Tuesday tidbits (in mid-September, 2022)

Being in an alliterative state of mind, here are a few Tuesday tidbits for tasting. In no particular order:

  • I read where Wisconsin Republican Senator Ron Johnson is having trouble with his reelection campaign, as well he should. Apparently, independents like myself have soured on the guy, and he is in a toss-up with Lt. Governor Mandela Barnes. To be frank, many Republicans did not want Johnson to run again (his age), but for a different reason than I have. He is such an overt supporter of the former president, many Republicans on committees he chaired have openly disagreed with his inane assertions.
  • I continue to read some folks are voting Republican for economic reasons, but they should look at historical data. Here is an easy example to find – under which White Houses have more jobs been created, Democrat or Republicans (note there have been 13 terms apiece)? The answer is under Democrats, and it is not even close. Even Democrats tend to miss this question. The economy and stock market have done better as well. Those who say the last former president did great with the economy, should note that he inherited an economy in its 91st consecutive month of economic growth, a more than doubled stock market and six consecutive years of 2+ million per annum job growth. Note Obama inherited a recession from George W. Bush.
  • I should note that presidents and legislators get too much credit and blame for the economy. They do provide some headwinds and tailwinds, but the economy is bigger than their jobs. The inflation we are seeing today has a lot to do with an inadequate supply chain. If you remember your economic graphs, when supply is low, prices go up. The pandemic hurt a great deal. To me, the tariffs imposed by the previous president and continued under the current one have upset our supply chains, where businesses had to find other sources of goods that they likely continued. I would add the Russian invasion of Ukraine has fueled fossil fuel price increases along with the continued disruption of a poorly planned and executed Brexit which has an echo effect.
  • I should also caution my British friends they are in for an even rockier road with new Prime Minister Liz Truss’ infatuation with trickle-down economics, which has been proven in five studies to have failed. The state of Kansas recently had a huge failure with this theory and almost went bankrupt before it was overturned. Per Mother Jones, “After years of budgetary ruin, Kansas’ experiment in trickle-down economics is finally coming to a close. Late Tuesday night, the state Legislature voted overwhelmingly to override a veto from Gov. Sam Brownback and increase a slew of taxes in the state.” Trickle-down economics is not the best of names, but it is better than what it was called in the late 1890s – the “Horse and sparrow theory,” meaning what you feed the horse (the wealthy) is excreted to feed the sparrows (everyone else).

Democrats keep missing a key message

As an Independent and former Republican and Democrat voter, I wish I could have the opportunity to have detailed conversations with MAGA folks. Whether folks like Bernie or not, he is going to take his message to the MAGA world. Some may not like progressive policies, but Bernie tends to speak the truth. To me Democrats have tended to be lousy marketers missing out on a key, data centric message.

Since 1921, there have been thirteen Republican White Houses and going on thirteen Democrat White Houses. Under which White Houses have the most jobs been created? The answer is the Democrat White Houses and it is not even close. I recognize presidents get too much credit and too much blame for the economy, but the data reveals over 2x the number of jobs created in those periods under Democrats. Other measures show the economy and capital markets do better under Democrat White Houses as well.

What is interesting is my anecdotal evidence shows even Democrats think it is the opposite. Democrats should be more aggressive with that message. The former president inherited an economy that was 91 months into consecutive growth with 2 million plus jobs added for six straight years. To the former president’s credit it continued, got a little better for a little while with the sugar rush of the tax cut and then returned to pre-tax cut levels, before the botched handling of COVID-19 by the former president sank it

What still amazes me about the incompetent COVID-19 handling, is the ball was sitting on the tee for the former president to do what he craves, be presidential. But, he whiffed. He proceeded to play up a hoax, endangered his own MAGA followers by holding public events, and then continued to naysay it where many of his followers refuse to consider masks or vaccines. All occurring after he confided in Bob Woodward that he knew of the dangers. And, this is the person some want to return to the White House?

So, Democrats need to seize the message. They are the party of jobs and here is the data. If they don’t, Republicans will paint them with whatever message sells. And, if Democrats don’t believe me, in 2012 Republicans were told in memo form to use the term “failed stimulus” when speaking of Obama’s stimulus package. Even Democrats believed this, but what is funny, the stimulus did not fail. Per six econometric firms included the nonpartisan Congressional Budget Office, the stimulus package was accretive to the economy.

Per Reuters – More foreign firms halted U.S. deals amid Trump administration scrutiny: report

Last week, Alexandra Alper of Reuters Financial News shared findings within a concerning report. The “report released by the Committee on Foreign Investment in the United States (CFIUS), shows that foreign companies abandoned roughly 14 percent of U.S. investments that were investigated by CFIUS in 2017 ‘in light of CFIUS-related national security concerns.’ The percentage in 2018 was 11 percent.

Those figures were sharply up from the period immediately before Trump took office. About 4 or 5 percent of such transactions probed by the committee were dropped annually from 2014 to 2016, the report showed. The Committee, led by the Treasury Department, reviews foreign investment in the United States for national security issues.”

I have raised this issue previously – when any entity makes it more burdensome to deal with, other entities will explore other options. The tariff wars are causing suppliers and customers to find other avenues. John Deere sales are down in the US, but up in South America as more agricultural products are being bought there.

On foreign investment, if we have companies jump through too many hoops, they will take their money elsewhere. These are headwinds to our economy and our growth has been softening.

Coupled with overall global softening, it should give us concern.