To The Daily Sun,
Trump's policies for economic growth will take time before they actually affect the economy. With that said, the Federal Reserve (Fed) people seem to have discounted the impact on the economy of things like a pro-growth environment, sound fiscal policy and tax reform. They also seem oblivious of how confidence that those things will happen does immediately create consumer confidence, which leads to better business prospects. With an economy dependent on consumers, consumer confidence is integral to results.
The Trump phenomenon is unleashing pent-up emotions and desires in our economy. There are huge amounts of money on the sidelines. To the extent the federal government moves in the correct direction, that money will be put to work. For the first time in a decade we could have sound fiscal policies coming from Capitol Hill. We might actually pass a budget. We may recognize that there is a reason to respect a debt ceiling. Cost-cutting efforts might even happen. We may even return to an era of accountability in spending. Time will tell of course but these are possible with the passing of the error.
Further, the Fed's leaders seem unwilling to come to grips with regulatory burden. The regulatory burden appears likely to become more rational. This will have an impact on the way corporate America does business. It will change business profitability, efficiency and effectiveness. Though the Fed may intellectually believe this is good for the economy, they are not embracing the notion that any of this will improve the economy prior to implementation of new rules, regulations and tax policies.
Our low unemployment rate is anything but full employment. We have way too many people who are employed part-time. We have way too few people participating in the labor pool. Government statisticians discount people once they are deemed out of the labor pool. This is tacit acknowledgment of the smoke and mirrors created by the departing administration's "new normal" that took us back 40 years in labor participation rate. They pretended this is unimportant. The unfortunate truth is that it is important. It just wasn't important to them.
- Category: Letters
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