Sunday, July 30, 2017

GDP Growth Uptick -- 2.6% Second Quarter

Well, well.  The second quarter GDP growth estimate is 2.6% (that's an annualized number), well above the pundits' expectations.

It is possible that this is simply a statistical aberration and that nothing is going on.  But, what if?

Recall that the Obama years were stuck at the < 2 percent average for his entire presidency.  Trump is already doing better?

Why was growth so slow during the Obama years?  Was it Obamacare?  Was it high taxes?  Maybe.  But a far more likely explanation is the extreme anti-business rhetoric from the Obama White House and the massive new regulatory environment strangling business formation and expansion.

The real engine of economic growth and employment comes from start-up and small businesses.  The Obama years sapped the vitality from that engine by overburdening regulations.  Rich folks and bureaucrats welcomed the regulatory overkill.  After all, it was all a big plus for them.  The rich no longer feared competition from other folks trying to get rich and the bureaucrats were in hog heaven, finding new regulations to promulgate daily.  Life was grand.

But, the regulatory regime doesn't hit everyone the same.  The rich and powerful love new regulations, regardless of their source.  Elitists like Elizabeth Warren and Bernie Sanders have never heard of a regulation that they couldn't get behind -- no matter the impact on average Americans.  

But for average folks (those not rich or sitting in protected bureaucratic or academic jobs), the Obama years were an unending nightmare.  Rising health care costs and rising deductibles forced many Americans to forego health care entirely thanks to Obamacare.  For others the higher premiums forced some tough family decisions.  (Bureaucrats have their health care paid and are unconcerned about higher health care costs -- not their problem). 

Meanwhile regulations dampened economic activity and job growth leading to huge numbers of Americans choosing to give up looking for work.  The only records set during the Obama years were: 1) Massive increases in student loan debt; 2) Massive increases in food stamps; 3) Health insurance costs; 4) National debt.  Any measure of well being for average Americans showed lost ground during the Obama years.

But now the Trump Administration, for all of its woes, is waging war on the regulatory state.  This is all for the good and should dramatically open up free markets and economic growth.

Maybe things have changed.  We will have to wait for more numbers.

No comments: