It may seem like a contradiction in terms, but the struggling U.S. manufacturing sector is finally awakening with the latest economic gross national product, or GNP, surpassing 3% for the first time in a decade.
This is happening while President Trump’s governing style is confusing at best and counterproductive at worst. The most significant of the latter is best described by the President’s low poll ratings averaging in the high 30% range. While President Trump should be given high marks for focusing on the need for reversing the considerable loss of factories and blue-collar jobs by the tens of thousands, Trump’s constant shift on domestic as well as foreign policy priorities has alienated many loyalists who are fearful of the negatives that these constant changes portend.
While in office for only a year, President Trump has proven unable to get the ball rolling on totally revised tax and healthcare structure as well as a long-overdue infrastructure update of 55,000 crumbling bridges, dams, roads and highways.
On the foreign-policy front, government policies look little better and seem to reflect constant change. The best example is the North Korean crisis, which seems to fluctuate between dire threats mixed with indications of a dialogue with Kim Jong Un. This dictator has threatened nuclear bomb extermination while violating Japan’s internationally accepted airspace.
While the recent Democratic gubernatorial victories in Virginia and New Jersey may as yet not be an indication of the mid-term presidential election results in early November 2018, a further shift against Trumpism could allow both House and Senate to slip back into the Democrats’ favor.
Should this happen, a second term for President Trump becomes increasingly unlikely, and the upset would bring change in U.S. government policies.
With foreign policies in the Middle East, EU and Far East in a state of current confusion, the stability and hopeful global future of the world-at-large may well be at stake.
While a 180-degree change in President Trump’s attitude is unlikely, such an ignorance of what awaits the current U.S. political power structure may seal victory for the Democrats despite the incompetence with which the latter are no better off.
IMF signals economic growth
With the International Monetary Fund’s (IMF’s) 2018 optimistic economic growth estimate, there is good reason to believe that this year will be the strongest economically since the end of the Great Recession. The IMF is an international organization headquartered in Washington, D.C. that works to foster financial stability and sustainable economic growth and facilitate international trade.
Its intensely analytic economic outlooks are closely watched by Wall Street investors as well as the global international communities around the world. The IMF’s highly respected reputation comes from its emphasis on major factors. These include higher borrowing costs and the constant financial turmoil in emerging markets, persistently low inflation, a constant shift toward protectionist politics and a broad rollback of financial regulations, which could have negative repercussions on global market stability.
At this early stage of 2018’s first quarter, the IMF is guardedly optimistic in the creeping momentum that began in mid-2017. Last year was modest by better-than-expected standards worldwide with eastern Asia, central Europe and Russia performing better economically than expected.
This was somewhat offset by the U.K. and France, both of which have been undergoing changes in political leadership, and economic difficulties emanating from the detachment of direction coming from Brussels, EU’s headquarters. These are increasingly at odds with the broad-based upward revisions in the EU, in general.
In late July, 2017, the IMF lowered the forecast for U.S. growth to 2.1% for late 2017 and early 2018 from a somewhat more promising projection earlier in the year. Germany and Russia, however, substantially offset that potential downward revision for the U.S. and U.K. as 2017 came to an end.
Taking the varied re-directions into consideration, such as Brexit and eastern European improvements, the 2018 economy appears to project a modest upward surge generally, but less than the 2.5% growth hoped for in the early months of the Trump Administration.
For the U.S., the exports of crude oil and liquid natural gas hold unexpectedly strong promise. This depends on the expansion of the Gulf of Mexico ports as well as the liquid natural gas conversion capability if the expected ability to reach volume records by the middle of 2018 continues.
President Trump’s objective of near-record U.S. fossil fuel production is another factor that could make a major difference in the U.S.’ overall exports, unleashed by lifting the embargo on oil and gas voted in positively in the latter days of the Obama Administration.
A hidden factor that could greatly change this modestly optimistic 2018 prediction is President Trump’s encouragement of U.S. manufacturing as well as the thousands of new jobs that would emanate from the often-promised national infrastructure development. This was previously predicted, but has not gotten off the ground as yet at this writing.
The Federal Reserve
Since the advent of America’s amazing reversal of its runaway inflation in the early 1980s, economic historians have forgotten that the Federal Reserve was primarily responsible for this unstable accomplishment.
As President Reagan called Alan Greenspan to eventually serve as the Federal Reserve Chairman for the longest term ever — 30 years — Greenspan became the critical member of the trio, along with the President and the Democrat Speaker of the House, Tip O’Neill, who would crush the runaway inflation.
All this was accomplished in a six-year period that set the stage for America becoming a world superpower, both economically as well as influentially.
Unlike President Jimmy Carter, this American trio chose expansion in global leadership rather than shrinkage, which the one-term Georgia peanut farmer had recommended.
