“Thank you, President Trump, for the crumbs.” That is what the sign that hung over a small electrical business in North Beach, Maryland read.
The message was clear, the tax cuts which former Speaker Nancy Pelosi called “crumbs” are making a positive difference in the small town located on the western shore of the Chesapeake Bay.
And in the first employment report since the tax cuts took effect, private employers reported that they had created an additional 287,000 jobs in February alone. Most significantly, 100,000 of these jobs came in what the Bureau of Labor Statistics calls the “goods producing” sector. The mining, logging and manufacturing are all advancing and growing in the wake of a combination of the federal regulatory boot being lifted off their collective throats.
Because when America makes things, wealth is created. The self-fulfilling fallacy of the Obama economic policy was that the mature U.S. economy could not grow much beyond inflation. This notion was maintained in spite of the enormous productivity increases brought on by the complete adoption of technology allowing savings and reinvestment in faster, better ways of taking ideas to the marketplace.
Yet, in spite of leading the way in innovating to a new economy, Americans were told by their government over the past few years that they had to lower their expectations to a new normal of stagnant wages, fewer opportunities and less nationwide economic growth.
What these politicians never dared tell the people was that the new normal was the direct result of federal government policies designed to export wealth creation. The politicians and administrative state regulators ignored or flat out lied about the costs of regulations with high minded sounding names which had the intended effect of making investment in resource development in the United States impractical. When combined with the highest corporate tax rate in the developed world, job creators in the United States were hamstrung and the only miracle is that the economy didn’t flat line completely.
One year into the Trump Administration businesses report having created more than 2.2 million jobs, including 324,000 new manufacturing jobs. The beginning of America’s manufacturing revival is no mistake. And it will accelerate over the next few years due to the changed environment for making things domestically.
While the tax cuts are just beginning to have an impact, Trump’s regulatory changes have created new cost certainty for businesses looking to expand or put an additional plant into production, and the February increase in “goods producing” jobs is likely much more heavily driven by these regulatory changes than the just felt tax changes. It is reasonable to expect that the re-shoring of more than a trillion dollars of U.S. company profits that have been stranded overseas due to archaic tax laws will create a debt-free capital infusion equal to about 5percent of the entire economy.
Without the regulatory breathing room, the investment choices would be harder. But continued, expanded regulatory relief, combined with mid-range corporate tax rates, available capital, and states willing to compete for the next generation of manufacturing a perfect storm for a transformative economic surge has been created.
Prior to President Trump, America had 20th Century regulations designed to solve problems from a 19th century economy, strangling the development of her 21st century economic future. As the President’s administration continues to clear away the debris of a regulatory regime which encouraged moving manufacturing overseas, the creation of between 40,000 and 50,000 new goods producing jobs a month could seem like small potatoes.
Free enterprise works, and unless the voters screw it up by electing those who view capitalism as the problem, our economy will roar and the American dream will be remembered, renewed and recaptured for our children and grandchildren.
Thank you for the crumbs, Mr. President.
Rick Manning is the President of Americans for Limited Government.
