The Trump Economy and Buyer Psychology

© 2018 Steve Feinstein. All rights reserved.

 

There was one thing most voters agreed on before the 2016 presidential election and that was that Donald Trump was a good businessman and would likely do a good job handling the economy. After eight years of halting, lackluster economic growth under the heavy Government hand of President Obama, Trump’s supporters hoped that The Donald would be able to unshackle the economy and inject real growth back into the country’s business environs.

He has done so. The facts are irrefutable:

Stocks are markedly higher than at the end of Obama’s tenure. The Dow is over 26k now (mid-Aug 2018) compared to 19.8k when Obama left office and the more broadly-based S&P 500 is over 2800 now compared to 2270 when Obama left office.

Unemployment is down to 3.9%, the lowest in decades.

Job creation under Trump is robust, with over 3.5 million new jobs since Jan 2017, according to the BLS.

Economic growth The GDP rose at a 4.1% annual pace in Q2 2018, compared to a tepid 2.14% average GDP growth in the 2010-2016 recovery years under Obama.

The question is, of course, why, and how much is this president—or any president—really responsible for the economy’s performance, good or bad?

Rabid, resentful liberal partisans—still reeling in utter shock and disbelief over Hillary’s ignominious defeat, and eager to downplay any Trump success—are only too quick to point out that they feel Obama handed Trump an altogether better economic hand than the one President Bush gave to Obama, so President Trump had a “head start” over Obama. With the country’s banking system supposedly teetering on the brink of total collapse in the waning Bush years (according to liberal revisionists), it is Obama who deserves the credit for stabilizing a potentially calamitous situation and bringing order and sanity back to American economic markets. In liberal chronicles, any further growth in the ensuing Trump years is the result of Obama’s measured, steady hand on the financial tiller as he masterfully guided the fragile American economic boat around the rocky shoals, as it were, and avoided any additional damage.

Nice story. Blatantly untrue, however, despite the popular narrative put forth by the liberal mainstream media and repeated endlessly by accuracy-challenged Democratic politicians. The banking crisis was brought about largely by Democratic-sponsored, PC-driven lowered lending standards, which led to the creation of mortgage loans to borrowers patently unqualified to receive them. It was a financial time bomb waiting to go off. It finally did, and when it happened, the brilliant, heroic efforts of Sheila Baer (head of the FDIC under President Bush) ensured that not a single bank failed, maintaining confidence in the system and preventing an out-of-control run on the banks. In fact, President Bush put in place all the solutions to the crisis—including TARP—and the system was already recovering by time Obama took office several months later.

Much to the total chagrin of rabid, resentful conservative partisans, however, Obama does deserve some credit. His calm, reassuring demeanor did indeed deliver a settling effect to deeply worried world markets.  And while his “Stimulus” was little more than political showmanship of essentially no tangible positive economic value, it did demonstrate that the American administration was engaged and willing to take action.  Sometimes, appearances can be as meaningful and comforting as actual substance. The world breathed a sigh of relief: The President was hands-on. Things would get better.

And they did. Unfortunately, they didn’t get that much better. Once past the immediate danger of the Great Recession, the Obama recovery was the weakest economic recovery after a recession in over 50 years. The weak recovery was indeed Obama’s fault, as he took the opportunity presented by a desperate economic situation to impose his onerous, punishing ideological thumbprint on what he saw as the unfair aspects of our free-market system.

Under the banner of the undefinable but haughty-sounding phrase of “social justice,” Obama targeted businesses with a raft of thicket-like, punitive regulations, increased their taxes and generally made it far more difficult for private businesses—large and small—to make a substantial profit. Make no mistake, the unspoken, never-admitted-to but unquestioned target of his actions was private business, owned and run, in Obama’s mind, mostly by conservative Republicans, whose ill-gotten profits never filtered down to the “deserving”—his voting base. Obama would change that.

For example, he weaponized the EPA by empowering them to impose new emissions regulations so intentionally, unrealistically strict that targeted companies would be virtually forced out of business. Another action was his ACA Obamacare, which weighed down companies with virtually untenable financial requirements and new taxes for providing mandatory healthcare coverage for their employees. These are just two of the most visible of an uninterrupted 8-year string of anti-business actions on his part. The net result of Obama’s web of politically-motivated anti-business taxes and regulations was an incredibly weak economic recovery, one that averaged only about 2% annual GDP growth from 2010-2016.

