Economy

Employee Compensation Rising Sharply

Featured image What happens when the economy grows and companies need more workers? Wages rise, especially when the flow of legal and illegal immigrants competing for low- and middle-wage jobs declines. Not surprisingly, that is what we are currently seeing: American workers are finally reaping the benefits of the lowest unemployment rate and best jobs market in decades. I don’t know about “finally.” President Trump has only been in office for a »

GDP grew at 4.1% last quarter

Featured image The Commerce Department reports that U.S. gross domestic product rose at an annual rate of 4.1 percent in the second quarter, up from 2.2 percent in the first three months of the year. This represents the strongest quarter of growth since 2014. Two main factors appear to have driven this powerful growth. First, consumer spending rose 4 percent. Second, exports rose 9.3 percent. According to the New York Times, the »

Alexandria Ocasio-Cortez, the Gift That Keeps On Giving

Featured image Is it a coincidence that the new face of the Democratic Party, Alexandria Ocasio-Cortez, is a blithering idiot? I think not. The more we see of Ms. Ocasio-Cortez, the more we want her to be the Democrats’ standard-bearer. Here she explains her views on unemployment and the future of capitalism. The unemployment rate is low, she says, because “everyone has two jobs.” Socialist Ocasio-Cortez confronted with booming economy & low »

The Democrats Freak Out Over Jobs

Featured image The June jobs report was terrific. The economy added 213,000 jobs, more than forecasted, and the numbers for April and May were also revised upward. A record 155,576,000 are working, the tenth such record that has been set during the Trump administration. Wages also rose and labor force participation increased, sparking a slight uptick in the unemployment rate. A cause for celebration, no? No. Not for the Democrats. This tweet »

Thoughts on Trade

Featured image The Dow Jones has shed nearly 1,000 points over the last couple weeks, ostensibly over fears of an escalation of trade tensions between Trump and our major trading partners, some of whom have begun imposing retaliatory tariffs of their own. (Though who really can say exactly what moves the stock market on any given day or week—talk about fake news). Trade wars seldom work out very well, but if anyone »

Boom!

Featured image On top of yesterday’s jobs report–so good that it had Nancy Pelosi mumbling that “strong employment numbers mean little”–the Atlanta Fed now estimates 2nd quarter GDP growth at an annualized rate of 4.8%. This is based in part on private fixed investment growth rising at a 5.4% rate. As CNBC notes, “the biggest job gainers have been groups that have historically suffered from stubbornly high levels of unemployment, including younger »

It’s on: A trade war with our allies

Featured image Yesterday, President Trump imposed tariffs on steel and aluminum from Canada, Mexico, and the European Union. These U.S. allies promptly hit back. The EU said it would impose import taxes on, among other items, bourbon (this means you, Mitch McConnell). Mexico said it would levy tariffs on American farm products. Canada is set to impose tariffs on dozens of U.S. products including not just steel and aluminum products but also »

The Cost of “The Resistance”: For CA, It’s $12 Billion

Featured image If you’re an old-timer like me, cast your mind back to the tax reform of 1986, which was passed on a bipartisan basis, because Democrats understood the logic of tax simplification and cutting rates down to a lower level with a broader base. There’s one detail everyone has forgotten that is relevant today: President Reagan’s initial tax reform proposal included elimination the state and local income tax deduction. Pro-tax reform »

Real Trade War or Art of the Deal?

Featured image A trade war with China? As it happens, I spent some time early in the week with Steve Moore of the Heritage Foundation, who has been close to Trump and who, along with Trump’s new senior economic adviser, Larry Kudlow, helped fashion the tax reform bill recently enacted. He has shared with me a couple of times in recent months his private conversations with Trump on economic issues. Steve said »

More Good Economic News, Plus Tariffs [Updated]

Featured image The news on the economic front continues to be excellent. The Labor Department’s February jobs number came in at 313,000, smashing all forecasts. In addition, jobs numbers for both December and January were upgraded. The number of those employed surged in February by 785,000. The sectors where jobs increased the most are significant, too: Construction jobs led the way, with 61,000 new positions, followed by retail and professional and business »

Cohn-Heads

Featured image So Trump’s senior economic adviser, Gary Cohn, is resigning because of Trump’s announcement of steel and aluminum tariffs. The tariffs are likely a bad idea—unless you think Trump is merely making this move as part of his “art of the deal” strategy, and will end up with some trading partners altering their behavior and trading rules. Perhaps it will work out this way. It wouldn’t surprise me if it does. »

The Travails of Trump

Featured image Joseph Epstein wrote a terrific article in the Wall Street Journal earlier this week with the perfect headline: “The Only Good Thing About Trump Is All His Policies.” Just so. The Trump Administration has governed spectacularly in most respects, better than I had thought possible (until perhaps this week—more on that presently). It reminds me of the reverse of what my old mentor M. Stanton Evans used to say about »

Did the tax cut really produce those bonuses and pay raises?

Featured image Veronique de Rugy suggests that the bonuses and pay raises granted by many employers right after the tax cut was signed into law might well have been coming even without the tax cut. The key to the increase in worker compensation, she proposes, is the very tight labor market. De Rugy quotes the Wall Street Journal: With the unemployment rate low and unfilled job openings high, losing workers to a »

Fantasy vs. Reality In November

Featured image As they gear up for November’s Congressional election, the Democrats are peddling a fantasy view of events in America: Trump the racist, Trump the trampler on the First Amendment, Trump the warmonger (or something), Trump-Russia collusion, the Republicans as servants of the rich. To an even greater degree than usual, this election will feature a head-on collision between such fantasies and reality. The reality is that the Trump administration’s policies »

Has Trump Set Up An Economic Boom?

Featured image We’ve seen already the news of the growing number of companies citing the corporate tax cut as the trigger to give bonuses, raises, and announcements of significant new domestic capital investment, which is ruining the Democrats’ day. Wait till they get a load of this news, from the Wall Street Journal this morning: Less-Educated Workers See Biggest Weekly Pay Bumps Americans with only a high-school diploma are seeing faster earnings »

Bringing it all back home

Featured image Has there ever been a quicker boost to the economy than the one we have experienced under President Trump over the past year? As Joel Kotkin puts it in this City Journal column: “New job numbers are robust, GDP and wages continue to rise, stocks are soaring, unemployment continues to decline, and overall growth is at its highest in 13 years. And this salutary picture is not exclusive to big »

Will the economy save the GOP?

Featured image Joel Kotkin asks, “Can the Trump Economy Trump Trump?” In other words, will our strong economy enable Republicans to prevail electorally notwithstanding the unpopularity of President Trump? John raised this question during the session we did last week for our VIP subscribers. He recalled the time, not long ago at all, when political scientists could successfully predict the outcome of presidential races based primarily on a few economic indicators. Can »