President Trump gave a very optimistic speech, in front of the Detroit Economic Club, announcing the Trump boom that started earlier and is coming faster than any of the critics want to admit. That’s why I call it Booming in Detroit.
Here’s how he started the speech: “Under our administration, growth is booming. Productivity is booming. Investment is booming. Wages are booming. Inflation is defeated. America is respected again. Like never before.” And in typical Trumpian style, after taking about an hour or so, touching all the bases, here’s how he ended his Booming at Detroit speech: “My spirit has been restored. Inflation has been stopped. Wages are up, prices are down. Our economy is growing, as I think you’ll see soon, like never before.”
I was delighted to hear him speak at the Detroit Economic Club. I was on a plane with him back in 2016 when he first spoke that summer. And you know, that’s the home of the heart, and it has a very big return.
As I’ve said before, Trump’s policies of tax cuts, corporate divestment, “drill, drill for the kids,” and associated trade, are working. With any luck, the fourth quarter of this year can see GDP growth after inflation of 5 percent, and the three quarters of Trump that started last spring, will produce better than 3 percent of economic growth, maybe 4 percent.
White House National Economic Council Director Kevin Hassett argues that President Donald Trump has shown ‘smart economic policy’ to ‘Kudlow.’
Businesses are booming, new factories are being built, productivity is amazing, stock markets are making records. The president is right that inflation has decreased and growth has increased. Energy prices are low and growth is up. It is full of economy. You’re right, in the fourth quarter, the CPI at the top is only 2.1 percent annually. Core level, e.g. food and energy, 1.6 percent of the annual rate.
The Fed’s goals are being met, there is room for easy money. And I would submit that the full impact of the 25 percent decline in energy, which is widespread throughout the economy, has not been fully absorbed. And Fed-phobia about rising prices has not caught up, nowhere.
Sen. Kevin Cramer, RN.D., discusses federal prosecutors opening an investigation into Federal Reserve chairman Jerome Powell on ‘Kudlow.’
In the fourth quarter, commodity prices increased by only 1.4 percent annually. And primary commodities rose only 0.2 percent. That is remarkable. There is no inflation.
And then in the face of inflation, unit labor costs are very low, just over one percent of labor costs in recent years. That means wages have gone up, but workers have gotten a pay rise for more production. It’s a perfect combination.
Mr. Trump was right, the Fed’s Jerome Powell was wrong. What else is new?
That’s why I don’t want to make a martyr of Mr. Powell. He’s a dirty Fed chairman, but he’s not a criminal. Just a bad chair. The sooner he goes, the better off we’ll all be. I don’t want him to be around a nano-second longer than he has to be.
