Tag Archives: Jobs

Why should an independent voter vote Republican in the mid-terms?

After Trump tax cuts, real GDP growth far exceeds Obama years
After Trump tax cuts, real GDP growth far exceeds Obama years

I have a friend in Canada who asks me about American politics. For some reason, the first things out of my mouth are always the latest scandals about Democrats. I am just getting started when she says “no, no, no… don’t tell me why I shouldn’t vote Democrat. Tell me why I should vote Republican.” Well, there are three good reasons to vote Republican. Job creation, law and order, national security.

Let’s look at the first one. The latest economic numbers came in last week, and they were very good for the country, and for the Republicans.

The Washington Post reported on the numbers:

Hiring surged and wages grew more than they have in almost a decade, the government said Friday in a report seized on by Republicans just before the midterm elections as evidence their policies are delivering for American workers.

In a key economic snapshot before Tuesday’s vote, the Labor Department’s monthly jobs report showed that the typical worker’s earnings rose by 3.1 percent in the past year — the biggest such leap since 2009.

Federal economists reported 250,000 new jobs in October, the 97th straight month of gains, and the unemployment rate remained at a nearly half-century low of 3.7 percent, underlining the strong fundamentals of the economy, despite stock market jitters.

[…]The strong jobs creation last month defied expectations, even by Trump’s top economist, Kevin Hassett, who said he had been bracing for a dip in hiring after Hurricane Michael pummeled the Florida panhandle and Georgia.

“We were expecting a number way below this, so it was a big surprise,” Hassett said. “We’ve got extraordinary job growth even in the face of literal head winds from a hurricane.”

[…]Every major sector added employees, including manufacturing, where there has been evidence that the tariffs are starting to bite. Hispanic unemployment hit a new low of 4.4 percent.

“This is the best labor environment in over a decade,” said Joseph Brusuelas, chief economist at RSM U.S., an international consulting firm.

African American unemployment, at 6.2 percent, is close to an all-time low, although it still remains nearly double the white unemployment rate.

Investors Business Daily, a national newspaper focused on the stock market, recalls what things were like during 8 years of socialism under Barack Obama:

During the Obama years, labor force growth slowed to well below 1% a year, while productivity grew at just 1%. Wage growth was exceedingly slow. These alone explain why the economy never managed 3% growth in any year during Obama’s time in office.

“Under President Obama, the growth in the labor force … slowed dramatically to less than half the rate of the previous four presidencies,” as Real Clear Markets described the Obama record in early 2017, as his second term ended. “The labor-force participation rate has dropped to its lowest level in decades, 62.8% compared to a peak of 67.1% in the late 1990s.”

Why did this happen? High taxes, excessive regulation, ObamaCare, Dodd-Frank, wasteful “stimulus,” and a host of other misbegotten policies that sped up departures from the labor force and curbed business investment.

The declining labor participation rate, in particular, hurt. Labor force growth during the Obama era was a meager 0.4% a year. At the same time, productivity grew less than 1% a year. Meanwhile, as the New York Times recently admitted, an “invisible” recession in business investment hit the economy in 2014 and lasted until 2016.

But what changed? What did Trump do differently?

[…][A]t the same time the wage data came out, another equally telling report emerged: Productivity. It showed that productivity grew 2.2% in the third quarter, after jumping 3% in the second quarter. That was the fastest burst of productivity growth in four years.

By comparison, since World War II, productivity has grown by an average of about 2% a year. It was why the American economy performed so well during that time. But since the end of the Internet boom in 2000, productivity has slowed to about 1% or so.

[…]Productivity typically begins rising when businesses invest in new equipment and training for their workers, in pursuit of new products, new markets, new innovations. Productivity, as the cliche goes, is the secret sauce of all successful economies.

And productivity is the real reason why workers are getting wage hikes. Trained workers are worth more in our new, fast-growth economy.

But beyond even that, as economists will tell you, the rate of growth of productivity, the rate of growth of business investment and the rate of growth of your labor force essentially define the speed limit of your economy. All three are rising right now.

Trump’s plan was to cut the corporate tax rate, cut individual tax rates, cut small business tax rates, and de-regulate the economy.  That worked. Workers learned more, earned more, and kept more of what they earned. Trump bet everything on America’s risk-taking entrepreneurs, and he won. Bigly.

What would Democrats do if they win the House on Tuesday (which is likely)? They want to make workers more expensive to hire, by raising the minimum wage. Their plan is to take money away from job creators, in order to bribe young, low-information voters to vote Democrat.

