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The Economy Unleashed

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

We’re about to get an early Christmas gift from the Federal Reserve—a rate hike in December. It’s about time and a welcomed element of a growing economy. In the past, we have seen what can happen to the economy and to the markets when regulatory burdens, tax programs that are a moving target, and government expansion around every corner are no longer a hindrance. As a matter fact, we’ve seen the presence of all these things for the last 10 years, and it has done nothing but build stagnation in the name of power, social control and intrusive government.


We now live in a world where the markets aren’t even concerned about interest rate increases or the irrelevant, predictable and politicized Federal Reserve. The Federal Reserve should be about the business of pursuing full employment and serving the economy rather than bowing to Wall Street, particular policies or the ideologies of a certain administration. The problem is, I seriously doubt if anyone—even the Fed chair—truly believes that we are at full employment. President Obama may be the only person in the country who believes that.

This time around, the financial news networks and print media are giving a bit of attention to the possibility of a December rate hike, rather than the usual sky-is-falling, we’re-headed-into-a-depression coverage. It’s amazing how smart economists get when their ideology is forced to be set aside. Everyone is aware that Donald Trump will remove the punch bowl from the party. The possibility of the Fed increasing interest rates is less relevant. For the past seven years, the Federal Reserve and central banks around the globe have been trying the exact same thing over and over again expecting different results.

What were they expecting? Expansion and growth in the economy, but they got only expansion in the markets without any real, rational reason—other than that the low interest-rate environment was here to stay. None of this was stimulating to the economy three or four years ago, when we heard over and over again that the underlying fundamentals of the economy were far better than everyone thought.


My question was this: What exactly were the underlying fundamentals everyone was talking about? Because from my vantage point, nothing was improving. We have had a global economic environment mimicking what corporations (Enron, WorldCom and others) have done. If you cook the books long enough, you begin to believe the numbers. But worse, you begin to make decisions based on those unrealistic numbers so, therefore, failure is close behind.

Central bankers, and even Wall Street traders, were so consumed with the markets that they became incapable of seeing what was happening to the middle class and the economy—a large part-time labor force, hours stuck at 35 hours a week or less, poor productivity, no wage increases, more than 90 million people out of work, a 40-year low in the labor participation rate and an ever-increasing poverty rate, not to mention seven consecutive years of 2% or less GDP growth.

But all of this almost seemed irrelevant because, after all, the markets were going up. But now, all of a sudden after a Trump victory, everyone has come to the realization that there has been no real organic growth in Obama’s “new normal.”

Make no mistake about it, I still believe that markets are overvalued, but if or when there is a correction, we will have a rational environment and the capability of moving on economically and getting the American economy up and running again.


Yes, reality is settling in on Wall Street and big business. And the reality is optimism, not about the markets, but about the long-term future of the economy. There is also finally optimism about the tax code, regulatory burdens and strength without government intervention. I believe the big business job creators—people responsible for expansion and growth in their businesses, regardless of their ideologies—must be smart enough to sit back, examine the economic policies of President-elect Trump and the people he is placing around him, and know that these policies will truly move the fundamentals of the economy forward, put people back to work, increase wages, grow labor participation, bring back the middle class, and restore a certainty to health care, energy and personal tax rates.

Confidence in the economy will begin to be built again as Americans feel stronger and safer. If there’s one thing we can all agree on, it’s that average Americans want jobs they can depend on, wages they can live on, opportunities they can count on and leaders they feel good about following. And that will undoubtedly unleash a stronger American economy.

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