Stephen Moore spoke in the opening ceremonies on "Let's call it Trumponomics: Can it work for Investors and Workers". Stephen Moore is Distinguished Visiting Fellow of the Heritage Foundation. Their site is www.heritage.org. The Heritage Foundation is a conservative think tank.
He thinks that America will regain prosperity. He is optimistic of the US economy because of Trumponomics. Most politicians are charismatic in public and jerks in private. Trump is a jerk in public and charismatic in private.
He is pro-Trump. He thought the odds of him winning were 20 to one. Even on the election night at 6:30 pm Hillary's pollsters said she had a 95% chance of winning.
The single biggest story currently is shale oil and gas. The oil and gas boom has outpaced the US economy. It is a good news story. The US, Canada and Mexico will out-produce the Middle East. We will not need to buy oil from the Middle East (a terrorist region).
The falling cost of energy is great for the consumers who can now spend what they would have spent on energy on other things. The future is $50 barrels of oil. It will never go back up to $100 a barrel again. We are not running out of oil and gas. So far green industries cannot survive without massive Government subsidies.
We are in the start of a bull market. We have had the worse recovery since WWII. It has been a long and shallow recovery. In an average recovery the economy grows 29%. In the current one it has grown by 14.9%. Obama raised taxes and he raised spending. With Reaganomics, Regan said that the government is not the solution, it is the problem. Reagan grew the economy 36%. Obama grew the economy 14.9%.
Last year the economy under Obama the GDP growth was 1.6%. With Trump the economy grew 3%. It is now growing at 3.4%. The 1970's were not that flat in growth. If you take inflation into account, it went down.
Kennedy said that the tax rates were too high and the revenues were too low. This is surprising for a democrat. Current US corporate rates are high at 40% with the rest of the world having rates of 20 to 25%. Canada has corporate tax rates of 20 to 25% and US companies are moving to Canada. Ireland has rates of 12.5%. He would like to see US rates cut to 20% to make the US more competitive.
If rates were cut it would be good for the US market. There is a healthy debate going on about whether or not a tax cut is priced into the market. There is a 50-50 change of a tax cut to 20%.
We have had years of risk aversion even with low interest rates. The war on business is over with Obama gone. This is positive for the markets. Education and Health care costs have gone up a lot. They are government control but are a third party payer system. Education in Northwestern is $63,000 a year.
The years for tech to get into homes at the rate of 50% have changed. It took the phone 71 years for 50% penetration. It took the iPod 4 years. In 1987 the cell phone was like a brick and it cost $4,000. Tech will liberate people.
There is a new engine without spark plugs that will increase the gas engines efficiency by 30 to 40%. He will bet on it against the electric cars. He bets that a natural gas car will make the electric cars look like a bad idea.
If growth goes up to 3.5% to 4% then the debt problem goes down. Health case is a mess, but republicans are not good at this. There needs to be tax cuts for the republicans to retain power. He does not think that Trump will get impeached. He thinks there is only a 2 to 3% chance of that happening.
In Illinois 1 out of every 4 tax dollars go to pensioners. California is also in financial trouble.
On my other blog I wrote yesterday about Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF)... learn more. Next, I will write about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF)... learn more on Friday, September 29, 2017 around 5 pm.
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