November 24, 2017
This Thanksgiving, Trump Gives His Supporters The Best Thing To Be Thankful For
The Dow Jones Industrial Average, NASDAQ, and S&P 500 all hit record highs on Tuesday. The Wilshire 5000 Index calculates that some $3.4 trillion in new wealth has been created since President Trump’s inauguration and $5.4 trillion since his election. Fueled by the reality of deregulation, expectations of lower taxes, and a new tone in Washington that applauds free enterprise rather than excoriate it, the economy is on fire.
Atop the second quarter’s 3.1 percent increase in real GDP, and 3.0 in 3Q, the New York Federal Reserve Bank predicts that 4Q output will expand by 3.8 percent. This far outpaces the feeble average-annual GDP growth rate of 1.5 percent on President Obama’s watch. Meanwhile, the IMF expects global GDP to rise by 3.5 percent this year. So much for a Trump-inspired “global recession.”
Unemployment is at 4.1 percent, a 17-year low. New unemployment claims in September were at their most modest since 1974. Goldman Sachs on November 20 “lowered our unemployment rate forecast to 3.7 percent by end-2018 and 3.5 percent by end-2019.” According to the Wall Street powerhouse’s chief economist Jan Hatzius, “Such a scenario would take the U.S. labor market into territory almost never seen outside of a major wartime mobilization.”
American companies have been expanding operations here rather than shipping jobs overseas. Corning, for instance, announced a $500 million investment in new U.S. production, launching 1,000 positions.
Foreign firms have been unveiling facilities and creating jobs in America. Insourcing is now a thing. Taiwan’s Foxconn will spend $10 billion on a new Wisconsin electronics plant with 3,000 new employees. During Trump’s recent visit to China, Beijing agreed to invest $84 billion in new energy projects in West Virginia.
If the Senate cooperates, Santa Claus will deliver $1.5 trillion in tax cuts, including a dream-come-true 43 percent reduction in corporate taxes, from a 35 percent rate to 20 percent, well below the global average of 22.5 percent. This major blow for international competitiveness should turbocharge the economy even further.
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