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Economy

Stock market tumbles and loses 2018 gains, but it’s not Trump’s fault

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Stock market tumbles and loses 2018 gains but its not Trumps fault

After reaching record highs in January, Wall Street has been on a steady decline now that Trump’s smoke-and-mirrors economic policies have taken control of the free market.

In January, as you may recall, the Tax Cuts and Jobs Act took effect with a promise it would pay for itself — a promise Paul Ryan immediately reneged on — and that it would reduce the deficit.

As we recently discovered, both of these promises were bald face lies used to pass the business-friendly but individually unfriendly tax cuts. Despite election season hyperbole, tax receipts are down .4 percent through August, or 2.9 percent when adjusted for inflation.

In addition to tax cuts, we have exploding budget deficits due to Trump’s excessive spending, which has increased 7.4 percent through August. And it was recently announced that the total deficit for FY2018 is $779 billion, the largest deficit since 2012.

No worries, however. Even though the US is cruising toward the largest federal debt-load in history, Mitch McConnell wants to assure America that he finds the deficit “very disturbing” but that “it’s not a Republican problem.”

Blaming others is a family tradition with Trump and the GOP.

White House economic advisor Larry Kudlow is blaming Democrats for the recent losses on Wall Street, and now Trump is blaming Fed Chairman Jerome Powell, calling the man he appointed to the job “the biggest threat” to his success. He also issued a warning that he might fire him.

It’s a good thing Powell isn’t in the media because in Trump’s world, that would also make him “an enemy of the American people.”

Of course, this blame game is nothing but a ploy to shift voter attention away from the reality that Trump’s economic policies are failing. His tax cuts aren’t helping workers, his spending is out of control, and his trade war is rekindling inflation and fears of recession.

Back to the Fed for a moment. After the 2016 election, Federal Reserve officials expressed serious concerns about Trump’s economic policies and how aggressive changes in the areas of taxes, spending, and trade would be inflationary and cause interest rates to rise. Based on recent news, it would appear that their concerns were justified.

Meanwhile, US stocks continued falling yesterday, extending the slide that began earlier this month and wiping out all 2018 gains. Still, Trump will continue taking credit when the imaginary economic news is good and will blame everyone but himself when the real economic news is bad.

Originally posted on StridentConservative.com.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

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Economy

PragerU: Is Denmark socialist?

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Is Denmark socialist

Not too long ago, many socialist, including presidential candidate Bernie Sanders, thought the model of the future for America was Venezuela. They saw the prosperity that the oil-rich nation was enjoying in its early days of socialism and said, “That’s us. That’s where America needs to be.”

Fast forward to today and suddenly every socialist is disavowing Venezuela altogether, claiming that the model of America was never really the model they thought it was and it’s not even real socialism. Why? Because it failed. Therefore, by the socialists’ reckoning, that must mean they didn’t do it right.

Now, Denmark is suddenly the model for America’s future. But there’s a problem. Denmark is a free-market nation that has been peeling away at its socialist foundation for decades. While they enjoy some of the most robust social programs in the world, they’re doing so at such a high price that the people are left with very little other than the essentials. Yes, they have free healthcare, but more citizens are turning to private insurance to bypass the poor treatment and long wait times associated with single-payer healthcare. Yes, they have free schooling, but grade-level students are being shifted to private schools at nearly a 20% pace while the “free” college system is being taken advantage of by those who are clever enough to realize they’re better off staying in college indefinitely than graduating and being thrown into the world of working to pay for the system.

This video by PragerU’s Otto Brons-Petersen breaks down the reality of the socialist utopia leftists often point to as their beacon of hope for a failed economic and political philosophy.

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Economy

Note to Nashville: Privatization is good, except when it’s idiotic

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Note to Nashville Privatization is good except when its idiotic

This will be the first and hopefully the last time I speak out against a government plan to privatize anything. But as much as I like a blanket approach to taking control away from government in the vast majority of situations, the plan to privatize public parking in Nashville is so loaded with problems, it shouldn’t move forward.

I first heard the details of the plan when I read about the rare occurrence of a Democratic mayor wanting to privatize an element of city government. Generally, Democrats push for more control over their territories, not less, which is why I was hoping to find an instance where the realities of limited-government federalism and capitalistic privatization was seeping into the psyche of a Democratic leader. What I found was appalling: a desperate mayor, David Briley, throwing anything he could against the fiscal walls in hopes of making it stick. His city faces a woeful budget shortfall, something that should not be happening in a city as vibrant and growing as Nashville.

