Less than half. From a forecast of an annualized growth rate of 2.6 percent in the U.S. gross domestic product in the second quarter, the actual rate was less than half that figure — 1.2 percent.
Sitting on their wealth. That’s what American businesses are doing now. While consumer spending rose 4.2 percent in the second quarter, business investment fell by 2.2 percent. Inventories were drawn down for a fifth consecutive quarter.
So why has President Barack Obama been crowing that it’s morning in America again? Not in so many words, of course, but he does insist that the economy is much better than it was when he took office. Given that this low bar was posted during a recession, any change would be an improvement.
Clearly, Obama has spent considerably less than half of his attention on jobs growth. And he’s been sitting on solid proposals to grow the economy. A third Obama term served by Hillary Clinton would continue the pattern of inattention and inaction.
Clinton would focus on her core principles of pandering to her base, promoting class envy and making “the rich” pay their “fair share.” She used the term again in Philadelphia. “Wall Street, corporations and the superrich are going to start paying their fair share of taxes,” she told delegates.
Really, Madam Secretary? The wealthiest 1 percent already account for nearly 40 percent of federal income taxes. Pump that to 50 percent and Uncle Sam would keep even more of their money. But what would the rich do in response?
A Wall Street Journal commentary on the latest economic report asks Clinton to disclose “which sage economic advisers have told her that raising taxes on business will yield more business investment.” Further, “Obama’s unprecedented wave of regulatory costs is another main reason business isn’t investing. Yet Mrs. Clinton promised more costly rules on finance, health care, drug prices, mandated wages and benefits, and more.”
Some observers believe Clinton would be better for the stock market than Donald Trump, whose populist bent has investors worried. Unfortunately, less than half of Trump’s agenda is related to economic growth per se, taken up as it is with illegal immigration and terrorism.
So neither standard-bearer gives an assurance that economic growth will occupy more than half of their attention in the first year in office. But Clinton has telegraphed her assurances that she won’t be sitting on the “progress” Obama made in restoring the era of big government, the era that her husband once declared as being over. She promises more of the same: over-taxation, overregulation and over-control of every aspect of American life.
At least Trump talks the talk of jobs growth. Clinton? The only jobs she seems interested in creating are those whose paychecks carry a federal government seal. The default setting in this scenario is that either Clinton or Trump will be the next president. Any questions about what they will do first would soon be answered.
As the Journal commentary put it, the investment plunge “is a signal that business is on strike, or at least depressed by uncertainty. Most CEOs will be risk-averse and conservative. … They will also hold off investing until they have a better sense of the future tax and regulatory burdens they are likely to face next year.”
So economic growth is less than half of what it was projected to be. Business is sitting things out. We still cling to the old-fashioned notion that success and economic growth should be celebrated and encouraged with lower taxes, streamlined regulations and a downsized bureaucracy.
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