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Wednesday, July 31, 2019

An economy so good Democrats won't mention it



"As they say on my own Cape Cod, a rising tide lifts all the boats. And a partnership, by definition, serves both partners, without domination or unfair advantage. Together we have been partners in adversity; let us also be partners in prosperity."
— John F. Kennedy

The Wall Street Journal today published, "The 99% Get a Bigger Raise," an old-fashioned editorial that used facts and reason to make the case instead of emotions and taunts.

The best economy in 50 years has been the swelling of the sea that has lifted everyone. Using data from the Bureau of Economic Analysis, the Journal said, "Worker wages are growing much faster than previously reported."

Employee compensation rose 4.5% in 2017, 5% in 2018 and 3.4% in the first six months of 2019.

The Journal noted, "This is far more than the 3.1% year over year increase in average hourly earnings that the Labor Department’s jobs report showed for June. One reason for the disparity may be that employers are hiring millions of younger, lower-income workers, which may be depressing average hourly earnings as older, more highly paid workers retire."

The newspaper noted the personal savings rate is 8.1%, which was higher than the 5% before the last two recessions. The newspaper said, "This should make the current economic expansion more durable since consumption isn’t being pumped up largely by increased household debt. Instead consumer spending has increased as wage growth has accelerated amid a tight labor market."

While the Journal editorial referenced the Obama presidency's failure to help workers, I go back the full 60 years to 1959, when I began first grade. We were recovering from the first recession in a decade. Eisenhower's pro-capitalism policies were rewarded with 6.9% growth. Only Reagan topped that with 7.2% growth in 1984.

Rising worker wages were seen as a positive.

But by the 1970s, the media began blaming inflation on wages. Never mind the spike in oil prices by OPEC, which affected far more than the automotive industry. Less than half the oil we buy or produce is used as fuel.

And the media blamed worker wages for the shuttering of factories. Within two generations, the idea of having an industrial base was so foreign to our politicians and media that they mocked "Make America Great Again."

The Journal was among them, choosing style over substance in measuring our president.

Now the substance is creating the best economy in the world. Again.

The Journal wrote, "The economy barely skirted recession in the final Obama years, and economic policy changed in 2017. Deregulation has unleashed repressed animal spirits, especially in energy. Tax reform has also spurred business investment in new facilities and equipment, which over time should translate into higher worker productivity and wages.

"Those reforms are continuing to pay economic dividends despite the damage from Mr. Trump’s trade policies. While Democrats and even some conservatives complain that workers haven’t benefited from tax reform, the evidence suggests otherwise.

"Corporate after-tax profits increased by about $220 billion between 2016 and 2018 while employee compensation swelled nearly $1 trillion. Corporate profits declined 2.9% in the first quarter of 2019 even as wages grew at an annual rate of 10.1%. This sure sounds like an economy that is benefiting the 99%."

I do not expect nor want an apology from the Journal. I just want its support in 2020. The battle is between capitalism and socialism. This is our civil war. We settle it in the Electoral College. If we win, capitalism will live to fight again in 2024.

20 comments:

  1. This is why the Democrats keep screaming "WE'RE GONNA DIE IN 12 YEARS IF WE DON'T ELECT AN ECO PRESIDENT!" They want to control the debates by making them about climate change. This is mostly due to the fact that they cannot win on anything else, the economy is going great, taxes are benefiting everyone, the so-called 99% are flourishing in the Trumpinomics. Add to that, Trump has forced our unequal trading deals with foreign powers to be re-evaluated, He has fostered real peace talks with NK, Trumps Administration has seen the decline of ISIS and other Islamic Terriorist militants, this is all I list now, but there is so much more. They cannot win since they have platformed on the idea that only their Socialistic religion can save us in all these areas, and Trump is proving them otherwise. They have only two arguments left, "CLIMATE CHANGE! WE'RE GONNA DIE!" and "EVERYONE WHO DISAGREES WITH US IS RACISTS!" We've heard for decades that we only have a few years left if we don't fix climate change, and each time their deadlines come and pass, they ignore their former warnings and just slap a new deadline on their out-dated arguments. And the race card is so worn out by now, it really doesn't impact anyone outside of socialist politicians and their most dedicated followers.

    Other than climate change and race cards, they try to offer all the free stuff they can find. So, the true last line of desperate hope for winning the election is the oldest Liberal policy in the election books, bribe people with their own money.

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    1. There is a counter argument on climate change as put forth by Professor Valentina Zharkova who gave a presentation of her Climate and the Solar Magnetic Field hypothesis at the Global Warming Policy Foundation in October, 2018. But the media and Democrats ignore such information.

      Valentina Zharkova is a Professor in Mathematics at Northumbria University. She has a BSc/MSc in Applied Mathematics and Astronomy, a Ph.D. in Astrophysics, certificate in project management

      Reportedly Zharkova was one of the few that correctly predicted solar cycle 24 would be weaker than cycle 23 — only 2 out of 150 models predicted this. Her models have run at a 93% accuracy and her findings suggest a Super Grand Solar Minimum is in the cards beginning in 2020 and running for 350-400 years. Another little Ice Age.


      http://electroverse.net/professor-valentina-zharkova-breaks-her-silence-and-confirms-super-grand-solar-minimum/?fbclid=IwAR2ON2sXoAvVlOgV8tt1SeCsYRuqi9HFyGqfkq76Xkr3V23IOwSpbLWS0g8

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  2. And, how many of these workers are saving their money by investing in their country and buying equities? I have to believe that the ownership of stocks is increasing, too. So if the voters own a piece of the pie, why would they vote out the Baker-In-Chief?