The real culprit of Obama’s actions was, of course, the creation of tremendous uncertainty. Companies simply didn’t know what new punishment, regulation or tax awaited them around the bend. One anti-business action after another was flung at them by the Obama administration; companies were shell-shocked into inaction. They dared not make a risky move in terms of aggressive expansion or major capital investment for fear of yet another social justice landmine being tossed in their path.

Whether it’s an individual, the head of a household or the CEO of a billion-dollar company, when the outlook is uncertain and likely negative, it’s human nature to play things conservatively, close-to-the-vest and take no chances. People spend the bare minimum, just enough to get by. Families cut back: No new car or extravagant vacation this year. Not until things improve. Companies don’t expand and they don’t hire beyond what’s absolutely necessary. They go into cost-cutting survival mode, hoping to merely ride out the storm and keep their heads above water.

That is precisely the negative atmosphere that Trump has removed and that’s why things are so much better. Buyer psychology is buyer psychology, regardless of scale. “Buyers”—individual consumers, heads of households, hiring agents, corporate purchasing managers, expansion-minded CEOs—all feel immeasurably more confident and certain about the economic landscape now, under president Trump, than they did under Obama. People don’t feel that they’re going to be blindsided or have the figurative rug pulled out from underneath them. This administration has earned the confidence of the business community by rolling back punitive regulations and lowering taxes in a common-sense fashion and it shows in the employment gains across all demographic groups, the markets’ performance and the GDP growth, which is averaging above 3% and poised to go higher, something that eluded the anti-business Obama administration.

President Trump deserves direct, unequivocal credit for the current economic turnaround. His removal of unneeded, punishing regulations and his tax-cutting measures have sent an unmistakable signal to buyers of all stripes and sizes that the country’s business conditions really are better and it’s safe to come out now. President Trump understands “buyer psychology” the way few, if any, past presidents have. This is a prime example of presidential leadership, coming from a skilled, experienced businessperson and exercised to the good of all Americans.

 

I should probably preface this post by placing the blame for its inspiration squarely on the shoulders of one current and one former member of the White House Press Corps. The current Press Corps member is none other than CBS News’ Mark Knoller. He has a very interesting Twitter feed (@markknoller) and tweets out some interesting details about White House life not found anywhere else. If President Obama sneaks out to Five Guys for a bacon double-cheeseburger, Mark will know what he topped it with. He’ll also keep you posted on the guest list for most any state dinner. I suspect Mark to be a closet “foodie” but again I digress.

The second (and former) White House Press Corps member is CNN’s latest addition to its fledgling political staff and former ABC Newsman Jake Tapper. Jake’s contribution to this post is what I believe to be the single best book written about the Afghanistan war entitled The Outpost.

This is not a book to be read, but rather an intensely detailed experience to be endured. It does not have a happy ending and the story he relates about this American outpost beats the reader about the head and shoulders.

Tapper relates the story of several injured soldiers whose wounds required them to be medically evacuated to field hospitals. Often these soldiers were then flown to Lanstuhl Regional Medical Center in Germany where the heroic medical staff works around the clock trying to save the lives of these American heroes.  Many lives are saved at this facility. Far too many are not as fortunate.

I’m sure I’ve confused you by now as to the point of this post. Rest assured, Dear Reader, I do have a point.

In the past six months President Obama has boarded Air Force One for trips overseas which offered him the opportunity of refueling the Boeing 747 at Germany’s Ramstein Air Force Base. On November 12, 2012, Mark Knoller reported:

Air Force One done refueling at Ramstein and now on final 10hr leg of trip to Thailand. Pres Obama stayed on the plane. (Emphasis added)

And, just this past Saturday Knoller again took to Twitter to report:

After 11hr 36min flight, Pres Obama back from his Mideast trip. Flight home from Amman was 5,935 miles. Refueling stop in Germany bypassed. (Emphasis added)

Here’s my point. The President of the United States is the Commander in Chief of the Armed Forces of the United States. In my humble opinion, this job is far and away the most important role of that office. It brings with it a responsibility unique to the relationship between a commander and his (or her) troops. Ramstein Air Force Base is but five kilometers from the Lanstuhl Regional Medical Center. The very least the Commander in Chief could do would be to take time out from his golf game, state dinner, fundraiser, or campaign event schedule and pay a visit to those who have given so much in the service of their nation.

He is, after all, the President of the United States. Air Force One goes where he says, stops where he says, and takes off when he says. It’s not like the plane is going to leave without him.

Perhaps I’m being small and petty. If I am, blame Tapper, Knoller, and Twitter.

