THE FEDERAL RESERVE, THE TRUMP EFFECT AND THE COMING “TRICKLE DOWN” ECONOMIC BOOM

 

 
          

Since the start of Donald Trump's historic campaign for the presidency and rise to power his political adversaries from Left, Right and Center have been consistently wrong in their predictions about his fate right up to Election Day. And they haven't stopped being wrong since, as we saw on Tuesday with Karen Handel's upset victory in Georgia.

 

First treating Trump as a clown they roared with laughter when he announced his candidacy saying that his inexperience, ignorance of policy and mediocre debating skills would make him the laughing-stock of the race and  failure a certainty. Indeed, they predicted that Trump wouldn't survive the first GOP debate; that his rivals on the dabate stage - savvy, experienced, gifted politicians like Christe, Cruz, Bush, Kasich and Rubio - would cut Trump to ribbons and quickly end his run. But the exact opposite happened: he won that first debate and went on to do well in the others growing in popularity with Republicans and Independents.

 

Then they predicted that he could never surmount the opposition of the GOP establishment, the viciously, negative, hostile press and false image as a racist, sexist, xenophobic bully to win the GOP primaries; and again they were wrong as he tapped into the anger of a forgotten and collapsing middle class who wanted a President who'd reverse their fortunes and make them great and prosperous again.

 Then it was predicted that the GOPe fearing Trump would take down the party and cost it the House and Senate would deny him the nomination at the Convention and choose Ted Cruz or someone else. But again they were wrong as his support with Republican voters was just too damn strong.

 

Then in late September with Trump unexpectedly surging in the polls and tying Hillary (see) it was predicted that the "world's greatest woman" (and most qualified candidate ever to seek the presidency) would crush Trump in debate, show voters how unfit he was for office, and runaway with the election. And though HIllary bested Trump in their first debate and pulled ahead in the polls by several points (see) it wasn't enough to make the Clinton machine  comfortable that she'd win.

 
 

 So they came up with an 'October surprise' that they thought would do Trump in: the leaking of the Billy Bush "Access Hollywood" tape where Trump said denigrating things about women (he was, btw, a liberal Democrat at the time). Because of the tape and subsequent multiple groping allegations (whatever happened to them?) Trump's poll numbers took a nose dive (see) as his enemies were uncorking the champagne in expectation of a Hillaryslide.

 

But again they were wrong; as the race tightened going into the campaign's final week (Trump helped somewhat with late undecided voters by the "Comey Effect") a dire warning rang out from billionaire Mark Cuban, Nobel Prize economist Paul Krugman and other economic masterminds on the Left:
 
 
 
 
  

Trump beating Hillary would crash the Dow and world economy causing a domestic and global recession or worse.

But again from their broken, clouded, hate filled crystal balls the anti-Trumpers made yet another bad call. Predictably (immediately after the election) the very opposite occurred: the market began climbing after a slight fall, then soared into the stratosphere to record highs risng and rising as investors saw economic nirvava  ahead.

What was the reason for the sudden upsurge of investor  confidence and optimism?

IT WAS THE TRUMP EFFECT, STUPID!

The promise of MAGANOMICS: tax and regulatory relief (shrinking the size of our massively intrusive government) plus other business friendly polices (repeal of Obamacare, infrastructure rebuilding, trade renegotiation, etc.) designed to unleash the pent up GDP growth that Obamunism was suppressing.  

Indeed, Trump haters who are hell-bent on wanting to remove the President from office, or politically weaken him to the extent of paralyzing his presidency so he can't roll out with his leftist smashing MAGA Agenda, must be horrified by the actions taken by Janet Yellen (a liberal Democrat) and the Fed since the election.
 
 
Trump and Yellen
 

It's no coincidence that before the election (going back to January 2009) the Fed hiked interest rates only once (showing little faith in Obama's abysmally bad recovery and redistributionist-social justice-fake climate science policies); while since, Janet Yellen raised rates not once, not twice, but a whopping THREE times. Why? In anticipation of a "TRICKLE DOWN" economic boom like Coolidge had in the 1920s, John Kennedy in the 1960s, and Reagan in the 1980s when there was "Morning in America."

