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Home Politics and Elections

HORIST: Do voters really want to kill off the booming economy?

Can you guess who might kill it for us?

by Larry Horist
October 29, 2018
in Politics and Elections, Trump
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One of the first bits of advice I give to political candidate clients is that an election will be decided on what voters decide to decide upon.  For the upcoming midterm elections, the Democrats want voters to make their version of healthcare the major deciding issue.  Republicans want voters to be thinking about immigration as they go to the polls.  Both of those issues are too shortsighted.

President Trump characteristically says the election is about him personally.  It is not, and he would be wise not to make such a declaration because his personality is less popular than his policies and achievements.  What is at risk is his administration’s legacy and the economic future of the United States.

The most important issue is not healthcare or immigration.  It is the overarching American economy.  Virtually all other issues are conditioned on it.  Bring down the economy and there is not much that can be done about all those other problems.

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While Democrats understandably want to give President Obama residual credit for launching the recovery from the 2008 Recession, his policies were actually retarding recovery.  It was the slowest recession recovery in American history.  The growth rate leveled off in the two percent range – which meant growth was not outpacing even a very low inflation rate. The United States economy was not growing.

The growth in jobs that Obama claimed to have created was little more than the result of refilling the jobs that had been lost.  We were not adding new jobs over pre-recession levels.  Even worse, many of the jobs counted by Obama were part-time and at much lower wages.  The all important “disposable income” was stagnant.  Without more for people to spend, the economy could not grow.

Under Obama, the mighty industrial power of the United States was restrained by corporate taxes that were among the highest in the world; unnecessary expensive and burdensome regulations; and a tax code that made it unprofitable to bring trillions of dollars back into the United States.

The Obama policy of adding more and more regulations on the backs of employers was killing off business (ergo job) growth – especially among the middle and small businesses that could not afford the enormous expense of compliance.  Those are the very businesses that cumulatively provide the greatest jobs by far.

While the projected Republican debt of $1.8 trillion over the next ten years is a potential problem – although manageable and reduceable with positive economic growth – it pales compared to the $11 trillion debt racked up in the eight Obama years.  That is $1.5 trillion EVERY YEAR.

Not only was the country in an economic malaise in 2016, but the liberal economic gurus foresaw a gloomy future in which the growth would not even reach an anemic three percent in the foreseeable future.  So confident were Democrats that their failing economic policies where the best options that they predicted an immediate stock market crash should Trump win the presidency.

The stock market tends to react to future economic prospects.  Just the promise of tax and regulatory relief promised during the Trump campaign was sufficient to launch what would become a record-breaking rise in stock values the day after the election.  Fulfilling those promises would later add jet fuel to the economic rocket.

While there are legitimate debates about healthcare, immigration, tax policy, the environment, foreign trade, tariffs and any number of sundry issues, the one issue that voters should be most concerned with – the one issue upon which they should decide to decide – is the economy.

We are currently moving into the four percent growth rate, with the very real prospects of higher rates in the future.  That is the kind of growth that produces new jobs and higher salaries – and more tax revenue to eliminate that projected $1.8 trillion increase in the national debt.

Another very positive move is Trump’s recent directive to all the department heads to cut at least five percent from the budgets in real dollars.  This was far different than the old sham of calling a “cut” nothing more than a percentage decrease in the proposed increase.

Our unemployment rate is at a historic low of 3.5 percent.  That has two positive effects.  It means that virtually everyone in America who needs a job either has one or can get one.  It also means that the shortage of labor will produce wage increases – and that is already happening.

Trump is also handling problems that were allowed to fester for decades.  He is pursuing the renegotiation of trade policies and agreements that have put American business at a disadvantage.  While his toughness has been controversial, it has been effective.  Despite Democrat predictions to the contrary, Trump has successfully brought Mexico and Canada into a new NAFTA agreement – although Trump would like it renamed.

His hardball approach is getting some positive responses from the European Union. After pounding the feet and holding their breath when Trump imposed tariffs, they are now slouching to the negotiating table.

China is a tougher nut to crack, but with tariffs hurting Middle Kingdom’s Gross National Product – down 30 percent – and the Shanghai Stock Exchange – down 20 percent — it is likely that Trump will win the trade battle – not a war — with China.

Part of the stimulus to the American economy has been the influx of trillions of dollars repatriated from overseas due to the Trump Republican tax reform.  This is fueling corporate expansion, and that means jobs, higher wages and more purchases.

The Republican free-market policies have not only benefited the federal government, but they have been a boon to state and local governments as they shift more and more people from being welfare recipients to taxpayers.  To see the best evidence of the benefits of conservative economic policies, just compare cities and states run by the progressive Democrat mayors, governors and legislative bodies and states run by Republicans.  The bluer the city or state, the more dire the economic crisis.  Detroit and Chicago are prime examples.  California and Illinois are in a race to see which becomes the first state in American history to go bankrupt.

As a nation experiencing a shortage of labor, we need immigrants to fill all those future jobs – making them both producers and consumers.  That is how the economy grows.  It retards the economy, however, if too many of the new immigrants are only consumers of America’s taxpayer-driven wealth system.

We have the finest and most powerful military in the world, but we cannot maintain that leadership without economic growth.  The Obama cuts in military spending emboldened Russia and China to rev up the old “arms race” as we sat on the sideline.  We have been failing to meet the most important responsibility of the federal government – to protect the nation from foreign aggression.

