a formula that results in an overall subtraction of individual freedom:

Fortunately for Brooks—and unfortunately for us—there is a distinct third way. Though vague on details, it involves increased taxes (especially on energy), short-term spending boosts, long-term entitlement cuts, and roughly the same foreign policy commitments as today. It calls for renewed citizen engagement, a return to political civility, and a rejection of coarse cynicism. Better teachers, trained workers, and cleaner air. Although advocated by pundits from all over the traditional political spectrum, the program is remarkably uniform when it comes to giving the government more power. Just don’t call it ideological.

Read the entire piece, here.

September 23rd, 2011 at 2:07 pm
Free Trade, Worker Aid Bills Show Policy Differences

Bloomberg News reports the latest ultimatum from House Speaker John Boehner (R-OH) to President Barack Obama:

“We await the president’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem” with the aid and preference programs, Boehner, an Ohio Republican, said in a statement yesterday. “If the president submits these agreements promptly, I’m confident that all four bills can be signed into law by mid-October.”

Apart from Rep. Paul Ryan’s budget resolution and the president’s deficit reduction proposal, there may be no better example of how different is each party’s idea of sound economic policy.

Boehner wants Obama to release three trade treaties negotiated by the Bush Administration so that Americans and their counterparts in Columbia, South Korea and Panama can start enjoying the benefits of free trade.

For his part, Obama wants to force Republicans into funding another round of unemployment benefits, this time for workers displaced by the yet-to-be-ratified agreements.  That’s right: the president wants to spend money on people who may never be fired.

First of all, it’s fallacious to assume that businesses operating at historically low worker levels will fire employees; especially since increased trade opportunities are more likely to lead to hiring increases.  Moreover, Obama fails to recognize the cost of not enacting the three free trade agreements.  For instance, the U.S. Chamber of Commerce estimates that failure to ratify the agreements will cost 380,000 jobs due to missed business opportunities.

At the heart of this dispute is the focus of each party.  Boehner and the Republicans want to spur economic growth.  Obama and the Democrats want to lock-in the growth of the entitlement state.

Boehner is right to demand action on both free trade and worker aid at the same time.  If Obama cries foul, it’s only because his childish attempt to spend more and get less was called out.

September 19th, 2011 at 8:10 pm
The Chinese Have Their Economic Problems Too

NBC News reports a breath of fresh air for ailing U.S. manufacturing workers: Companies that once outsourced jobs to China are starting to bring some of them back.  Some of the reasons:

Labor costs are soaring by 40 percent a year, as migrant workers are becoming pickier, since there are more job opportunities at home. Also China’s one-child policy means there is no longer such a huge pool of young, dexterous workers. Bank lending is tightening and China’s currency is also appreciating by around 6 percent a year against the U.S. dollar, not quickly enough for US and European policymakers, but sufficient for factories on low margins to feel the pain.

Of course, slapping a new tax on USA-based job creators will stifle any trend towards manufacturing growth China’s growth might enable.

Mr. President, have pity on the working man

September 16th, 2011 at 2:45 pm
California (Almost) Leading the Nation in Unemployment

The Los Angeles Times reports that California’s unemployment is now 12.1 percent statewide, 25 percent higher than the national average, and second only to Nevada’s 13.4 percent.

For decades, California politicians have prided themselves on being “first in the nation” on numerous job-killing efforts such as fanciful global warming regulations, onerous land use regulations, and stupefying bans on products like Mylar balloons and plastic bags at grocery stores.

Recently, Troy wrote a painfully insightful piece on yet another attempt to wage war on business by Los Angeles Mayor Antonio Villaraigosa (higher taxes on commercial property).

California’s political class cannot resist the siren song of being the first to put the screws to the engines of economic growth.  If Villaraigosa’s plan becomes reality, perhaps the Golden State will finally be first in a category no one should want: unemployment.

August 25th, 2011 at 1:32 pm
Fareed Zakaria Becomes Woodrow Wilson

Whatever shred of credibility Fareed Zakaria retained as a conservative pundit from his celebrated book The Future of Freedom has now been officially lost thanks to follow-ups like The Post-American World and today’s essay “Does America Need a Prime Minister?”

In the essay, Zakaria uses the recent S&P downgrade of American sovereign debt to note that “no country with a presidential system has a triple-A rating from all three major ratings agencies.”  He then uses this to support his thesis that the United States would be better served by chucking separation-of-powers and moving to a British-style parliamentary system where the executive and legislative branches are the same.  After all, Britain still has a triune triple-A rating!

