Post by Tiglath
I miss Obama, everyday. When I see him smiling and happy with his new life,
Yes, ex POTUS Obama, and all his friends may be happy.
But a lot of citizens have been wondering why the rich and government
insiders have been doing so well, but most Americans are not gaining?
Here are some ideas.
'Jan 10, 2017 @ 06:00 AM 2,652 views
What Trump Can Do--And Can't
Rich Karlgaard ,
I celebrate innovation and growth.
This story appears in the January 24, 2017 issue of Forbes.
DONALD TRUMP SAYS he's a winner. To be a winning president, Trump needs
to fix what investor Scott Grannis calls the Obama Gap. The gap is
American growth that fell into the ditch. From 1966 to 2008 U.S. GDP
averaged 3.1% a year in real growth. Since 2009 it's been barely 2%.
Grannis notes how the U.S. has bounced back after every recession except
the last one: "Never before has the U.S. economy posted such a weak
recovery and such a long period of subpar growth."
U.S. President-elect Donald Trump answering questions from reporters,
accompanied by his wife Melania for a New Year's Eve party at Mar-a-Lago
in Palm Beach, Florida. (DON EMMERT/AFP/Getty Images)
What went wrong? Grannis ticks off the reasons: weak business
investment, low job growth, microscopic productivity gains and, despite
record-setting profits, a strange, depressive risk aversion.
What's been at fault? Writes Grannis: "Beginning in 2009, the economy
has been burdened by (1) an unprecedented remaking of the entire health
care industry (ObamaCare), which in turn has impacted the lives and
health care costs of nearly everyone; (2) sweeping new regulatory
burdens on the financial industry (e.g., Dodd-Frank); (3) a massive
increase in government spending and transfer payments (the American
Recovery & Reinvestment Act); (4) higher marginal tax rates on income,
dividends and capital gains; and (5) a huge increase in the federal debt
burden. You don't have to have a political bias to believe that these
changes could go a long way to explaining why the economy has been so
weak during the Obama years."
So weak, in fact, that about $3 trillion in economic activity that ought
to have occurred during Obama's eight years didn't happen at all--as if
it were stillborn. Three trillion dollars would have meant a lot of new
jobs, bigger raises and higher hopes. But they never happened. Grannis
says it would take eight years of 5% growth to get the U.S. back to its
3.1% trend line.
What Trump and the Republicans can--and must!--do is fix items 1-5. No,
we won't get 5% growth, but we can get a lot more than we have now.
PEDAL TO METAL--BUT DON'T MEDDLE
Trump and the Republicans can set the table for higher growth. But they
can't direct the growth--and let's hope they don't try. Trump won't have
any impact at all on what KPMG calls the Great Rewrite.
"How we interact, how we buy and sell, how we make things, how we get
from place to place" is all being rewritten, says KPMG. The Great
Rewrite is what you get when you combine accelerating technology with
Millennial wants and needs. It's a global phenomenon, and it's
unstoppable. This won't go down well with some of Trump's older voters,
who want to return to an America they once knew.
Who's going to stop demographic change? The Millennials are the first
age cohort to exceed the Baby Boomers in population. Millennials are
different, and they will have their way, as Boomers had theirs. U.S.
population is headed to 440 million people by midcentury. If you want to
stop that growth, then agree to give up your Social Security and
Medicare. There aren't going to be enough working people to pay for them.
Global population will go from 7.3 billion to 9 billion, even as it
becomes older, richer and more urban.
Then there's technology. It continues to ride the Moore's Law rate of
improvement, becoming twice as good every two years or so. On a
logarithmic scale you can see a nice straight line, going up and to the
right. But on the human scale the change is exponential. We tell
ourselves that change is a continual progression. But it has sudden
impact: robots that teach autistic children, cars that drive themselves,
drones that deliver IKEA furniture, human organs that pop out of a
replicating machine, jet engines that tell you when they need
maintenance, metals that are "grown" and never fail, live concerts
featuring new songs by long-dead artists, such as Elvis, Michael Jackson
and Prince, rendered in holograms to audiences that can't tell the
It's all speculation, of course. In reality entrepreneurs will try stuff
and try stuff again. They will be backed by hundreds of billions of
dollars in risk capital. Markets will form and disappear, as will
companies and professions. Sure, it's speculative, but the distance
between speculation and reality is fast closing.
This time the old guard sees the next wave coming. Perhaps because it's
so big and powerful. At the Original Equipment Suppliers Association
conference in Detroit a few weeks ago, I saw leaders in the automotive
and parts industry with their eyes wide open to outside change and to
partnerships with entrepreneurs. That's a new mind-set--and it's good.
Donald Trump should step out of the way.