Above all China is a challenge to the United States. How we handle the challenge will not only determine the future of China and the US, but our character.
Weak Minds Need Not Apply
For that reason it’s necessary to say leadership that has proven to be weak minded, bellicose without cause or unpredictable will not fare well in this environment.
These days Trump cultists love to talk about the booming economy. Time for a reality check. Learn more in Booming US Economy-Reality Check-Bob Davis Podcast 811.
In 2017 the US Economy grew by 2.2 percent. First quarter of 2018 was 2.2 percent. Second quarter 4.2 percent. Third quarter 3.4 percent. Fourth quarter 2.6 percent. Hardly a boom.
Not Even As Good As Obama
In contrast, President Obama’s best year was 2015, at 2.9 percent. Obama also presided over one quarter of growth of 5.1 percent, followed by another quarter of 4.9 percent growth. Better than Trump’s best two quarters so far.
Actual GDP Numbers
First of all growth is growth and we’ll take it. However, because of republican claims of great economic success, it’s time for a reality check based on actual GDP numbers.
Money. Money. Money! Everything the new President says and does is controversial. The latest eruption concerns Trump’s executive order regarding immigrants from several war-torn countries in the middle east region. A handful of court rulings challenging the order are centered on whether due process can be denied people allowed into the United States legally. The court rulings do not suggest the President cannot use executive orders to control departments in the executive branch but whether if the executive orders deny legal rights without due process.
This is just another in a series of actions and comments by President Trump and his administration that have received wide comment and coverage in the media. While protesters protest and media outlets gas-bag about the latest affront to society, Trump and his people throw another rock into the lake creating new ripples that have to be protested against and reacted to by the already too reactive media. This is a tactic or strategy known as an OODA Loop. Trump is forcing the media and his opponents to react to him. When they react his team observes their reaction, decides on a new initiative and then acts, restarting the loop. In this way the administration controls the media battle space.
About the Money
In Podcast 595-Money: When it comes to Money, once the initial spate of executive orders and stunts at press conferences passes, Congress and the President will get down to work on legislative initiatives to address the moribund economy of the United States. Podcast 595-Money wonders whether what has been talked about by this president on the campaign trail and in the media will indeed, make America Great Again.
No Growth
The United States has grown less than 3 percent a year roughly for the last eight years. Those old enough to remember the early 80’s know that the experience of robust economic growth in that era was real. People didn’t worry so much about getting jobs. As inflation came under control and interest rates came down and as unemployment started to come down, optimism took hold. We have not had that kind of feeling in the United States for a long time.
The question is whether the things Trump wants to do will actually produce economic growth. Middle Class taxes are already historically low. Cutting corporate taxes may result in higher profits which is good for Wall Street but may not translate to jobs. Some parts of clearing out the thicket of Federal Regulations can be done by executive order but most of it will require congressional action. Will a Trillion Dollar Stimulus package to build roads and bridges spur economic growth?
A Republican Stimulus?
President Obama’s Trillion Dollar stimulus was supposed to stimulate economic growth and didn’t. Part of the problem with big federal stimulus efforts is the money has to be block granted to states and the spending becomes political. Another issue is the fact that most people in the United States are employed in services rather than construction trade. Aside from the fact that government spending doesn’t ‘create’ jobs, putting people to work in a small swath of the population usually doesn’t result in a high multiple. This is why the Obama Stimulus produced dubious results.
Another problem is Trump’s Trade Protectionist sentiments. While the trade unions love the idea generally the United States has been a free trade nation. Trade agreements are negotiated because most of our trading partners are trade protectionists. The agreements generally break down borders to our trade. The fact certain kinds of manufacturing is cheaper in Latin America and Asia has actually benefited Americans in the form of cheaper goods. Putting up barriers to manufacturing overseas also means goods in the US will become more expensive.
Most of the jobs lost in the last decade or so have been lost due to information technology, robotics and automation. New manufacturing plants are much more automated these days which means they will not produce the manufacturing jobs expected. When one considers completely automated warehouses like Amazon’s and robotic manufacturing like Elon Musk’s showplace plant, don’t expect ‘bringing manufacturing back to the United States’ means jobs at the factory for Uncle Mike.
If you believe the economy is the sum total of individual’s transactions then an economy can be considered a force of nature. This is the first time in recent memory a ‘conservative’ president has endorsed trade protection and big government spending. Two of the biggest problems economically in the United States are the ongoing budget deficits and the total public debt. One wonders how the cornerstones of the Trump economic policy will produce enough growth to reduce the deficits and public debt.
Finally in Podcast 595-Money, the proof will be in the pudding. With all the other controversies swirling around this president after just two weeks if his policies fail to produce the promised economic growth republicans will have real problems in the 2018 and perhaps the 2020 cycles, especially for the politicians that endorsed Trump. Be careful what you pray for.