Look at this Fed timeline:

March 2016
 
 
In March 2016 Fed Chief Yellen announced that there were no definite plans to hike interest rates any time soon, after the slight increase of 0.25% made the previous December.
 
THEN CAME THE EARTHSHAKING ELECTION OF DONALD TRUMP
 
 
 
December 14, 2016
 
 
Make no mistake about it, if Hillary Clinton (who pledged to continue Obama's failed low growth bad jobs policies) was elected president the Fed rate hike of early December (one month after the election) would not have happened.  
 
Business Insider reported:
 
"2017 may be the year that fiscal policy starts to support the economy in a significant way [which it hadn't under Obama] as President-elect Donald Trump enters office. Trump has pledged to cut taxes for corporations and individuals and to invest about $550 billion [now $1 trillion] in infrastructure. Wall Street already thinks these steps will spur economic growth and inflation while supporting company earnings; stocks surged to new highs after the election, while bonds sold off."
 

THEN AT ITS JANUARY MEETING THE FED  ACKNOWLEDGES THE "TRUMP EFFECT"

 
 
"The [Fed] meeting was the first since Trump took office, following his stunning November election upset. The president's name was never mentioned in the minutes, but the broad brushes of his agenda show up often.
 
Members reported hearing higher levels of confidence in the business community. And they predicted that the expected increase in economic growth related to Trump's policy proposals could push the Fed into action [in raising interest rates]." 
 
AND SINCE DECEMBER'S RATE HIKE THE FED HAS DONE IT TWO MORE TIMES
 
Mar. 15, 2017
 
 
"The simple message is the economy is doing well," Yellen said in a press conference. "We have confidence in the robustness of the economy and its resilience to shocks..."
 
"While experts caution that President Trump's policies won't take effect until 2018, the Fed must pay attention to how financial markets perform in response to news about the policies.Trump's potential reforms have already caused U.S. stock markets to rise to all-time highs. Expectations for his policies have triggered a significant increase in business and consumer confidence."
 
June 14, 2017
 
Three Fed rate hikes in five months since the election vs. one before in the seven years since the end of the recession is an auspicious sign of what's ahead for the economy as Donald Trump battles on against titanic media adversity and keeps on winning - as his proxy Karen Handel did in Georgia on Tuesday. And as for those who fear or hope for Trump's impeachment based on some weak obstruction charge by Robert Mueller (very unlikely but not impossible in my view) keep this in mind: with the economy robustly growing and Donald Trump's popularity soaring there's no way in hell that he'll be impeached. With a prospering economy like Clinton had in the 90s (most voters believed he was guilty of perjury and justice obstruction) the chances of a Republican House impeaching a popular, successful President Trump are as remote as the Democrat Senate convicting Bill Clinton of crimes. No country wants a change in leadership when it's on the right course.
 
Get used to it Left!
 
WE'RE IN THE SECOND HUNDRED DAYS OF EIGHT MAGA TRUMP YEARS
 
 
 
 
 POSTSCRIPT
 
IMF ACKNOWLEDGES THE TRUMP EFFECT
 
 
 
WASHINGTON — The International Monetary Fund on Monday raised its forecast for the U.S. economy over the next two years, saying President-elect Donald Trump’s policies would boost economic growth.
 
 
UPDATE
 
 
 

Economic growth accelerated to an annual rate of 2.6% from April through June, the government said Friday.

 

Second-quarter growth more than doubled the sluggish pace from the first three months of the year. First-quarter economic growth was revised down to 1.2%

The economy gained steam in part because of stronger consumer spending, according to the Commerce Department. Helped by the strong job market, personal spending grew at a 2.8% pace, faster than in the first quarter.

 
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23 thoughts on “THE FEDERAL RESERVE, THE TRUMP EFFECT AND THE COMING “TRICKLE DOWN” ECONOMIC BOOM

  1. Without tax cuts, raising rates could cause disaster. Hopefully Trump will sign a tax relief bill before the summer’s end like Reagan did in Aug. 1981

  2. The worst tax on the American people right now is Obamacare. Once that repealed and replaced and corporate tax rates are drastically cut it’s clear sailing ahead to restoring prosperity and the middle Class

  3. Trump needs to clean house at the IRS-—from the top down.

    He also needs to reveal to the correct social security number holders WHO is also using their ss numbers.

    This MUST cease. Heads MUST roll at IRS.

    1. Ed Yardini is no slouch in the world of investing.

      Everything we see politically, culturally, and economically points to one thing – morning in America.

  4. As a retired gezzer, I hope Trump’s new tax brackets happen. Being able to move retirement funds to cash at 12% instead of 15%, will be an incredible help to many retirement plans, including my own.

  5. I think VP Mike Pence could talk Trump into even more radical tax reform. The prospect of enacting something like the flat tax Steve Forbes proposed 20 years ago could send the US economy into a boom we haven’t seen–possibly ever.

  6. Kudos to President Trump for wanting like Reagan and JFK to cut taxes on the rich. I much rather give tax breaks to the ones that are able to employ people like me. Anytime the entreprenurial class gets a break in taxation, we the workers get not just “cost of living” increases in our salaries, but sometimes a nice sizable payoff. It is the rich who sign paychecks. I have never received a paycheck from a community organizer, an environmentalist, or a political hack group.

    1. For Democrats, tax policy is all about politics, not economic vitality. They would rather have the class warfare issue (robbing rich Peter to pay poor Paul) than a strong economy.

      1. A strong economy means less government control. And that’s a no no for lefties who think they know what’s best for all.

      2. Most people in this country are stupid. And envious of the rich. So all the libs have to do is demonize the rich and the sheeple stand by and cheer. Facts don’t, and wouldn’t, mean anything to them, even if they could understand them.

      3. “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Ronald Reagan

      4. The “rich” they’re referring to are upper middle class wage earners and small business owners, not the truly rich ho greatly prospered under Obama.

  7. Excellent piece, Apollo. Didn’t know about Yellen’s confidence in Trump. She’s a rare lib these days.

  8. Thanks Apollo. You have such a knack for stating truths simply. I do wish somehow my liberal friends could cut through the Gordian Knot of tangled, confused thinking, and fantasized emotions to see the plain and simple truth. Actually, more than that, I wish more conservatives could be as articulate as you.

  9. America’s mortal threat is SPENDING, SPENDING, SPENDING!!!

    Greater than 70% of the spending is on ENTITLEMENTS, ENTITLEMENTS, ENTITLEMENTS!!!

    No one is willing to reform ENTITLEMENT SPENDING because the “folks” will not elect a pol who proposes to cut their freebees!!!

    Behold DEMOCRACY!!!

  10. Apollo, stop lying! We have had trickle down since Reagan. It is just the richest pissing on Americans and telling us that it is rain. Enough! Giving money to the top just takes it from the working class. The greed of trump and his staff is shameless.

    1. Liberals always revert to the nonsensical garbage that tax cuts are for the rich. The rich who already pay up to 90 percent if all taxes paid by the way in effect giving veryone else a free ride. But even if that were true what do the rich do with this money? They spend it on houses, boats, cars, gambling all of whic creates jobs. Or they invest it in their business which creates jobs. Or they invest it in stocks or equity which increases capital for businesses to expand which creates jobs. Or the stick it in a bank which lends to businesses or individuals which creates spending which creates jobs. I guess liberals are just to stupid to understand simple economics. They say they are educated but I don’t think so.

    2. Apollo is absolutely correct. “Trickle down” has worked every time it has been tried, while tax and spend has never worked. How is the 50 year $20 trillion war on poverty turned out? More poverty then ever and especially on Obama’s watch. Facts are pesky little buggers aren’t they?

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