Posted on 12/07/2019 6:48:45 AM PST by be-baw
How much better can things get?
That’s the kind of question that politicians hate and the public loves. The two dozen Democratic candidates heading into the Iowa caucuses in a few weeks would love to accuse the president of mismanaging the economy. But with a jobs report like the one that came out early Friday morning, Trumponomics are roaring.
Consider the unemployment rate of 3.5 percent. Most living Americans have never seen an unemployment rate this low, because most Americans are under the age of 50 and the U.S. economy hasn’t had such low unemployment since 1969.
As every college student preparing for their final exam knows, some amount of unemployment is natural. When I was in college, the natural rate was considered to be around 5 percent; roughly 1-in-20 workers was between jobs due to moves, marriages and various life changes. In fact, if unemployment gets too low, it signals that companies are hurting for workers, which is good for wages but not for productivity. Sure enough, average hourly wages are nearly 4 percent higher than 12 months earlier, a clip of real wage inflation that’s near a 25-year high.
The Bureau of Labor Statistics publishes a wide array of statistics in its “first Friday” report, and the real surprise of Friday's report was the strength across the board. For example, the payroll report, which is collected differently from the unemployment data’s survey of households, showed a net increase in payroll jobs of 266,000 in November alone. Analysts predicted far fewer jobs, but November outpaced 2019’s monthly average of 180,000 jobs. There’s even a silver lining: Previous months' payroll estimates were revised up by 41,000 more jobs.
And, so, critics of America have to face this puzzle: How much better can things get?
The 2017 corporate tax cuts worked, pure and simple. They weren’t, as critics warned, a sop to the rich. Instead, lowering tax rates from 35 percent to 21 percent on corporate income led to firms hiring more workers and paying higher wages, exactly as theory in economics textbooks predicted.
There’s a larger lesson here, not just a political or economic one. It’s worth stepping back from the daily sparring in Washington to think big about what America’s economic strength means, because there is a nearly constant narrative that something is broken in just about every policy area.
Immigration is broken, they say, and poor migrants are stealing jobs. Or technology policy is broken because robotics and AI are a threat to jobs. How about trade policy — clearly broken, because cheap imports are costing jobs. Notice a trend? Every one of these narratives is proven wrong by the facts.
So maybe it’s time to recognize that those “broken” policies are, on the contrary, working perfectly. America has freer trade and more open immigration and lower corporate taxes than just about any other country in the world. We certainly have more economic freedom than Europe or Japan, let alone China.
While it is true that China is an emerging superpower, its economy is not half as productive as the United States’. It is a stupendous error to think the U.S. should learn from China’s economy, but we see pundits urging us to admire Beijing's central planning all too often. They are falling for what I call the "Nietzschean Trap." As the German philosopher Friedrich Nietzsche said: “Battle not with monsters lest ye become a monster.”
America’s only battle is with itself: How can we go faster? How can our factories become more productive, our entrepreneurs more creative, our children more inspired? If trend lines of the past 20 years tell us anything, it is this: The jobs of the future will come naturally from the marketplace in sectors that no government can anticipate. There are more big-data analysts being hired than anyone imagined ten years ago. But there also are more household delivery trucks from Amazon. There are more YouTube stars, more gardeners, more life coaches.
The bottom line on the jobs report is this: Don’t worry. Jobs are plentiful in a free country. It’s a perfect message.
Tim Kane, Ph.D., is the J.P. Conte Fellow in Immigration Studies at the Hoover Institution at Stanford University and an economist. His most recent book is, “Total Volunteer Force.”
The bottom line on the jobs report is this: Don’t worry. Jobs are plentiful in a free country. It’s a perfect message.
This is exactly the reason why ignorant and dumb democrats, including Tom Styer try to get rid of Donald Trump.
high unemployment is caused by lack of free market in labor caused and perpetuated by government interventionism
“high unemployment is caused by lack of free market in labor caused and perpetuated by government interventionism ‘
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So true, mjp.
May our President Trump be granted 5 more years of being able to eliminate needless/wasteful/expensive regulations.
Cheap materials and products from overseas is nice for retail sales for a while, but a lot less so for manufacturing and factory labor, and if you let it go long enough, the manufacturing and factory labor pools shrink and you don’t have as much of a market to sell those cheap things to.
