2019: Recessionary Forces Cannot Be Halted

Economic Forces Affect Political Outcomes

If you look inside the economy, you need to find more than an empty box.

The US economy and how it functions is truly a mystery to most people. For the most part it operates on faith. For politicians, it is generally taken as a granted. When a recession strikes, no one knows what to do.

The outcome of the 2020 Presidential Election hangs in the balance, and Trump has less than 6 quarters to turn things around in a major way, or Trump will become the first one-term President since G.W. Bush.

The data is very clear. It extends all the way back to the mid 70’s, and it is a nearly perfect indicator for POTUS election results. I have written about it in the past. It has not changed. The rules are rather simple.

Corporate Profits Are Mediocre

If corporate profits as reported by the Bureau of Economic Analysis is growing by more than 6%(more or less) year over year, then the party in the White House will maintain control of the White House. The ONLY exception to this rule since 1972 is Gerald Ford, who was tossed out of office because of the overwhelming desire for any new direction after Nixon’s resignation.

With that in mind, those that hold the office of POTUS really need focus on a few major things, and one of the most major things is the real health of the underlying economy.

Why corporate profits? It’s simple. Businesses are in business to grow profit. No one should run a business just to maintain the status quo. But watching the major financial networks, it becomes clear most are clueless to this rather simple truth.

But the networks seem to focus on two numbers that mask the real performance. The first is the top line, or sales. The second is the earnings per share. Both of these numbers are not worth 1/2 of what weighting analysts have placed upon them. Why?

Sales can rise 30% per year. But if you are not bringing any more profit per sale to the bottom line you are just working hard for the same result.

Earnings Per Share are Misleading

Earnings per share can make a company with less profit look like they are doing better than they really are. If a company’s earnings fall 3% but they buy back 4% of their shares, then EPS will rise. And this false signal seems to be embraced by analysts at every turn.

So why are we headed into a recession? The costs of doing business are rising, and rising fast, and there is nothing that will put the brakes on those pressures.

Back in 2008, the same two factors that accelerated the market collapse are happening once again. What are those two factors? Interest rates rising and minimum wages rising.

There has never been more debt being held by Americans in our history. And the increases in rates, while they appear small, relatively speaking, are really huge in their outcomes. Rates rising from 2 to 2.5% for instance, results in a whopping 25% increase in your interest costs. That is not insignificant.

Minimum Wages are Rising

Minimum wages increases, however, are going to push the economy over the edge. These increases are not happening because businesses have chosen to pay employees more because A) they are more productive and B) it is what is needed to get employees on the job. Rather it is the worst of reasons: despite the economic realities, government mandates it.

Minimum wage is increasing in 21 states in 2019. And by much more than what the rate of increase was back in 2008.

https://www.businessinsider.com/minimum-wage-2019-state-map-2018-12

Politicians never seem to grasp the affect of these mandatory wage increases on businesses. And the businesses they most affect are the ones with some of the lowest profit margins in our economy: Restaurants and retail sales are going to have to raise their prices to maintain their profit margins, despite the workers only producing as much as they did last year.

That of course, will inject just a bit more inflationary pressure into our economic system, which will put even more pressure on the Federal Reserve Bank to raise rates even higher.

We know that the the odds of states and cities reversing course and lowering the minimum wage is near zero. As for the Federal Reserve, who knows what they will do? They do not even know what they are doing today.

If Trump (and most of the Republicans) want to maintain the White House in 2020, they better start acting now to lower the costs of doing business in the United States. They will need to see this recession end quickly, which means it needs to be officially acknowledged sooner rather than later.

The summer of 2019 needs to be the low part for the economy. The rate of Federal Debt growth must be slowed dramatically. Home grown energy needs to be deregulated. The constant increase in local sales taxes fuel taxes and property taxes need to be reversed just to have a shot at this objective.

Otherwise, this recession is going to be far worse than 2008. And no business is actually prepared for that.

And I’d wager good money that no state or local governments are either.

On the Cusp of a Recession, Washington Fiddles

Can’t blame Trump the impending recession.  But he took the bait and credit for the “trump rally” when he should have kept a more realistic tone.  He already had won the presidency.  But the media and the left will make sure he owns it.

There are many hard decisions that must be made. Repeal Obamacare, lower taxes, reduce regulations. Curtail the EPA.  Not any one piece of legislation can cure what ails us.