Investors Business Daily explains:

In California, New York, and other states where the $15 minimum wage has been adopted, we’ve seen dozens of businesses — many of them small businesses — close because a wage hike is simply unaffordable. Others have raised their prices or laid off employees to cope with the higher wage floor. Take Reaching Beyond Care, a child-care provider in Oakland, which was converted to a part-time after-school program. Or consider Long Island’s Tropical Smoothie Cafe, which “now schedules one less person per hour and expects employees to work faster.”

We’re talking jobs, jobs, and more lost jobs. In California, a $15 minimum wage is expected to cost the state as many as 400,000 jobs. It’s a similar story in cities like Seattle, and Flagstaff, Ariz. Are unemployed workers truly better off when hourly wages increase?

Independent voters tend to be more practical and numbers-driven than members of either party. Their demand? Show us the money. Well, we had lots of time to observe how the policies of Democrats worked under Obama, and where the Democrats in Democrat-run cities want to take us. And we also know what works, because Trump has done it for all to see. If you want to have job security, more productivity, higher wages, and keep more of what you earn, then vote Republican. Vote for what works. Not for what feels good.

Fifth Third Bank gives employees raises and bonuses ahead of Trump’s tax cut bill

Why does the United States have the highest corporate tax rate in the world?
Why does the United States have the highest corporate tax rate in the world?

What happens when you cut the corporate tax? Well, government gets less of what businesses earn, which means less money for sugar subsidies and AMTRAK and settle Congressional sexual-harassment lawsuits. And what do businesses do with that extra money they get to keep? Well, they could create new products, make existing products cheaper, improve existing products, improve their existing products… lots of good things. In a competitive free market, business have to use their capital to develop better and cheaper products that customers will want to freely buy.

CNBC reports on one of my favorite corporations – Fifth Third Bank – reacting to news of an impending cut in the corporate tax rate.

Excerpt:

Fifth Third Bancorp will pay more than 13,500 employees a bonus and raise the minimum wage of its workforce to $15 an hour after the passage of the Republican tax plan that will cut the bank’s corporate tax rate.

[…]Cincinnati-based Fifth Third, the fifteenth largest U.S. bank by asset size, said the tax cut allowed it to re-evaluate its employee pay and pass along some of the windfall. Nearly 3,000 workers will see hourly wages rise to $15. The $1,000 one-time bonus is expected to be paid by the end of this year, the bank said, assuming President Donald Trump signs the bill into law by Christmas.

Senior managers and top executives are excluded from the special payments. “It is good for our communities, employees and Fifth Third Bank,” said CEO Greg Carmichael in a statement.

But, Fifth Third wasn’t the only company making decisions that favored their employees.

Fox Business reported on some others – and notice how the bonuses are going to non-management and non-executive workers:

AT&T

The telecom giant said Wednesday that more than 200,000 of its employees, including union-represented and non-management workers, will be eligible for a $1,000 bonus. The checks will be in the mail in time for the holidays if Trump finalizes the tax bill with his signature before Christmas. AT&T (T) also said it will invest $1 billion more than expected in the U.S. in 2018, once the cuts are final.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” AT&T Chairman and CEO Randall Stephenson said in a statement. “This tax reform will drive economic growth and create good-paying jobs.”

Boeing

The aerospace and defense company immediately announced $300 million in investments after the bill passed, with $100 million toward corporate giving including employee gift-match programs, $100 million toward workforce development, training and education and $100 million toward enhancing Boeing’s workplaces.

“On behalf of all of our stakeholders, we applaud and thank Congress and the administration for their leadership in seizing this opportunity to unleash economic energy in the United States,” Boeing (BA) President and CEO Dennis Muilenburg said in a statement. “It’s the single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country.”

Comcast

The Philadelphia-based telecom corporation said it would award $1,000 bonuses to more than 100,000 non-executive employees. In addition, Comcast (CMCSA) NBC Universal Chairman and CEO Brian L. Roberts said the company plans to spend more than $50 billion in the next five years on infrastructure investments that are expected to create “thousands of new direct and indirect jobs.”

In a press release, Comcast said the initiatives were “based on the passage of tax reform and the FCC’s action on broadband.”

The way that economics works is that when you give tax cuts to the people who create products and services, they use that money to try to develop better products and services. We all benefit from having innovative products that make us more efficient and productive. Laptops, smartphones, wireless routers, GPS all give us the potential to be more productive. But the only way to develop and sell these products is to hire people who are focused on pleasing customers.

