An Incredible Number

The media parses every sentence, phrase, word and intonation of President Trump.  They are sure his exaggerations and jokes are intended to be overt lies and literal misstatements.  Actually, they know they aren’t, but they like saying so.  They are sure his righteous indignation on being falsely accused of a crime that did not occur, is impeachable obstruction of the non-crime, which – to their great displeasure and frustration – it is not.  Have you ever seen a political party wish so hard for bad news? 

Democrats are in a dark dither, a blue funk, blaming each other, blathering until they forget their own words on national television.  Now – to top off this heap of intolerable good news – the President claims we just got an “incredible number.”  And he is right – we did.

Despite best efforts of the mainstream media to color popular views of this dogged president, to fan the flames of recession, blame him for inflation that never came, turn minorities against him when he pushed their employment to record levels, slam him for no wage growth until wages started to rise, he has carried on.  Now, in a shock to the system – he has managed to deliver on another campaign promise, and it is an “incredible number.”

The US economy’s growth has rocketed over the past two and a half years, aligned almost exactly with the Trump presidential win.  Within the array of good numbers, the biggest is “Gross Domestic Product.” This number, GDP, is the combined value of all goods and services made in the United States, adjusted according to season and for inflation. 

So, after this rip-roaring economic run – which has turned the Obama crawl into a Trump tornado – here comes a GDP number for January to March 2019.  That period included a partial government shutdown, media panicking over the government shutdown, doubts following a late December stock market stumble, and a strong dollar – which usually slows exports and raises imports. 

Well, the number upended the table again – leaving media detractors, Democrat critics, and the professional economic doomsayers in a state of shock.  As reported by the Wall Street Journal, and contrary to expectations, exports actually rose – despite our strong dollar, which tends to make American goods more expensive overseas.  Moreover, imports fell, which again means Americans are buying American, not cheaper foreign goods. 

The result?  America just got – how else to say it? – “an incredible number.”  Wrote the Wall Street Journal, “GDP … rose at a 3.2 percent annual rate from January through March, the strongest rate of first-quarter growth in four years,” according to the US Commerce Department.  So, having been on a record tear, we just went from fourth gear into overdrive.

The most incredible part?  There appears to be no sign of surging inflation, which gives the lie to the old Phillip’s Curve, an economic surmise that when unemployment falls – and that happens with good growth – the inflation numbers rise.  Sorry, no cigar.  No pop anywhere in sight for inflation, which is why the Federal Reserve is also backing off interest rate hikes in 2019.  What is the point, if the rate hikes are to stop inflation – and there is almost none?

Do you see what all this adds up to?  Yes, a real and true, well-grounded Bull Market, when America’s worker productivity rises– along with real wages (not nominal or inflationary wages) – at the same time that overall growth continues to rise.  Incredibly, even with a strong dollar against all foreign currencies, our exports (quality goods and services) are rising, and our reliance on foreign imports is falling. 

That is right, this Administration’s policies – like those of Ronald Reagan three decades ago – are again creating sustainable conditions (not a one pop tax cut) where those on the sidelines come back to work, gain better wages, pay more into retirement (which is why Social Security and Medicare are now predicted to last longer), in aggregate increase tax proceeds (read: supply side economics works), and the economy booms.

The media and congressional Democrats, most of whom have no advanced degree in business or economics, and the left-leaning professional economists – are just dumbfounded.  How could a brash New Yorker, with nothing but a degree from Wharton and a billion dollar empire, walk in and show them up?  How could he assemble a team that created conditions spurring a leap in consumer confidence, and then fulfill his promise of growth over three percent?

It does not make any sense, except that – of course – it does.  Donald Trump is not doing this alone.  He believes in the American worker, businessman, and companies large and small.  He believes in lower taxes, so that more citizens can keep or give away what they make.  He believes in less federal over- regulation, so that transactions costs and so-called x-inefficiencies do not drag down profits, wages and reinvestment.  He believes in the American system of accountable and democratic capitalism.

It is so simple that, when the latest economic surge was reported, benefiting all Americans, the President was able to speak in plain English, and to the point with laconic clarity.  It was simply “an incredible number.”  The media is still trying to spin this into something that will slow down the Trump tornado, but no go.  The truth is what the President so neatly said, this was and is “an incredible number.”  And with that, we can all sleep better – except for those in the media who are befuddled.  Worry not, there will be more to befuddle the media – in the quarters ahead.