Have Americans gone crazy? How can optimism be soaring when we’re told the future looks so bleak? The Conference Board reports that consumer confidence is higher than it was in 2007 – before the Great Recession.
Christmas spending rose at the fastest clip since 2011 – up 3.8 percent - and businesses are more upbeat too. A survey of purchasing managers noted the most buoyant investment in inventories since record-keeping began in 2007. Has everyone gone nuts?
They must not have heard the following:
- President-elect Donald Trump will start a trade war that will shatter the economy.
- Bank regulations will be trashed, allowing Wall Street to wreak havoc on innocent borrowers once again.
- President Obama’s environmental restrictions will be revoked, causing a massive increase in respiratory diseases, global scorching and the drowning of coastal cities.
- Trump will turn over our nuclear codes to Vladimir Putin the first chance he gets.
- Women will lose their constitutionally protected right to have an abortion and access to healthcare.
- In short -- Armageddon.
Maybe Americans have heard all these hysterical forecasts and have tuned them out. Maybe Americans have been emboldened by the British who ignored warnings that voting for Brexit would rain chaos and misery upon England only to find that leaving the EU might not be so painful after all.
A headline in yesterday’s Financial Times said it all: “Economists’ outlook after Brexit dims despite lack of clear damage to economy.” No clear damage, but they’re just sure Brexit cannot be positive.
Here’s what the elites fail to understand: millions of Americans (just like the Brits) are worried about the country’s future. No matter how often Obama explained the wonders of Obamacare, or the Iran nuclear deal, or the importance of his global climate accord, sensible Americans remained unconvinced.
They wanted a new leader with new ideas about how to put people back to work and bolster incomes. They now have that leader, and so far he has given them what he promised – an end to the status quo. He has made cabinet picks that are accomplished and unconventional and who appear committed to turning things around, and he has taken an outside-the-box approach to many of our nation’s challenges.
Americans hope that Trump’s controversial programs might give the country the boost it needs. Here is an important fact that Trump understands and that Obama does not: the kind of optimism he is generating can all by itself usher in a rosier economy. In fact, it is already doing so.
Back in 2009, just as he took office, Obama went out of his way to trash talk the economy. At a time when investors and consumers needed reassurance, Obama predicted “trillion dollar deficits for years to come” and portrayed the economy as hanging by a thread. He was correct that the country was struggling, but his gloomy pronouncements, which more than once triggered market sell-offs, made matters worse.
Though the economy turned around slowly, Obama never stopped reminding Americans of all that was wrong with the U.S. – our racism and intolerance, our greed and undue attention to profits, our predilection for thinking we were special. Not for him was Reagan’s optimism.
Trump’s optimism is not the kindly sunshine of Ronald Reagan, but a blustery, combative can-do positivity that is a welcome change from the uber-intellectual detachment of the Obama White House. Just as the billionaire developer was famous for convincing reluctant financiers that his next deal was going to be the biggest, the best, the most fabulous ever – and that they would rue the day they turned down his loan -- Trump has sold Americans on the promise that he can create jobs.
The Left says he lies all the time; mostly, he just exaggerates. Americans understand the difference, and for the moment, they are giving him the benefit of the doubt and hoping that even a fraction of what he promises will come true. They are upbeat, and that sentiment is carrying Trump forward to Inauguration Day with a wind at his back.
That won’t stop the incessant torrent of criticism and skepticism from the mainstream media. Democrats and the liberal media will spend 2017 trying to scare the bejesus out of Americans, warning, especially, that GOP efforts to streamline our government and cut down on duplicative and excess rules will undermine health and safety. They will portray any loosening of the regulatory knot as “prioritizing billionaires and big corporations” as Senator Patty Murray recently put it – a threat that any self-respecting Democrat should oppose.
Millions know this is pure baloney – that the nightmarish layers upon layers of rules imposed on businesses have crushed our entrepreneurs and deadened our animal spirits. This is not fantasy; the numbers prove it out. Sluggish business investment has been a drag on the recovery for years.
For 2015 overall, business spending rose only 2.8 percent. And 2016 saw further retrenchment. Only the Ivory Tower set- people who have never created a job or built a business – dismiss the critical need for regulatory overhaul.
Obama has paid lip service to the negative impact of regulatory overload – even as he has gone about spinning them out at a record clip.
Trump promises more than lip service, and his pledge to help businesses has already boosted morale. In the two weeks after the election, the NFIB index of small business optimism recorded its sharpest surge since 2009. For those managers following the presidential race, expectations that business conditions would improve jumped from -6 to a hefty +38.
If those folks put their money where their optimism is, Trump will be well on his way to producing the kind of economic acceleration he has promised. But don’t expect Democrats to applaud.