But when you give government money, they turn to the most dependent segments of the population (e.g. – non-English-speaking refugees from countries dominated by Islamic terrorism), and they offer to buy their votes by giving them free stuff. Free drug-injection clinics. Free contraceptives. Free abortions. Free sex changes. Free welfare for refugees and illegal immigrants. We need to let private sector job creators keep their own money because they pay workers who have to get up and go to work.

Trump signs executive order to eliminate job-killing regulations on small businesses

Trump signs good executive action = GOOD TRUMP
Trump signs good executive action = GOOD TRUMP

It’s Tuesday, so I guess it’s time for another executive order. Is it “Good Trump” or “Bad Trump” this time?

Yesterday, the Daily Signal reported this:

President Donald Trump signed an executive order Monday aimed at slashing regulations on American small businesses.

The order will expand regulatory review with the goal of dramatically peeling back federal regulations. The order is the Trump administration’s first step in repealing two regulations for every new regulation put forth, CNBC reports.

The measure also sets a $0 budget for new regulations in 2017, and a cap on the cost of any new regulations going forward. Once in effect, it will require federal agencies to propose any new regulatory rules to the White House for official review.

[…]By signing the order, Trump is following through on his campaign promise to put a moratorium on any new regulations when he takes office. Trump also promised to end “all unnecessary regulations” imposed on the energy industry and to “dismantle” the 2,300-page Dodd-Frank Wall Street Reform and Consumer Protection Act.

It’s good Trump!

Last week, there was another executive order designed to halt pending regulations.

The Washington Free Beacon reports that so far, Trump has halted $181 Billion (with a B) in regulatory costs:

In one of his first acts as president, Donald Trump effectively halted nearly $200 billion worth of regulations, according to a new analysis.

President Trump has taken aggressive action to curb regulations in his first week, promising to cut 75 percent or “maybe more,” and signing an executive order Monday to cut two regulations from the books when every new rule is introduced.

The first move came in the form of a memo to all federal agencies from Chief of Staff Reince Priebus, freezing all recently finalized and pending regulations. The American Action Forum, a center-right policy institute, found the action resulted in stopping rules that would cost the economy $181 billion.

Getting rid of regulations is important, because it frees up small businesses to put more resources on expanding and job creation. Most jobs are created by small businesses, and they are definitely complaining more lately about being overregulated.

Small businesses and regulations
Small businesses and regulations

The American Enterprise Institute explains:

Startups have been on the decline for 30 years, and I have written frequently on some of the possible reasons. One big open question: To what extent is government regulation playing a role in that decline? A blog post by Scott Shane, professor of Entrepreneurial Studies at Case Western Reserve University, offers a few data points that suggest rules and red tape could be hindering business formation. He notes, for instance, small business owners are complaining more about regulation than they have in the past — twice as much as in the 1980s, for instance. And this:

Over the past three-and-a-half decades, federal regulation has been rising, while new business creation has been falling, as the chart above indicates. Researchers at the Ewing Marion Kauffman Foundation, the Hudson Institute, the Hoover Institution and the Heritage Foundation believe the pattern is more than a coincidence. The per capita rate of new employer business creation and number of rules pages in the Federal Register — a common measure of the scope of federal regulation — correlate -0.67 over the 1977 to 2012 period. Similarly, the per capita rate of business creation and the number of pages in the Code of Federal Regulation — another frequently used estimate of government rulemaking — correlate -0.78 over the same period. (A correlation of 1.00 means that two numbers move in perfect concert.)

Correlation may not prove correlation, but it can provide a helpful lead on where to look for the problem.

Trump’s focus seems to be to get job creation started again by lifting the tax and regulatory burdens on those who create jobs. That’s a very different focus than his predecessor.

Millennials who elected Obama will face high taxes, poverty and unemployment

We can't raise taxes enough to fix this overspending
We can’t raise taxes high enough to fix this much overspending

My regular readers have probably noticed that I have stopped blogging about day-to-day politics, ever since the Republican primary candidates with conservative records (Cruz, Jindal, Walker) were eliminated from the GOP primary. I have heard though that the mainstream media is going all in to elect Hillary Clinton. My concern is that many people rely on television news and will never think about two really important issues. First, Obama has been the worst President in the history of the country and has destroyed the economy for decades to come. Second, his disregard for national security and weak foreign policy has emboldened the enemies of Western democracies, e.g.  Russia, Iran, etc. We will see the consequences of this (wars and terrorism) for years to come. Those are the real challenges we face as a nation.

This Hoover Institute article by Victor Davis Hanson explains the big picture that the mainstream media doesn’t care about.