How wonderfully anti-American of the Harvard PhD.  Throughout the essay one realizes that Zakaria has wandered so far from the insights of the Founding generation that he now endorses the very system – and possibility for tyranny – that the American Revolution fought to end.  So too did another PhD-turned-constitutional-scold: Woodrow Wilson, the godfather of America’s progressive movement.

Wilson believed that government needed to be professionalized and removed from popular control so that it could act quickly and decisively to cure whatever ailed the populace.  He favored the parliamentary system because it gave enormous power to one man: the Prime Minister.

To appreciate how far Zakaria has wandered from core American principles about the proper way to construct a government, consider this passage from today’s essay:

In the American presidential system, in contrast, you have the presidency and the legislature, both of which claim to speak for the people. As a result, you always have a contest over basic legitimacy. Who is actually speaking for and representing the people?

In America today, we take this struggle to an extreme. We have one party in one house of the legislature claiming to speak for the people because theirs was the most recent electoral victory.  And you have the president who claims a broader mandate as the only person elected by all the people.  These irresolvable claims invite struggle.

There are, of course, advantages to the American system – the checks and balances have been very useful on occasion. But we’re living in a world where you need governments that are able to respond decisively and quickly.  In a fast-moving world, paralysis is dangerous. Other countries are catching up – if not overtaking – America.

Who are these other countries?  Members of the European Union with a currency and debt crisis several times worse than our own?  China with its unsustainable population demographics and monetary policy?  Arab dictatorships that are being toppled by the month?  Latin American oligarchies that nationalize industries to buy off the masses with the wealth of entrepreneurs?

The problem we are experiencing in Washington, D.C. is not America’s constitutional design of checks-and-balances and separation-of-powers.  If anything, the ability of the House GOP to slow down the liberal agenda to tax-and-spend the nation into bankruptcy is due solely to the very “paralysis” intended by our constitutional framework.

If Zakaria wants to end the paralysis in D.C., he should vote for pro-growth fiscal conservatives in 2012 and urge all of his readers to do the same.

August 24th, 2011 at 2:18 pm
Social Security Disability Insurance Going Bankrupt Too

Recently, I wrote about the Social Security Trust Fund being a piggy bank for other federal spending programs.  In return, federal spenders put worthless IOUs back in piggy with an implied promise to pay back the debt with higher taxes in future years.

Now, there is word that Social Security Disability Insurance – yet another expense drawn from the empty retirement Trust Fund – will go bankrupt by 2017.  The reason for the rapid insolvency of disability insurance is simple: eligibility for disability can begin before reaching retirement age.  Per the Associated Press:

Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can’t find new ones in an economy that has shed nearly 7 million jobs.

The more President Obama’s Washington dithers on enacting policies to spur economic growth, the more unemployed people will be forced to find money wherever they can.  The vast majority of Americans want to work, but Obama’s job-killing policies just aren’t giving them the chance.

It would be an unnecessary irony if a liberal like Obama presided over an austerity government that not only raised taxes, but also cut services like Social Security that liberals love.  Yet that is the path we’re on as a recessed economy lurches from market plunges to debt downgrades to a contracting job market.

We need an “opportunity president,” and this one surely isn’t it.

August 19th, 2011 at 7:31 pm
Economics Isn’t That Hard, Stupid

In case you missed it, Stephen Moore of the Wall Street Journal explains “Why Americans Hate Economics” with two wonderfully clear paragraphs.

The first explains where economics as a discipline went wrong:

How did modern economics fly off the rails? The answer is that the “invisible hand” of the free enterprise system, first explained in 1776 by Adam Smith, got tossed aside for the new “macroeconomics,” a witchcraft that began to flourish in the 1930s during the rise of Keynes. Macroeconomics simply took basic laws of economics we know to be true for the firm or family—i.e., that demand curves are downward sloping; that when you tax something, you get less of it; that debts have to be repaid—and turned them on their head as national policy.

The second shows where Keynesians err:

The grand pursuit of economics is to overcome scarcity and increase the production of goods and services. Keynesians believe that the economic problem is abundance: too much production and goods on the shelf and too few consumers. Consumers lined up for blocks to buy things in empty stores in communist Russia, but that never sparked production. In macroeconomics today, there is a fatal disregard for the heroes of the economy: the entrepreneur, the risk-taker, the one who innovates and creates the things we want to buy. “All economic problems are about removing impediments to supply, not demand,” Arthur Laffer reminds us.