 

Well, Dear Reader, this coming Thursday marks the end of the world. Forget the phony Mayan Apocalypse. Sequestration is coming. Yeah, that’s a big word and nobody seems to actually know what it means. I’d say its unprecedented when truthfully it’s really inconceivable.

The One refers to the “sequestration” cuts as a “meat cleaver”   approach to trimming the budget. While this may be true, let’s also remember that this whole meat cleaver idea was hatched in The One’s brainpan. It was his dizzying intellect that came up with this idea. Had he not put his pen to paper on the bill that became law with his signature, his government would not be in this situation.

Ladies and Gentlemen, this country has operated without an annual budget for the entire administration of Barack Obama. His government has run TRILLION dollar deficits every single day of its existence and projects to run those same deficits for as far as futurists care to predict. Here’s the biggest joke: even with the “sequestration” meat cleaver, the Federal Government will spend more money this year than it did last year. Don’t take my word for it, the big brained people over at George Mason University have run the numbers.

But, never mind the facts and figures. At midnight on Thursday the world will stop spinning on its axis and everything and everyone will be hurled into space. Mayan Apocalypse? Hell, ancient predictions of fire and brimstone ain’t got nothin’ on big bad Sequestration.  Here’s a preview of The One’s upcoming press conference:

Florida Senator and GOP rising star Marco Rubio will deliver the Republican response to President Obama’s State of the Union address next week.

The response is a chance for Rubio to assert his brand on a national stage, a chance to show that he’s ready for prime-time – or is that primary time?

The last time a young, star-in-the-making Republican gave the opposition response to Obama’s SOTU after election was in 2009, when Louisiana Bobby Jindal gave a performance that set back his reputation by years.

So will Rubio succeed, or will he Jindal?

Calling Dusty Harry’s Bluff

By

Filed Under POTUS on Aug 2 

Dusty Harry has taken it upon himself to carry 55 gallon drums of water for the current democratic party attack meme that Mitt Romney is hiding something deep within the dark recesses of his past tax returns. Rather than accept the fact that Mitt made more money before breakfast today than Dusty Harry will make in a lifetime, Dusty Harry has decided to start the rumor that Mitt is hiding the secret that he in fact paid no taxes at all over the past decade.

And the source for Dusty Harry’s accusation? Well, on Tuesday Dusty Harry cited a “Bain Capital Investor” who allegedly called Dusty Harry and told him Mitt “didn’t pay any taxes for 10 years”. Today Dusty Harry went on the floor of the US Senate and doubled down. Said Harry:

The word’s out that he hasn’t paid any taxes for 10 years. Let him prove that he has paid taxes, because he hasn’t. (Emphasis Added)

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The headline above is the headline of an Obama Administration press release distributed only a few minutes.

I do not care what the issue is, the attitude and actions of legislating by executive order rather than by the process established by the Constitution is wrong. The President of the United States dictating laws from his desk are the actions of just that–a dictator.

When the curtain went up on Obama Theatre’s latest presentation, staged at a town hall meeting sponsored by LinkedIn.com, the performance was the same as it has always been. A theatre critic would describe Obama’s act as tired, tedious, and repetitive. The President delivered the same stale routines and predictable themes upon which he’s long relied. There was nothing new, nothing creative. His message was inescapably vacant and laughably sophomoric. 

Yet one scene stood out, wherein an obvious cast member sheepishly asked Obama, “Will you raise my taxes?” Read more

Let me ask you something. How well would a construction worker do his job if he was handed a scalpel for his daily responsibilities? Obviously not very well. This morning I was watching the construction going on across the street from my Foggy Bottom apartment and it reminded me of all the times I have heard we need to use a scalpel instead of a wrecking ball when it comes to our budget.
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For the record, reports of my demise have been slightly exaggerated. I have been up till recently suffering from a combined attack of employment, academia, and travel which has left me time sufficient only to pound the steering wheel or throw pillows at the television screen when I have been assaulted by The One’s endless speechifying. I’m beginning to think presidential addresses should come with a warning screen prior to the actual event.

Yesterday was Monday and thus the scene of yet another TelePrompTer show at the White House Rose Garden. Has anybody checked to see whether TOTUS now has a permanent pole mounted amongst the roses? I’m just curious.

But I digress. Where was I? Oh, yes. Roses.

There is a well used section of the liberal playbook entitled “Class Warfare”. This involves convincing the public that all of their problems can be traced back to some rotund Wall Street hedge fund manager who owns six houses, three stretch HUMMERS, and a fleet of private jets. This demographic, dear reader, doesn’t pay its “fair share” of taxes and that’s why the American economy is stuck clinging to the edges of the drain.
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Unless you’ve been living under a rock, you have probably heard about the Solyndra scandal.  It’s being touted as Obama’s first scandal, well at least the first one that has known ties to the White House.  How will this impact 2012?  Or will it just blow over by then?

Seriously folks, more often than any other pundit, Peggy Noonan pitches a tent in my head, steals my ideas and writes brilliant columns. Her latest is exactly what I would have said, only more betterer.

Noonan: They’ve Lost That Lovin’ Feeling

So much for ‘freedom of the press’.

This episode makes the President look like Joseph Paine.

President Obama made the correct decision in sending Navy SEALs into Pakistan to kill Osama bin Laden. But was it the “gutsy call” the media, and the administration itself, has led us to believe? Logically and politically the President had no alternative.  Read more

HT to Ryan Markey.

This is too much. Just hours after the news that Osama bin Laden had been killed in a firefight with U.S. commandos, John Brennan, the White House counter-terrorism advisor, hailed President Obama’s “gutsy call,” giving his approval for the Special Forces mission to proceed. If you go to www.gutsycall.com, guess where you’re re-directed? Go ahead, go to www.gutsycall.com and see what happens.

I often wonder what the real motives of politicians are. The healthcare law that was supposed to be the end-all and be-all of all laws, touted as the best way to help all Americans does not provide health insurance for everyone and as of today has 729 approved waivers to the law. These waivers create a competitive advantage for those companies and unions, which the list is littered with, that the Obama Administration deemed as above the law. This is how free markets are destroyed. It is another kind of economy altogether when the government picks the winners and losers.

Today a new report has surfaced of Obama’s plan to tax every car by the mile driven, pathetically titled: “The Transportation Opportunities Act”. Combined with today’s historically high gas prices, this makes absolutely no sense whatsoever. It is clearly an economically destructive policy. However, in reality, through regulations and exemptions, winners and losers will again be picked. The friends and donors of the politicians will be just fine and the rest of us will have to survive on even less.

Or the President simply wants to destroy our economy. It does not make sense.

I’m stunned no one has posted on this yet. What’s your take on Obama’s decision not to release the Osama death photo?

After the initial reaction dies down, does the death of Osama Bin Laden at the hands of United States commandos help the flagging Obama administration?

Could this be the foreign policy victory he needs to jump start his reelection campaign?

What say you people out there in PD land?

I would like to think that my Sitemeter rated sixteen readers have had the question of “Whiter Cordeiro?” in the back of their minds over the past few weeks. Actually I’m not quite that naïve. Lately I’ve been suffering from an acute attack of business related travel and grad school assignments that have kept me off the grid. I have crossed this great nation a few times – to the sun swept beaches of San Diego to the heart of Texas in Houston and most recently to the green hills of Louisville, Kentucky.

In these travels I have done my level best to violate every single premise of the Obama Doctrine. I have eaten as much as I wanted. I have driven my SUV (rented and company owned) as much as I wanted. Whether in California, Texas, or Kentucky, I have kept my hotel room at a balmy 68 degrees and frankly I didn’t much care what people in “other countries” had to say about my actions.
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A few months ago, I wrote “Why President Obama can blame President Bush“. However, I was somewhat criticized–and rightfully so–that part of my argument was a matter of correlation that may not necessarily imply causation when I presented this chart (also below) as evidence of minimum wage’s effect on unemployment, thereby blaming President Bush rather for contributing significantly to the worst unemployment in the United States since the early 1980s.

Unemployment-and-Minimum-Wage

Now, over at Political Calculations, they have done the math to show that “the federal minimum wage hikes of 2007, 2008 and 2009 account for 41.8% of the total reduction in jobs seen since 2006″ or 2,234,383 total jobs lost.

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This nation has become great because it was a nation founded on laws, not on men, a nation where all were considered equal. However, in today’s society we seem to think “all [people] are equal, but some [people] are more equal than others“.

Today in our country only 53% percent of all workers pay 100% of the federal income tax bill. Therefore 47% of workers pay no taxes. Additionally 40% of workers actually receive additional funds when filing their taxes redistributed from the group that pays all the taxes. I’ll even point you to that evil conservative news source NPR for this data (though it is widely available).

Further, in research released yesterday, “government social benefits . . . were equal to 35% of all private and public wages and salaries in the 12 months ended January, up from 10% in 1960 and 21% in 2000.”

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