At this current point in time, the Federal Reserve Board has played a major part in regaining America’s disinflation downturn. This has led to manufacturing employment, diminution and a minimization of annual gross domestic product (GDP) representative of predecessors’ consumption approach.
Throughout the last 16 years of economic travail, the Federal Reserve Chairman Janet Yellen and predecessor Ben Bernanke led the Federal Reserve’s multi-trillion-dollar record reversal to buoy up mortgage derivatives that had clogged the arteries of the nation’s major banks along with the additional limitations the nation’s money centers had suffered from the Dodd-Frank legislation.
They have balanced the American economy while being very careful in slowly bringing back the quarter annual interest rate increases so as not to stymie the economic comeback simultaneously. This has not only been done by a conservative return of higher interest rates, but by not dumping a significant amount of the record $4 trillion buildup on the financial markets. The Federal Reserve had built this up to provide value to the mortgage-backed derivatives that had been assumed by the Federal Reserve.
It has allowed the uplift of the U.S. economy reservedly but without the sudden jolt of quickened interest rates. These could have undercut the current economic upturn. Such could easily happen if the Federal Reserve acted too aggressively in bringing its $4 trillion balance sheet back to the $1 trillion amount that had represented the Fed’s basis for the several decades of inflation and disinflation. In these cases, the Federal Reserve Board of Directors has practiced realistic, professional direction of the deservedly highly respected current U.S. Central Bank.
A growing class of billionaires
Both China and India have also gained the world’s leading positions in numbers of billionaires. Asia’s billionaires have overcome those of the U.S. for the first time, driven primarily by China, according to Swiss consulting and accounting firm UBS Group AG.
The year 2017 was a banner year for this expanding multitude of wealth, which was up 17% over 2016 to $6 trillion, greatly overcoming the percentage increase in global equity markets and world economic growth.
While the number of Asian billionaires came primarily from China and India, they far exceeded total billionaire numbers to 637 over 2016; the U.S. increased to 563, and Europe’s billionaire ranks remained static at 342.
Asia is well ahead of both the U.S. and Europe in youth, with China’s billionaires averaging 55 years old, more than a decade younger than their European and U.S. counterparts. Globally, the average billionaire is 63 years old, up three years from two decades ago.
Despite the U.S. falling from the top spot, it still has the most wealth concentrated among its billionaires at $8 trillion total, but according to Swiss banking giant UBS, the total wealth of billionaires in Asia could surpass that of the U.S. in the next four years.
The figures in this report were based on a database of more than 1,500 billionaires. Surprisingly, much of the world’s billionaires are heavily invested among major sports franchises, including professional football, baseball, soccer and basketball. The report further indicates that more than 140 of the top sports clubs globally are owned by just 109 billionaires. Of these, 60 derive from the U.S., 20 from Europe, and 29 from Asia. More than half of the world’s sports club purchasers have been made by billionaires in the past two years. In further clarification, the average sports baron is 68 years old and possesses an average wealth of $5 billion, according to the report.
Two-thirds of U.S. basketball and football franchises are owned by billionaires, as are just under half of U.S. premier league soccer clubs.
The report further states that the immense price tags on all major sports teams makes it increasingly clear that it’s mostly only billionaires who have the financial firepower to buy such expanding sports franchises. Only these have the financial wherewithal to provide the necessary additional investments to keep such franchises up to date, according to the report. Remarkably, this is not only occurring in the U.S. and Europe, but is also getting more popular in Asia. This emphasizes that the huge value generated by both public interest and team values are gaining immense interest globally.
Raising the age of retirement
Since President John F. Kennedy’s successor Lyndon B. Johnson unleashed a plethora of socioeconomic changes in the late 1960s, the arbitrary retirement age of 65 has become the cutoff point signaling an increasing bestowal of benefits on workers of that age — an age that has been increasingly accepted as a mandatory professional retirement barrier for those receiving government and commercial benefits from private as well as government benefits.
Since more than 50 years have passed since Social Security, IRAs, Medicare and more have depended on an age that is increasingly considered more youthful in today’s work-ability and health standards, it would seem a reassessment is in order.
When considering moving beyond the 65 age block, a massive review of this arbitrary retirement age seems in order. Private and public polls taken previously indicate that over 90,000 potential workers in their late 60s and early 70s would provide expertise as well as labor participation.
But since the backlog of unfinished issues facing the Trump Administration are becoming ever more complex, it’s doubtful that the 65-year-old age barrier will be addressed any time soon. This, in itself, is a veritable tragedy since the knowhow, experience and strategic ability reposing in these tens of thousands could be invaluable.
Although tens of thousands of private independent businesses are given somewhat more flexibility than the greater percentage of conglomerates that makes up America’s gigantic workforce pool, they automatically adhere to the 65-year-old age for retirement.
Perhaps President Trump’s populist policies of bringing production, as well as several trillion dollars now in foreign banks, will create additional employment opportunities in the context of manufacturing expansion, to which the current Administration is committed.