Excerpt:

Consider the $20-trillion national debt. Most Americans accept that current annual $500 billion budget deficits are not sustainable—but they also see them as less extreme than the recently more normal $1 trillion in annual red ink. Americans also accept that the Obama administration doubled the national debt on the expectation of permanent near-zero interest rates, which cannot continue. When interest rates return to more normal historical levels of 4-5% per annum, the costs of servicing the debt—along with unsustainable Social Security and Medicare entitlement costs—will begin to undermine the entire budget.

Count up current local, state and federal income taxes, payroll taxes, property and sales taxes, and new health care taxes, and it will be hard to find the necessary additional revenue from a strapped and overtaxed middle class, much less from the forty-seven percent of Americans who currently pay no federal income taxes. The Obama administration has tried to reduce the budget by issuing defense cuts and tax hikes—but it has refused to touch entitlement spending, where the real gains could be made. The result is more debt, even as, paradoxically, our military was weakened, taxes rose, revenue increased, and economic growth remained anemic at well below 2% per annum.

The national debt is one ticking time bomb, but there are others. Illegal immigration and Muslim refugees create additional financial problems for the next generation of entrepreneurs and workers:

Illegal immigration poses a similar dilemma. No nation can remain stable when 10-20 million foreign nationals have crashed through what has become an open border and reside unlawfully in the United States—any more than a homeowner can have neighbors traipsing through and camping in his unfenced yard.

Likewise, there are few multiracial societies of the past that have avoided descending into destructive ethnic chauvinism and tribalism once assimilation and integration were replaced by salad-bowl identity politics. Common words and phrases such as “illegal alien” or “deportation” are now considered taboo, while “sanctuary city” is a euphemism for a neo-Confederate nullification of federal immigration laws by renegade states and municipalities.

Illegal immigration, like the deficits, must cease, but stopping it would be too politically incorrect and painful even to ponder. The mess in Europe—millions of indigent and illegal immigrants who have fled their own failed states to become dependent on the largess of their generous adopted countries, but without any desire to embrace their hosts’ culture—is apparently America’s future.

Progressive Christians and  left-leaning Republicans join Democrats in imposing costs on the next generation of taxpayers with open borders immigration policies. The bill for importing people who take more in welfare than they pay in taxes has to be paid by someone. Not only will taxes on individuals go up, but taxes on businesses will cause them to create fewer jobs, or move their production to countries that have lower taxes on business.

The rest of the article talks about more ticking time bombs created by young leftist voters. Obama’s anti-police rhetoric has created a crime crisis that will require more police, more incarceration and higher insurance premiums. Obama’s anti-school-choice policies have made it harder for the next generation to get the education they will need to offer value to employers. Without skills, you won’t have a job, and you will be poor – poorer than your parents’ generation.

Although most young leftists are ignorant about foreign policy, that did not stop them from voting to cause crises that will harm our economy, and may also draw us into war. Territorial disputes involving strong countries like Russia and China could easily lead to war. Sponsors of terrorism like North Korea and Iran have gained strength during Obama’s reign of stupidity. Wars that impact trading partners or allies will cost taxpayers money. And millennials are the ones who are going to get the bill for a failed foreign policy.

The article doesn’t mention other crises like the trillion dollar student loan bubble, or the next mortgage lending crisis, or the unfunded pension programs crisis, or Medicare going bankrupt, and then Social Security shortly after, etc. No one in the mainstream media mentions these things, and the millennials aren’t aware of these problems. It’s not in their culture to put financial concerns above having a good time. But closing your eyes doesn’t make a threat disappear. Millennials can’t study English in college, rack up student loans, spend all their money on alcohol, work minimum wage jobs, then travel to Europe in their 20s, and expect everything to work out when they get serious about career and savings at age 30. These crises – which millennials voted for – are going to make their lives harder than their parents’ lives ever were.

Arthur Brooks: why is the American public shifting from optimism to envy?

Labor Force Participation down to 62.8%
Labor Force Participation down to 62.8%

An editorial by Arthur Brooks appeared today in the leftist New York Times. His topic is the shift from optimism to envy, why it is happening, and whether envy makes us happier than optimism.

Excerpt: (links removed)

The Irish singer Bono once described a difference between America and his native land. “In the United States,” he explained, “you look at the guy that lives in the mansion on the hill, and you think, you know, one day, if I work really hard, I could live in that mansion. In Ireland, people look up at the guy in the mansion on the hill and go, one day, I’m going to get that bastard.”

