Yes, there is such a thing as an economic environment, and psychology. These are not “Obama’s jobs.”
When Obama came in, the Democrats had already had a jackboot on the neck of the economy since 2006 (including talking it down and things like Schumer helping start the bank runs), and when business (mainly small business) saw that Obama was going to be elected, they pulled in their horns to weather the storm that they hoped would last only four years. It turned out to be eight (though it was mitigated somewhat by the mid-term losses of the party of War On The Free-Market Economy). Despite Paul Krugman’s hilarious prediction, for which he should rightly be mocked until the end of time, the post-election market rally was because she lost, and this boom is part of that relief, despite Trump’s own anti-market instincts.
[Noon update]
Related: It’s an older piece, but Democrats can’t win until they recognize how terrible Obama’s economic policies were.
In other words, they can’t win.
That’s even in the face of Trump’s chaotic start. I think that tells you a lot about how much Obama was holding back the US economy (and how much Clinton would have held it back as well, since the serious job growth didn’t start till after the election).
The government can not be a net producer of private sector jobs. We keep hearing claims that government programs create jobs but it’s the old “what is seen and what is unseen” situation from the Broken Window Fallacy. Before the government can spend money, it must first take money from the economy in the form of taxes and borrowing. We’re told of the jobs created by the spending programs but no one talks about the jobs that were destroyed or not created due to the government talking money from the economy.
About the only thing the government can do is to reduce the barriers and burdens to businesses. These burdens include some of the highest corporate tax rates in the world and the burden of complying with untold thousands of regulations. Trump has promised to reduce the government burdens on businesses and so far, he’s living up to his promises. As a result, the stock market has boomed, consumer and business confidence is higher, and jobs are being created. Imagine that, the government eases its boots on the necks of businesses and people approve.
Before the government can spend money, it must first take money from the economy in the form of taxes and borrowing.
This applies to healthcare and insurance as well. Then the money churns through a number of hands before it makes it to the people who need help. Tax credits could be a moderately better way to help but not sure it matters with the government still trying to manage the market.
About the only thing the government can do is to reduce the barriers and burdens to businesses.
Everyone should try, or at least go through the motions, of starting a business. Even the simplest of businesses are excellent examples of how large a burden regulations are, whether they are good regulations or not. Knowing what taxes you have to pay to be self employed or the hoops you have to jump through to hire your first employee might open some people’s eyes.
The multiplier effect has been a proven factor where net benefits occur.
“Manufacturing Leads Economic Growth
While factory sector employment may not provide politicians the cover they need on the job creation front, they are still correct when they tout manufacturing’s crucial role in the economy. That’s because no sector does more to generate broad-scale economic growth — and, ultimately, higher living standards — than manufacturing.
Nothing demonstrates this more than manufacturing’s multiplier. A sectoral multiplier effect tells us which companies and industries give the economy the biggest bang for the buck, literally. Every dollar of output in a sector generates a certain level of economic activity across society — sales and purchasing transactions that lead to a direct and indirect need for employment and resources within other facets of society.
Because manufacturing has so many substantial links with so many other sectors throughout the economy, its output stimulates more economic activity across society than any other sector. That’s a major reason manufacturers play such a critical role in growth. As factory output grows, it requires more inputs from mining and utilities and suppliers and creates job and investment opportunities in all the other sectors that use its products, such as transportation, construction, and retail. It also spurs growth in services such as finance and transportation.
http://www.industryweek.com/global-economy/competitive-edge-manufacturings-multiplier-effect-its-bigger-you-think
The multiplier effect has been a proven factor where net benefits occur.
In the context of the meat of your post yes, there is a multiplier effect. The exact impact of it is highly uncertain. But conflating the creation of goods and services and sold on the market as being the equivalent of the government spending money, is the wrong way to look at the multiplier effect.
Any honest economist would also note the uncertain nature of the multiplier effect when it comes to government spending, especially since it is based on the belief that the government will spend that money more productively than the people whose money was taken.
Manufacturers create a product. People buy their products because they add value to their lives or businesses. Yes, the existence of manufacturers benefits other companies that supply them. There is a voluntary exchange taking place where each side benefits.
That is not the same situation created by government spending and shouldn’t be looked at as such.
As factory output grows, it requires more inputs from mining and utilities and suppliers and creates job and investment opportunities in all the other sectors that use its products, such as transportation, construction, and retail. It also spurs growth in services such as finance and transportation.
Notice that Obama and the Democrats have been targeting the inputs with punative regulations. Mining, logging, electricity generation, fuel production, and agriculture just to name a few, have all be targets of Obama’s policies. Reducing the punative attacks against these sectors of the economy will lead to increased growth and that is something the economy is reacting to right now.
Pretty much all of the sectors you listed have been under attack, even transportation, financial and other professional services.
The part of the War On The Fee Market Economy, fighting the party of Not Necessarily In Favor Of The Free Market Economy.
As I understand it, corporations were sitting on trillions of dollars they normally would invest in their businesses for expansion etc because they never could be sure how Obama was going to screw them next. Since he kept doing that, they were right to be conservative and not take risks.
Now that they have a businessman in the White House, they can invest more confidently.
A lot of US corporations have large sums of money that they’re keeping overseas, mostly due to the incredibly high US corporate tax rates. Trump wants to lower the top rate from about 39% to 15%. That, along with reducing the burden of regulator compliance, could go a long way towards getting businesses to return to the US. People respond to incentives, and the chance of being profitable while doing business in the US is a strong incentive.
I feel I am part of that dynamic, even if in my own little way. For the past eight years, I have been telling the portfolio manager of my modest retirement fund to invest safely and unadventurously. Now, I feel more free to add a little risk. Scale that sentiment some multiple of 300 million times over the population, and it becomes substantial.
It’s like having a lugubrious coach for your youth team telling you we mustn’t try to win, and must tie leg weights around our ankles to make sure we do not have an unfair advantage, versus having one tell you to get out there and hustle and give 110%.
Or you guys could just honestly admit that you didn’t like Obama because he is black.
And for good measure admit you hated Hillary because she is a woman.
Oh, look. A moron showed up at my web site.
My mistake.
What I should have said is that you hated Obama because he is a Muslim who wanted to take your guns and impose Sharia law (funny how he never got around to doing this). Or maybe because a successful Black man makes uneducated White failures feel inferior.
And that you hate Hillary because you assumed she was a lesbian (the same reason the Right hated Eleanor Roosevelt). Or maybe because strong, intelligent accomplished women make unemployed and poorly educated white males feel emasculated.
I see our little village has acquired a new idiot.
My thanks to dpd for demonstrating the ideologically inspired stupidity of the Left.
Speaking of stupidity you all do understand that this is still Obama’s economy until the stat of the new Federal fiscal year in October, don’t you?
You are confusing budget cycles with the economic confidence brought about by the election of Trump. In the real world, people don’t have to wait until October to be happy and Trump doesn’t have to wait that long before enacting his policies.
I thought it was sarcasm. Who can tell these days?
The race and gender cards hold no value here, “comrade”.
You might be interested in watching this short video recreation of Hillary and Trump debating, https://www.youtube.com/watch?v=9yC7-JsR2Fk
Spicer on employment figures: “They may have been phony in the past, but it’s very real now.”
This might as well have been most every commenter on this website. You guys are pure comedy gold.