Knowledge becomes inaccessible only when an influential group decides that reality doesn’t fit their ideal.  The Keynesians have had their day.  It’s time for the proponents of sound money and economic growth to have their turn.

August 4th, 2011 at 1:12 pm
Obama’s July: 608 Regulations, Costing $9.5 Billion

U.S. News & World Report summarizes a great one-page handout from the office of Senator John Barasso (R-WY):

At Tuesday’s GOP Senate caucus lunch, the lawmakers said that they will renew their efforts, supported by business groups like the U.S. Chamber of Commerce. In a memo Barasso handed out to the lawmakers, he claimed that the administration in July only has put in $9.5 billion in new regulatory costs by proposing 229 new rules and finalizing 379 rules. Among those he cited were EPA, healthcare reform, and financial regulatory reform rules.

If you’re a Tea Party activist, or someone looking for a compact fact sheet describing the growth in government, check out Senator Barasso’s handout. (pdf)

August 2nd, 2011 at 3:01 pm
Come Together for Growth

Not to beat a dead horse, but the next item of business for conservatives should be to make the case for, and pass legislation enabling, economic growth. To do this, those on the right need to bury the hatchet of the last two weeks, stop attacking each other, and work together again. Moderate Republicans are not the enemy; they may just not be sufficiently friendly. Or, from the mainstream conservative standpoint (i.e. John Boehner), the Tea Partiers aren’t the enemy; they just act like it sometimes.

In actual goals and actions, there is far more that unites the right than that should divide it. Pick up the pieces, consolidate whatever gains were made, and move on. Growth is the answer. Tax reform is the means.

April 8th, 2011 at 7:44 pm
Kudlow Lauds Ryan’s Budget Plan

Larry Kudlow has the best summary thus far on the importance of Rep. Paul Ryan’s (R-WI) pro-growth budget proposal:

The key point is not the actual numbers, but the direction of the numbers. Spending is coming down.

Trend lines are important in politics and in finances.  With Ryan’s budget plan, Tea Partiers may have found the details guy they need to make their rhetoric into reality.

April 5th, 2011 at 11:15 am
India Experiencing the Wrong Kind of Growth

The Wall Street Journal reports that India’s explosive growth in college graduates isn’t translating into employment for millions of newly minted degree holders.  The biggest problem: lack of critical thinking and communication skills.

To compensate, companies are spending large sums of money coaching graduates into employability.  According to one Indian business executive, the problem is the credential mentality infecting education:

“How are you able to change the mind-set that knowledge is more than a stamp?”

Sound familiar?  American higher education too is tempted to treat knowledge-building as a service rather than a task.  When students are treated like customers, the link between effort and reward is broken.  The result is a certification that doesn’t translate into employment.

With half of India’s 1.2 billion population under the age of 25, up to a million new workers a month are estimated to join the labor force over the next decade.  If India continues down the path of graduating young people without critical thinking skills, those workers – and the growing Indian economy – will be in serious trouble.

July 12th, 2010 at 4:48 pm
Tech Sector Can Propel America’s Recovery – If Government Doesn’t Subdue It
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America’s technology sector can provide a wellspring of economic dynamism and new employment.  As long as government doesn’t poison that potentially abundant font, that is.

At a seminar today entitled “Technology and Economic Recovery” hosted by Americans for Technology Leadership, panelists Shahin Kohan, Dr. Joseph Fuhr and Karen Kerrigan explained that our information technology (IT) sector offers a much-needed vehicle by which we can overcome economic stagnation.  Dr. Fuhr explained that IT spending is expected to grow 2.3% per year between today and 2013, compared to expected gross domestic product (GDP) growth of just 0.5% during that span, and that employment in the IT industry will grow by over 1 million jobs compared to expected employment shrinkage in other fields.

For her part, Ms. Kerrigan, who serves as President and CEO of the Small Business & Entrepreneurship Council and founded Women Entrepreneurs, explained the destructive consequences of federal overregulation and taxation for small enterprises that create most new jobs in America.  Ms. Kerrigan pointed out that the prospect of even more suffocating regulations and taxation on small business and technology entrepreneurs only discourages innovation, expansion and hiring.  Mr. Kohan, an apparel entrepreneur from Los Angeles who is CEO of Focal Technology Solutions, Inc., illustrated ways in which new technology can assist creative entrepreneurs in a highly competitive worldwide market, along with terrifying examples of how state, local and federal bureaucracy can destroy American jobs and businesses.

The message was simple:  give technology enterprises freedom, and innovation, and critical job growth will soon follow.