The US is like a patient that has been given a prescription for every little ailment. Some politician complained and a “prescription” was written into law.  And now all the “solutions” are interacting to make the patient sick. Continue reading

Repeal Obamacare But Do NOT Replace It

Republicans in Congress are painting Americans into a corner they will never be able to get out of with Obamacare.  The paint will never be dry, and we will always be stuck with a horrific piece of legislation.

Why are Republicans playing this game with our future?  Do they truly believe that they can, via government, provide a better social program than the Democrats?  What happened to Free Market principles.

First, repeal Obamacare completely. Continue reading

Rally Behind Trump and Destroy the Government Party

One after another, the politicians I think I could respect eventually show me their true colors and that they WILL CONFORM to to the hidden leadership of the Government Party (Democrats and Republicans working together behind closed doors) that none of us elect.

How does the Government Party maintain this control over the elected politicians?  The formula seems to be rather simple.

  1. As soon as a new person is elected, get them to toe the line or they will be given lousy assignments, their legislation(no matter how appropriate) will never see the light of day and your district or state will suffer the consequences of base closings and less federal dollars returning home.  Essentially “We will make you appear ineffective”.
  2. The sub parties of the Government Party(Democrats and Republican to you and I) will pressure the big contributors to cut you off and fund challengers if you are not a team player.
  3. Bully, threaten and coerce you to conform behind closed doors, and if that doesn’t work, they will do so in public.

Only a true outsider has a chance to stop that, and only from the White House. Why?  Those that are elected officials have already joined the Government Party.  Those that do not will take a verbal assault from everyone on both wings of the Government Party.

Think Sarah Palin.  Think about the assaults she still gets today from both sides?  Why?  She threatened everything because she did not win her State’s to[ job by playing their game, and if elected, that would have weakened the Government Party going forward.  Everyone in the Government Party knew it.

Who’s Afraid of Sarah Palin (And Why)

The frequent and persistent use of the Veto by the next President of the United States(POTUS) will be the ONLY thing that is effective.   It has to be used not with reckless abandon, but with clear determination to reform and reshape what the Government Party produces.

Will the Government Party work for months to get something passed that is clearly wrong for America(They do this all the time btw), and have it vetoed, only to have to work another month to override the veto?  They might do this once, twice or more.  But they will soon figure out that this game is changed.  The electorate (you and I) will know who is clearly going against the Constitution and the will of the people.  We will then have the clear reasons to send them packing.

There are only two ways to break the Government Party and its iron-fist of a hold on the throats of the American taxpayers and citizens: Top-down and bottom up.  Here’s the best chance we have had to change it from the top-down.   Bottom up will take decades.

Of the three outsiders Carson, Fiorina, and Trump, , which one do you think has the courage to say F you to that hidden leadership and their public faces? Because F you is what the American people are trying to say and they refuse to listen.

I think the answer becomes clearer by the day.  The one that they are all focused on daily.  The one they are trying to destroy.  The one that they tried to back into a corner if the Republican wing of the Government Party so he would not run as an Independent.

Yes, the one they are all trying to eliminate from the race despite the fact he is leading in their polls with a strength that they cannot replicate with other candidates.

Interestingly enough, they are also attacking the “insider” Cruz who just might be the strongest contender that is willing to defend the Constitution of the United States as it is meant to be defended.

I feel for the first time that there is a strong chance I will vote for Trump instead of the Libertarian candidate for POTUS, because he IS an outsider, and he will not play the rigged game.

Trump could indeed let us down.  After all, every insider that has made it to the White House has done just that.  One hundred per cent of the time.

If he does, we can quit fooling ourselves that this country belongs to us and acknowledge without fail that it belongs to the Government Party.

Stand your ground, America. We have had enough.

This will be our last chance to save the Republic.

Destroying the Government Party will give Libertarians the opportunity to be heard.

Destroying the Government Party will all our government to be returned to We, the People.

Destroying the Government Party will give us the chance to return to a real Constitutional Government with real checks and balances.

Leave the Government Party in place, and your children will never even understand what the freedoms we have already lost feel like.

It’s your choice.

Are you willing to wait for an insider of the Government Party to rise to the Top and make changes?  That will never happen.

Or are you willing to sound a clear and decisive shot at the Government Party that will break it into pieces?

If so, you know where your support needs to be.

Do it.