As we step into the New Year of 2018, we leave a curious 2017 filled with economic and political contradictions.
Unemployment as presented in the media (U3 index) was about 4% but the broader measure of unemployment (U6) was double that of 8%. Workforce participation remained fixed at 62.7% which was the same as in January 2016, as well as, December of 1977. The election of President Trump was supposed to create a stock market collapse, so said Nobel economist Paul Krugman, but since the election the stock market has risen 25% and, GDP in 2017, had two quarter of growth over 3%, an accomplishment that was last seen in 2014.
Politically, Republicans were at their zenith in January, but their inability to repeal and replace the Affordable Care Act infuriated their base. Then the struggle with the tax bill allowed Democrats and media to rebrand it as a give-away to the rich. Accordingly, some polls show Republicans would lose to generic Democrats. Keeping one or both chambers of Congress in November will be challenging. However, in political time, the mid-term election is a dog-year away and Republicans believe the economy will be more the barometer of things to come politically. But while Republicans scoff that the Democrats have no message, Democrats do have an energized based, which the Republicans currently lack and, the base is crucial to win elections.
Of all the things President Trump was not expected to do well, foreign policy was it. Yet, it can be argued that he has been the most consistent, controlled, and effective in this area, especially, when compared to his predecessor. He has made the U.S. military more lethal, given pause to dangerous regimes, and inserted America leadership back onto the world stage.
For the New Year we constructively suggest a resolution for the president to put his Twitter account on a Jenny Craig diet – this could help him be more effective in governing.
With this perspective on 2017, let’s ring-in 2018 with a tone of optimism and our wishes for health, happiness, and prosperity. Be vigilant. Be free.