    All the good news reminds me that it is ridiculous to call the President a racist; the only colors that mean anything to him are green, red, white, and blue.

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    1. Internet Comment Of The Day nominee right there, MK.

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  3. Turns out that a full court press on improving the economy, especially when the effort includes a reduction in the trade deficit with China, can be successful. PDT's strong-arming of manufacturers can't be discounted, either.

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  4. Another hard-hitting, insightful Article from Don Surber. Great Comments above, too.

    Truly a Transformation in the US, which most of the Media are doing their best to suppress.

    ReplyDelete
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    1. how does mass media cover a big story?

      with a pillow, until it stops moving.

      waterman

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    2. Stolen from Iowa Hawk.

      Spin Drift

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    3. true. if I had remembered where I would have quoted. he's a great one. it was my lapse.

      who knew in the 70s that someday we would need short term memory?

      my bad.

      waterman

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  5. The FED cutting rates today signals the economy topping out. That's why China is losing jobs. Europe is next we'll be last likely next year.

    As a contrarian there is no more telling signal of a topping market economy than everyone singing its praises.

    Plus this is the longest post war expansion ever. Another sign its quite long in the tooth.

    The best news today was Elijah Cummings declining Trump's invitation to personally tour together the Baltimorons housing facility on the West side.

    That is classic Mr. Trump. The master of political rhetoric unseen since Madison, Jefferson, Adams, and Henry.

    We live in amazing times fraught with opportunity and chaos. We'll soon see which triumphs.

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  6. Trump has opened the door, as he said he would, to producing Energy from all types - oil, gas, solar, wind, whatever. As such if you are US manufacturer, your energy costs are 1/2 to 2/3 lower than Europe and China - they have to buy it - at market prices - and tranport it back to their country, then ship their products over to the US market, and pay the US a Tax/Tariff for the privlege to sell in OUR market. US workers are the most productive in the world, so all of this gives more incentive to build in the US.

    Trump has opened my eyes to the Wall Street/Political sell out/hollowing out of American production to our Enemies in China, or anyone else where they can cut labor by $0.25 an hour and sell it back to the US market with no consequence.

    I am in the market for some new kitchen appliances, and almost all of the 'brand names' have been hollowed out - want to say the large 'brand name' US manufacturers got together about 10 years ago, and now all appliances are made in China/Mexico - and are designed to last 7 years. Same as Mfg warranty. When it breaks you throw it away - a lot of appliances don't even have repair parts for sale in the US. Waiting for animal spirits to develop new US-made, US-manufactured brands that last 10-20 years. Currently only way to buy 'over engineered' products is buy German or Scandinavian brands and 2-3x the price.

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  7. Couple of points: Growth, recession and inflation are functions of monetary policy, not fluctuations in commodity prices.
    The Fed *does not* raise or lower interest rates; rates are determined in the Open (bond) Market. The Fed changes requirements of member banks in terms of holdings that affect the rates they charge, which works through the market, mostly via expectations.
    Monetary policy from the death of Benjamin Strong in November 1928 to the appointment of Paul Volcker in October 1979 was incompetent guesswork based on ad hoc indicators. We resumed something akin to Monetarism with the Volcker bank and the result has been obvious - no more 3.5 year recession/expansion cycles, only external shocks have caused recessions (Invasion of Kuwait ('90), 9/11 ('01), roosting Community Reinvestment Act chickens ('08). Read Milton Friedman's Free To Choose to understand Monetarism.
    Ok, enough. I feel better.
    Submariner

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    1. Quite true that rates are market driven. The FED is simply following the trend.

      My point which you ignored is that its a sign of economic weakness and they are petrified. This bubble must never ever pop!

      Ben Strong and his peers created the Great Depression. Friedman was a sell out on the central bank.

      Why should government created a monopoly for the privately banking cartel? They did only on the guarantee they will buy treasury debt no matter what.

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    2. Surber cheered recently that China had lost 5 million jobs. Imagine that. Cheering for poverty. Cheering for people serving Americans to fail.

      What the FED is worried about is if China enters recession as the worlds #2 economy that will drag the rest of the world into recession with them.

      Surber naively thinks we can sustain growth all on our own despite what happens to the rest of the world. That alone proves he's an economic imbecile.

      If this occurs soon Trump is toast. The days of being the worlds police squad are ending.

      Jacques Barzun's book
      From Dawn to Decadence outlines how that is inevitable. God doesn't long abide any world empire America included.

      Van Creveld's book
      The Rise and Decline of the State

      dovetails nicely with Barzun's thesis. Centralized power over nations is coming to an end. The debts alone will crush them.

      The return of liberty is beckoning. But it won't be pretty. Theft by majority vote is coming to an end and that's a good thing.

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  8. Whirlpool, Findlay Ohio, washing machines.

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  9. When I was in West Germany back in 79-81 the Germans' attitude was that it was their patriotic duty to buy products made in Germany rather than imported goods. This was not a legal requirement but it might as well have been. If they bought something imported it was probably something German companies didn't make.

    I have no idea what Germany is like these days.

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    1. lot of folks like that. Russians in la the same way.

      btw, LOTTA russians in la. Russian elec engineering PhD.'s getting rich testing selling and installing Russian prius batteries to Russian taxi owners.

      waterman

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  10. Wow,, I remember being on stage that night with Trump. I was sooooo totally wasted to...

    *hic*

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  11. If you are not doing well in this economy it's because you are too lazy or stupid to take advantage of it.

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