The Trump effect 2

… working already, even before he has been inaugurated.

The steel industry is willing to re-hire 10,000 steel workers now that Trump’s de-regulation agenda fires optimism in the market.

And steel shares are soaring,

CNBC is notoriously no cheerleader for Donald Trump. Here’s its own text:

United States Steel would like to accelerate its investments and hire back laid-off employees now that Donald Trump will be occupying the Oval Office, CEO Mario Longhi told CNBC on Wednesday.

“We already structured to do some things, but when you see in the near future improvement to the tax laws, improvements to regulation, those two things by themselves may be a significant driver to what we’re going to do,” he said in an interview with CNBC’s “Power Lunch”.

In addition, the belief that the U.S. economy can grow at least 3.5 percent also adds to what the company can do, Longhi noted.

“I’d be more than happy to bring back the employees we’ve been forced to lay off during that depressive period,” he said, which “could be close to 10,000 jobs.”

In a statement to CNBC later, U.S. Steel clarified that Longhi was “referring to the American steel industry overall, not just to employees of United States Steel Corporation”.

Shares of the Pittsburgh-based company have soared about 80 percent since Trump’s stunning victory on Nov. 8. Investors appear to be betting on increased infrastructure spending, which the president-elect has promised, as well as further restrictions on China-produced steel.

Corporate America is also cheering Trump’s promises of less regulation. Longhi said regulation has a role to play, but believes it “has to be done smartly”.

“When you get into some situations where we’re being asked to control some substances in water that are far lower than what nature naturally offers, that’s irrational,” he said.

There was a point in time in the past couple years that I was having to hire more lawyers to try to interpret these new regulations than I was hiring … engineers. That doesn’t make any sense.”

The US economy stirs and wakes.

Posted under Economics, United States by Jillian Becker on Thursday, December 8, 2016

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A world-wide populist movement 8

President-elect Trump said yesterday in his “Thank-you” speech in Fayetteville, North Carolina, that the movement he leads is spreading world-wide.

It is. And although the left-biased press wants to depict it as a “far-right” organized threat, it is in fact a genuine grass-roots movement against the all-too-established globalist ruling elite.

Among the ideas that the various groups which make up the populist movements stand for there are – and are sure to be – some that we do not agree with. There are even things President-elect Trump seems to favor that we do not agree with  – eg. minimum wage, and letting his daughter Ivanka almost bring Al Gore back into respectability by chatting with him about “man-made climate change”. But if the movement stops the invasion of the West by Islam – which requires the overthrow of the ruling elites of Europe, the reinstatement of the nation-state as an ideal, the disintegration of the EU, and ultimately the destruction of the UN – we will regard the occasional ideas and actions we don’t like as side-issues and complaint about them as nit-picking.

In Italy even groups on the Left are rising against the tyranny of the EU and the government that connives with it.

Chris Tomlinson writes at Breitbart:

Following the results of the Italian referendum Sunday night, hundreds of protesters took to the streets of Rome demanding that Italy leave the European Union.

Left wing protesters gathered outside the parliament of the Eternal City after it was confirmed that the No vote had defeated the government of Prime Minister Matteo Renzi and their plans to reform the Italian Senate. Protesters held banners telling the government to respect the vote …

Many of the protesters also demanded the resignation of the Prime Minister, who at a press conference after the announcement of the result, said he would tender his resignation to Italian President Sergio Mattarella explaining, “When you lose, you cannot pretend that nothing has happened and go to bed and sleep. My government ends here today.”

The result of the referendum could lead to snap elections as early as February and the growing popularity of the Eurosceptic Five Star Movement* has many worried the Italians could vote to leave the political bloc as Britain had done earlier in the year.

Tensions heated up between protesters and police stationed outside the parliament and ultimately the authorities decided to shut the protest down.  Three individuals were taken into custody by police as other demonstrators yelled “shame on you” to the officers.

One of the student leaders of the protest, 27-year-old Michele Sugarelli, said:

Brexit was not a vote against Europe, it was a vote against the EU, which takes power from the people and makes decisions against their interests. We want the same thing. We want change in Italy and in Europe. We want opportunity for young people, and we want the EU to finish.

Another protester named Pietro described the police tactics saying: “They are being violent because they are afraid. Now is a moment when the elite could fall. People don’t want any more economic sacrifices while the government preserves the interests of the banks and big corporations.”

A student named Lorenzo, who spoke at the protest said: “Everyone talks about young people, but when we actually raise our voice, this is the result.” He went on to note: “I don’t think the EU will survive the next few years. In Italy, everyone hates this thing called the EU. It is falling apart and we hope it happens quickly.”

*From Wikipedia:

The Five Star Movement –  Movimento 5 Stelle (M5S)  – is populist, anti-establishment, environmentalist, anti-globalist, and Eurosceptic.  Its members stress that the M5S is not a party but a “movement” and it may not be included in the traditional left-right paradigm.

We cheer it on, even though we do not like its environmentalism.

Crony capitalism or not crony capitalism? 6

President-elect Trump’s “wildly popular” deal with Carrier has elicited sharp criticism from some conservatives, notably from Ben Shapiro (who has consistently displayed antipathy to Trump), and more surprisingly from Sarah Palin.