[…]Unsurprisingly, psychologists have found that envy pushes down life satisfaction and depresses well-being. Envy is positively correlated with depression and neuroticism, and the hostility it breeds may actually make us sick. Recent work suggests that envy can help explain our complicated relationship with social media: it often leads to destructive “social comparison,” which decreases happiness. To understand this, just picture yourself scrolling through your ex’s wedding photos.

My own data analysis confirms a strong link between economic envy and unhappiness. In 2008, Gallup asked a large sample of Americans whether they were “angry that others have more than they deserve.” People who strongly disagreed with that statement — who were not envious, in other words — were almost five times more likely to say they were “very happy” about their lives than people who strongly agreed. Even after I controlled for income, education, age, family status, religion and politics, this pattern persisted.

It’s safe to conclude that a national shift toward envy would be toxic for American culture.

Unfortunately, in the wake of the Great Recession, such a shift may well be underway, given the increasing anxiety about income inequality and rising sympathy for income redistribution. According to data from the General Social Survey, the percentage of Americans who feel strongly that “government ought to reduce the income differences between the rich and the poor” is at its highest since the 1970s. In January, 43 percent of Americans told the Pew Research Center that government should do “a lot” to “reduce the gap between the rich and everyone else.”

Why the shift? The root cause of increasing envy is a belief that opportunity is in decline. According to a 2007 poll on inequality and civic engagement by the Maxwell School of Citizenship and Public Affairs at Syracuse University, just 30 percent of people who believe that everyone has the opportunity to succeed describe income inequality as “a serious problem.” But among people who feel that “only some” Americans have a shot at success, fully 70 percent say inequality is a major concern.

People who believe that hard work brings success do not begrudge others their prosperity. But if the game looks rigged, envy and a desire for redistribution will follow.

This is the direction we’re heading. According to Pew, the percentage of Americans who feel that “most people who want to get ahead” can do so through hard work has dropped by 14 points since about 2000. As recently as 2007, Gallup found that 70 percent were satisfied with their opportunities to get ahead by working hard; only 29 percent were dissatisfied. Today, that gap has shrunk to 54 percent satisfied, and 45 percent dissatisfied. In just a few years, we have gone from seeing our economy as a real meritocracy to viewing it as something closer to a coin flip.

There is a good lesson in this for people who want what is best for the poor. Simply receiving money from others is not going to make poor people happy. What we need to focus on is providing the poorest people with opportunities.

One way to help the poor is by giving poor children a better education. Conservatives support school choice, which takes money away from government and puts it back in the hands of parents, letting them choose the best school for their child. Schools have to produce good outcomes in order to earn the money, just like private businesses have to compete for customers. But Democrats oppose school choice, as when they killed the D.C. voucher program that helped poor black students. Less school choice helps public schools to be insulated from competition, which provides worse outcomes to students, especially poor minority students. If we really cared about poor, minority students, we would put pressure on public schools to compete with private schools. But the Democrats don’t want that, they prefer to give favors to their teacher union allies.

Democrats also want to punish job creators with high taxes and burdensome regulations. Democrats passed Obamacare, which punishes businesses with taxes if they allow part-time workers to work for more than 30 hours a week. Many jobs were lost because of this, and many people are now struggling to pay higher premiums for plans with higher deductibles and co-pays. Obamacare is a nightmare of intrusive regulations, too. Now the Democrats are talking about raising the minimum wage, which is going to put even more pressure on employers to lay off workers, because they can’t afford to pay them more money for the same work. For Democrats, this is all to the good, though. Because if the poor don’t have jobs, or can’t work enough hours, they start to see the economic game as “rigged” and they are more responsive to “envy rhetoric”. They start to look to big government for handouts, rather than trying to prevent the government from taxing and regulating job creators.

What we need to see is that it’s not the Democrats’ objective to help people find jobs. They gain when people become more envious, like in European countries, and start to vote to grow the size and power of government to redistribute wealth. Speeches about income inequality never have the goal of giving people jobs. None of Obama’s policies aim to do that. That’s why he won’t build the Keystone XL pipeline, or boost domestic energy development here at home. Instead, they want to extend unemployment benefits and pass the costs on to the next generation. Their goal is to get you unemployed or on disability or on welfare, so that you will vote for the government to continue to take your neighbor’s money to give it to you. That manufactured envy is what keeps the Democrats in power.

This plan to borrow from young people to buy the votes of old people today works for a while, until the money runs out. But by then, the politicians who put in place the redistribution programs are usually long gone .