Of course, there is also the matter of your intellectual property now being in the hands of foreigners who don’t care about trademarks or patents; and as factories close, materials, parts and manufacturing capacity important to national security start being shipped overseas as well to potential adversaries.
The establishment, deep state, intelllectual whatever — the people who only ever seem to have gotten their hands dirty years ago as part of a convenient backstory of how they raised themselves up from a gritty upbringing — they all cry out because they want predictable profits and paths for graft. They don’t care one whit about the parts of America that doesn’t follow the stock market, they thought that part of America would be placated with cheap Chinese baubles at Walmart.
Makes sense. Encouraging.
Supply Side economics not only always works, it works so fast the “experts” are continually surprised.
This is destroying the Marxist Globalist’s welfare state that they have spent the last 50 years creating, we MUST IMPEACH NOW to preserve our stranglehold on the American people so we can permanently Enslave them in Dependence.
The is a message, but not hidden :-)
I think the swamp will be drained and the Globalists will be exposed. I think President Trump’s second term will see enormous changes around the world. Perhaps the long nightmare is over.
I think things were great between 1945 and 1963. But after the assassination of JFK we started sliding in a very bad direction. The world needs to understand that and reject that.
If trend lines of the past 20 years tell us anything, it is this: The jobs of the future will come naturally from the marketplace in sectors that no government can anticipate. There are more big-data analysts being hired than anyone imagined ten years ago. But there also are more household delivery trucks from Amazon. There are more YouTube stars, more gardeners, more life coaches.
The natural drive of companies to automate manual labor tasks in order to improve their efficiency and increase profits will always disrupt the job market. But it doesn’t destroy the job market. Jobs change. We all adjust.. we just have to give up our goal of being a foreman in the buggy whip factory.
There are a LOT of people who aren’t counted as unemployed but are.
People pressed into early retirement in the Great Recession but can return to work.
Young adults whose families got extra money for classifying them as disabled, whether lower IQ, severely learning disabled or mentally ill. And many of them can work, though they transitioned to Social Security Disability as adults. This category numbers in the millions and is part of the rise of SSD numbers, though work is safer and less physically demanding today.
There are many who are nearly unemployable due to criminal records but can work - and would be better contributors to society if they were employed.
This is a GOOD thing - if we reduce the dependency rolls.
Cool story. What’s gonna happen when we actually have a healthy economy will less federal spending and subsidies to medicare, social security and medicaid? Enjoy the deficit spending while ya can.
Carry on, Mister President and may you get 5 more years. WINNING!
I saw an interesting discussion that was about how deregulation was a bigger stimulus than lowering corp taxes.
Monopolies are the ones that push for regulations - to make it impossible (less freedom), for any smaller companies to compete.
Back when the federal debt was a paltry $10 trillion, economists were sounding the alarm about how if we didn’t get the deficit under control, the US economy would collapse. Apparently, as long as the dollar is the coin of the global realm, we can continue to just print more money. Still, there must be a point of no return, but I’m not sure anyone really knows where that is, or what circumstances will push us past it.
It’s likely that there will be changes to the “social safety net,” particularly social security and Medicare. I expect it will be some combination of increased payroll taxes and increasing the age at which withdrawals from those programs can be made.
It will be interesting to see how much this economic boom will increase federal revenues. I doubt it will be sufficient to cover the total amount of the tax cuts, but I think revenues will increase substantially.
Maybe I should worry more, but I doubt I will live long enough to see any major economic collapse. YMMV
In giving credit to the Corporate Tax Cuts, he seems to have forgotten the Trump policy of ‘America First’. Does he not remember the Trump crack-down on H1B Visas?
I can certainly recall business articles discussing how businesses requesting H1B Visas were being questioned why they needed immigrants to fill their jobs that paid the equivalent of a starting salary. I can remember Trump‘s constant drumbeat that people filling H1Bs should be so specialized that they receive heavy 6 figure salaries. Am I the only one who remembers these things?
Bookmark
“Am I the only one who remembers these things?”
Sounds familiar, but I’d like to see the numbers.
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