The economy also depends on that amorphous term “consumer confidence.”  Under Trump and the Republicans, it is at a new high.  Whatever people may think of Trump personally, they are endorsing his economic policies.  It is not best reflected in opinion polling results.  It is evident in the public’s willingness to spend.  They are endorsing with their dollars.

So, what can we expect if the current left-leaning Democratic Party succeeds in taking over even just the House of Representatives?  We do not have to guess because they have told us.

They will serve as an obstacle to virtually every Republican policy and proposal.  The #NeverTrump Resistance Movement will become the #NeverTrump Demolition Movement.  They will push for single-payer healthcare, free education, massive job-killing tax increases, a return to regulation nation, a continuing influx of migrants arriving illegally in need of welfare assistance, etc. etc. etc. It will be the same big central government socialism that they have been increasingly promoting for decades.  The same policies that brought on the Recession and prevented a real recovery.

Of course, gaining control of only one chamber of the United States Congress will not enable Democrats to enact all their Draconian programs and policies, but it will enable them to block the programs and policies that are currently producing unprecedented economic gains.  It will enable them to wreak political havoc on the Trump administration and by extension on the American public.

There are two areas in which they could – and would – toss the proverbial “wrench” into the economic gears.  The House has the power of the purse and they can use it to strangle Republican initiatives, such as border protection, increased military spending, school choice and any other program that requires funding – and what doesn’t?.  Trump’s call for a five percent spending cut across the board would be dead on arrival.

Perhaps their most destructive capability beyond the horrors of legislative gridlock and blocked funding, is the promise to undertake a campaign of political chaos by implementing their plan to take down the Trump presidency through politically motivated investigations and the power to impeach.

Of course, they know that unless they have a super majority in the Senate, they could not force Trump out of the Oval Office.  But, they do believe that bogus investigations and impeachment hearings could force Trump to resign or create future opportunities for Democrats to take over the Senate and the White House by simply spreading chaos.

In a Democrat House, strident Trump haters would take over key committees. New York congressman and long-time Trump nemesis, Jerry Nadler, would become chairman of the Judiciary Committee.  The number one media anti-Trump point person, Adam Schiff, would chair the Intelligence Committee.  The deservedly controversial Maxine Waters would chair the Committee on Financial Services – providing her with enormous power over all our financial institutions (shudder).  And of course, Nancy Pelosi would be restored to the Speakership despite premature reports of her political demise.

Ironically, if the Democrats did nothing, the very fact that they gained control of the House and COULD be disruptive would be enough to reverse all those rising lines on the economic charts the day after such an election result.  Because the stock market operates on anticipation of the future, Democrats taking over the House could trigger an immediate decline for all the same reasons that optimism resulted in a rising market right after Trump got elected.

Many economists cannot explain the inexplicable recent drops in the market.  Profits, which usually drive the market, are strong.  Stock prices are under valued.  The Federal Reserve’s modest increases in interest rates are not enough to offset the gains to be made from strong profits.  Even the Trump tariffs are not affecting the market very much – especially since his strategy of using them to force open markets seems to be working.

Some stock analysts, however, believe that the only explanation for the recent sell-offs is anxiety over the possibility of a Democrat takeover of the House – threatening the Trump economic policies at every turn.  If that is true, we should not vote to replace that fear of Democrat policies with an unfortunate reality.

We can have different views on how to address healthcare, immigration or any other issue, but they cannot be effectively resolved in any manner without the necessary funds.  As Democrat political consultant James Carville famously said, “It’s the economy, stupid.”

So, there ‘tis.

 

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Larry Horist

Larry Horist

As a concerned citizen and a prominent civic leader, Larry Horist has investigated virtually all facets of urban racism. He has personally investigated ghetto housing, police brutality, criminal justice, inner city unemployment, black economic development and the failure of the public education system that serves the urban minority communities. In all his business, political and civic endeavors, he has opened leadership opportunities for minorities – often for the first time. He has seen both the fiction and reality of racism as the father of a black daughter for more than 40 years. He understands that pain of many black families, having lost a black Marine grandson in Afghanistan. His work has earned him a number of honors and awards from minority groups. His soon to be published book is a testament to his lifelong passion for equality and equal opportunity.

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Comments 6

  1. Steve Florence says:
    4 months ago

    Larry

    By far the best analysis I have read.

    Steve Florence

    Reply
  2. Jerry says:
    4 months ago

    We already know that we can no longer coexist with the liberal dem bloodsucking parasites..
    We have come to the palce, t is now ttime to physically separate ourselves from or prepare for civil war.

    Reply
  3. Philip Simon says:
    4 months ago

    Only time will tell if the Americans who vote, will they care, do they feel for this country? Only time will tell next week, when people vote. Hope it will be for Republicans and Trump.

    Reply
  4. William Sparks says:
    4 months ago

    This is a must read before voting.

    Reply
  5. william says:
    4 months ago

    Yes they do want to loose the growth.. McSally is loosing in AZ to a lying dumbocrat!!

    Reply
  6. LAERCIO PUGGINA says:
    4 months ago

    well lots democrats are on welfare end food stamps, they don/t have any will to work end are not educaded this is why they vote democrat, we the taxpayers want a relief from this lazy democrats voters.

    Reply

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