But, they need money immediately to make up the shortfall before the end of the fiscal year and this seems to be their last resort following an atrocious set of attempts to sell off public land to make up the cash difference. The attempt was so botched, the city council passed a resolution preventing such an attempt from being used in the future to cover operating expenses. But now, they’re ready to push the parking privatization scheme through with a rubber stamp and hopes nobody will look closely at the details.

The latter is unlikely, as many are already speaking out. Mayoral candidate Carol M. Swain urged the city to halt the plans, clearly pointing out it’s a very bad deal:

Nashville must oppose Mayor David Briley’s public parking privatization plan

We the People of Davidson County and surrounding areas will be adversely impacted if Mayor Briley, who is up for re-election, can push through this deal that would entail a 30-year commitment.

No agreement of this magnitude should be for more than any one term of the mayor’s office.

Once they have the contract, there is nothing to prevent the bid-winning private company from also raising rates until they match rates common to larger cities such as Chicago and New York City.

As Swain noted, this is a 30-year deal that essentially turns a public revenue source into a for-profit scheme that will sacrifice the people’s control for decades in exchange for saving a single year’s budget. The loss of future revenues and control aren’t the only things at stake, though. The deal will include increases across the board for citizens of Nashville, including:

  • A rise in the number of parking spots designated as paid that will essentially double them over four years
  • Increased cost per hour by 25 cents
  • More than doubling fines from $11 to $25
  • Decreasing free parking times by four hours per weekday
  • Removing free parking on weekends
  • Removing free parking for green vehicles

The mayor is pushing the deal as a way to innovate and catch up with the rest of the nation, citing technological improvements. But any such improvements could be made by the city, as could the changes to the times, costs, and fines, so his points are moot. The reality is this: They need cash now and they don’t have any other schemes that can work this quickly.

There’s a solution to all this: cut budgets. Fiscal responsibility should not be obfuscated by get-cash-quick schemes that will harm Nashville’s citizens. Make cuts. Increase revenues long term. Make Nashville as business-friendly as possible. These are the ways that work in America. Corrupt land deals and desperate privatization schemes always hurt in the long run. This time, they’re hurting Nashville in the short term as well.

Nashville’s parking plan is the equivalent of taking an important part of many citizens’ daily lives and pawning it off to pay the city’s bills. They’re giving up 30 years of control to save a single year’s budget.

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Economy

The 1751 machine that made everything

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The 1751 machine that made everything

A short video on how technological innovation born of economic liberty has changed the world.

History is more than dates, places and battles. In many instances it’s technological advances that change the world for the betterment of all mankind. In this case it’s the story of French inventor Jacques de Vaucanson and his creation in France of the first all metal slide rest lathe, the forerunner to all modern machine tools in 1751.

Lathes had been around for centuries, but lacked the precision with hand held cutting tools. The slide rest of the Vaucanson metal lathe that provided the control to produce metal part of exacting dimensions. The lathe is said to be able to produce every other machine and machine tool. This advancement changed everything.

The producer of the video references a profound chart of World Population GCP and per Capita GCP 1 –2008 AD from data of the late Angus Maddison, similar to this produced by the  Visual Capitalist, we credit them for the chart and commentary:
Image Credit: Visual Capitalist

 

For thousands of years, economic progress was largely linear and linked to population growth. Without machines or technological innovations, one person could only produce so much with their time and resources.

More recently, innovations in technology and energy allowed the “hockey stick” effect to come into play.

The video was produced by Machine Thinking last year.

While some may quibble about which particular machine produced this miracle The larger point is that the machines of the industrial age profoundly changed what people could produce.

As the video noted the average person in 1600 was no better off economically than someone thousands of years earlier. This is what is called the Malthusian trap and for seven thousand years, it was inescapable no matter what we did.

Machine tools such as this changed all of that, one person could produce what had taken many. This surplus could outpace births, allowing the economy to grow at an incredible pace as seen in the chart. All from the genius of the mind undergirded by the Economic liberty of the free-enterprise system. This is why this is vastly superior to the societal slavery of socialism.

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