They accuse the president-elect of “crony capitalism”.

We quote the Investor’s Business Daily editorial opinion of the deal:

President-elect Trump’s deal with Carrier isn’t important because it saved 1,000 jobs. It’s important because of the message it sends to businesses everywhere: Help is on the way.

The reaction to Carrier’s decision to retain some of its employees after meeting with Trump has been amusing. On the one hand, Trump’s critics say the deal was a mere trifle, since there are still so many people out there hurting. On the other hand, they claim that Trump is acting like a third-world despot.

A few headlines paint the picture:

“Trump’s Carrier Victory Is the Economy’s Loss”

“Trump’s Carrier deal is right out of Putin’s playbook”

Is Trump’s Deal With Carrier A Form Of Crony Capitalism?

“Trump Cheered for Carrier Deal Even as Other Jobs Are Trimmed”

“Bernie Sanders: Donald Trump ‘Has Endangered’ U.S. Jobs With Carrier Deal”

The White House, meanwhile, sniffed that saving 1,000 jobs was a mere fraction of all the manufacturing jobs supposedly created on Obama’s watch. (Earth to White House: Trump isn’t even president yet. Plus, there are 300,000  fewer  manufacturing jobs today than when Obama took office in January 2009, according to the Bureau of Labor Statistics.)

To be sure, we are not thrilled with the fact that Indiana agreed to cough up $7 million in special tax breaks for Carrier to keep some of its jobs in the state. It’s a misallocation of resources that only encourages companies to hold states for ransom. But this is, unfortunately, a routine practice among state governments these days. And Democrats can hardly complain about it, since their only recipe for growth is to hand out special tax breaks to companies that do their bidding.

Nor are we fans of Trump’s threats to impose tariffs on companies for making products abroad — since the only people hurt by such tariffs will be the very working class families Trump is claiming to champion.

But listen to what Carrier said after meeting with Trump. It said its decision was made possible “because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate.”

If that’s the message Trump is delivering to business leaders, we should all be cheering

It means an end to eight years in which President Obama, instead of supporting U.S. companies, arrogantly scolded business leaders and treated businesses as either piggy banks to be raided or as enemies to be brought to heel through regulations and mandates. We’ve seen the effects of Obama’s approach — eight years of dismally slow growth, stagnant wages, and a surging population of labor-force dropouts.

What’s more, if Trump succeeds in cutting business taxes, allowing companies to repatriate money parked overseas, and easing the regulatory burden on job creators — as he’s promised — he won’t have to browbeat companies into keeping jobs here, because they will already be doing that, and creating millions more.

We can hardly wait to see how Trump’s critics try to put a negative spin on that.

And we have canvassed opinions on this issue among those of our like-thinking Trump supporters who are also free-market economists, and here is a summary of them:

This is not “crony” capitalism. This is all about reducing Government Tyranny to keep business in this country.

It is basic economics. Pro-business tax and regulatory reforms are now certain to be a part of the first 100 days of Trump’s administration. Carrier has to make a clear business decision not just about building furnaces but in all of their business dealings. If you want government contracts you need to not only be competitive with those contracts but you have to qualify even to bid. If a new administration gives preference to American-made, or to companies that keep jobs in America, that is just good policy, not crony capitalism.

If you do the math on it, this deal is win/win and quite compelling (even without including the supposed threat of 6.7 billion in other business). If you take 7 million dollars and divide it by the number of jobs saved (1100) it would cost the state of Indiana $6,363.63 for each job saved. The tax savings is spread over 10 years so that cost is $636.36 per year for 10 years. This cost is easily offset with the potential savings to unemployment insurance, state agency relief for families, health care costs, food stamps etc. This also does not consider that instead of 1100 people drawing from the system they will continue to pay into it. Not to mention the fact that the Carrier plant will continue to be a consumer of goods and services from the local community and continue to pay taxes in excess of their credit. And instead of all those dollars going to Mexico for producing these products, they’ll stay in the US. That has an exponential effect, a clear benefit that is difficult to quantify.

Then there are all the businesses in the area of the Carrier plant that support the 1100 families who will continue to work and spend money in their local communities. Those businesses will not see a dramatic drop in their business as those 1100 families no longer will need to scrimp and save just to get by. Plus Carrier has pledged to spend 16 million on facility improvements which will no doubt help the local economy. This will help everyone in those communities which in turn benefits the state of Indiana directly in the form of taxes.

This deal was also very good for Carrier as it turned a PR nightmare into a huge positive for them. They will likely see an increase in sales when they might have been expecting a decrease (as a backlash to their action). It may even help them to get more government contracts for being willing to work to save American jobs.

So in truth it likely cost Indiana nothing and might even be a windfall. It is the kind of “outside Washington” thinking that will likely turn this country around.

Posted under Economics, United States by Jillian Becker on Tuesday, December 6, 2016

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Reagan’s instinct, always sound 5

trump1

Posted under Miscellaneous, United States by Jillian Becker on Monday, November 14, 2016

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