US growth storms ahead as hurricanes blow over

Boost for Trump after GDP beats expectations to hit 3%

President Trump’s ambition to expand the American economy at a rate not seen since the 1990s was boosted yesterday when third-quarter growth came in higher than expected.

Gross domestic product rose at an annual rate of 3 per cent between July and September, the commerce department said, suggesting that hurricanes Harvey and Irma had had little impact on the economy. Analysts had expected growth of 2.5 per cent.

The strong showing by the world’s largest economy makes a December rise in interest rates even more likely. It could also help the Republicans to push through ambitious tax plans, with the White House claiming that strong growth will pay for $1.5 trillion of planned cuts to corporate and personal taxes.

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Why the Left and Right Clash Over National Identity

In 2011, after 899 issues and 73 years of publication, Superman, the most famous American comic book character, announced that he was renouncing his American citizenship.

“I intend to speak before the United Nations tomorrow and inform them that I am renouncing my U.S. citizenship,” Superman announces. He then adds, in reference to his famous motto: “Truth, justice, and the American way—it’s not enough anymore.”

After a national uproar, the comic publisher announced that this theme would not be revisited in any future edition of the comic. But an important point was made. To the liberal publishers of Superman, the hero’s American identity just didn’t feel right.

Maybe that was what people wanted from 1938 to the late 20th century. But this national identity stuff has got to go. We should all be world citizens.

This example illustrates a primary difference between left and right: their respective views of nationalism and national identity.

The rejection of national identities began with the founder of leftism, Karl Marx. He ends his major work, “Das Kapital,” with the famous left-wing motto, “Proletariat of the world, unite; you have nothing to lose but your chains.”

Marx regarded national identities as backward and useless. In his view, the only identities that mattered were class identities—the working class and the ruling class. If a worker thought of himself first as a German or Englishman, rather than as a worker, communism would never be achieved.

The rejection of nationalism in Europe became mainstream after World War I. Many Europeans, especially among the intellectuals, concluded that the unprecedented loss of life caused by the Great War was a result, first and foremost, of nationalism.

They concluded that Europeans slaughtered each other for nothing more than a flag and a national identity. Therefore, the argument went, by abolishing nationalism, war could be abolished.

That is the belief that led to the creation of the European Union: The more Europeans identified with Europe rather than with a particular country, the less likely were the chances of war between European countries.

In the United States, however, a national American identity has always been a major part of what it means to be an American.

The three pillars of Americanism, constituting what I have called the “American Trinity,” are found on every American coin and banknote: “Liberty,” “In God We Trust,” and “e pluribus unum.” The latter is Latin for “out of many, one.”

Because America has always been a nation of immigrants, it has no ethnic identity. Therefore, unlike almost all other nations, America could not depend on an ethnic identity to keep its people together.

In fact, if all Americans retained their ethnic identities, America would simply splinter. So a nonethnic American national identity had to be forged and preserved.

To this day, foreigners in the United States are struck by how patriotic Americans are in comparison to whatever country they come from.

They marvel, for example, at the fact that before almost every sporting event—from professional down to high school—the American national anthem is played and/or sung.

Conservatives wish to conserve all these manifestations of American patriotism and nationalism because they believe a sense of national unity is essential to the political and social health of the country.

On the other hand, the American left, like the left in Europe, is opposed to nationalism, and it generally finds patriotic expressions corny at best and dangerous at worst.

This is easily seen. Just visit conservative and liberal areas on July Fourth, America’s Independence Day. You will see American flags displayed throughout conservative areas and virtually none displayed in liberal areas such as Manhattan, or Santa Monica or Berkeley, California.

Left-wing opposition to American nationalism is exemplified by the left’s embrace of “multiculturalism”—the cultivation of all ethnic and racial identities except American. It has even reached the point wherein some American colleges no longer display the American flag.

In lieu of an American national identity, the left prefers an international identity. Thus, ideally, United Nations authority would supersede American authority, and the World Court would supersede American courts.

To conservatives, such ideas are anathema because, in addition to subverting American sovereignty, the United Nations has not done nearly the amount of good in the world that the United States has.

That’s why the liberals at DC Comics had Superman renounce his American citizenship (at the United Nations, no less). In their view, Superman is now even more super. In conservatives’ view, the renunciation is kryptonite.

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Obama's DOJ Discriminated Against Conservative Groups

Obama directed billions of financial settlement funds to leftist organizations while blocking conservatives.

Following the 2008 financial crisis, several of the nation’s largest financial institutions made legal settlements with the Obama administration. Public records show that these settlement payouts totaled over $3 billion. The House Judiciary Committee, along with the House Financial Services Committee, as part of an investigation has obtained internal documents from the Justice Department showing that not only did the Obama administration steer settlement payments toward leftist groups, Obama hacks also sought to prevent any conservative groups from receiving any of the settlement funds.

This is eerily reminiscent of the IRS’s targeting of Tea Party groups that came to light in 2013. In an email from July 2014, a senior Justice Department official explained how to draft a mandatory donation provision to prevent Citigroup Inc. from picking “a statewide intermediary like the Pacific Legal Foundation (PLF),” noting that the PLF “does conservative property-rights free legal services.” In the same email the Justice official then noted that the National Association of IOLTA Programs would be eligible for the funds because it provided “funds to legal aid organizations, to be used for foreclosure prevention assistance and community redevelopment assistance.”

Chairman of the House Judiciary Committee Bob Goodlatte (R-VA) called the documents a “smoking gun.” Goodlatte noted an email specifically identifying former Assistant Attorney General Tony West as the person responsible for directing the money to leftist organizations. “Can you explain to Tony the best way to allocate some money to an organization of our choosing?” asked a deputy of West’s in an email from 2013. Smoking gun indeed.

Rick Manning, president of Americans for Limited Government, stated, “The Justice Department emails released by Goodlatte show that only approved left-wing groups were eligible for the banks to make payouts to as part of their settlements, overtly excluding those deemed to be too conservative. What’s worse, is that the settlements often gave the banks double credit if they gave money to the left-wing groups rather than paying the government. Meaning, every $10 million to left-wing groups was counted the same as $20 million to the government.”

On Tuesday, the House voted on and passed the Stop Settlement Slush Funds Act of 2017.

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The Jobs and Wage Effects of a Corporate Rate Cut

Congressional tax writers will soon reveal their plans to reform the federal tax code. The most important thing that Congress and the Trump administration can do to boost economic growth, lift workers’ wages, create jobs, and make the U.S. economy more competitive globally, is reform the business-half of our tax system. And one of the most critical elements of that reform is cutting the corporate tax rate.

There has been a great deal of debate recently over how much a corporate rate cut can create jobs and boost wages and living standards. The Tax Foundation’s extensive economic research and tax modeling experience suggests that cutting the corporate tax rate to a globally competitive 20 percent would substantially lower the cost of capital which, in turn, would boost capital investment, leading to higher wages and more jobs.

Our research also shows that these economic benefits would be enhanced if lawmakers coupled a corporate rate cut with an allowance for full expensing of capital investments.

The GDP, Investment, and Jobs Effect of the Rate Cut

We used our Taxes and Growth (TAG) Macroeconomic Tax Model[1] to simulate the long-term economic effects of these policies separately and combined to give tax writers an idea of how the policies work together. The table below summarizes the long-term results of this exercise.

Here we can see that cutting the corporate tax rate to 20 percent would boost the long-term level of GDP by 3 percent and increase the capital stock by more than 8 percent. This has the effect of lifting wages by more than 2.5 percent and creating more than 587,000 full-time equivalent jobs.

The results are very similar for allowing corporations full expensing for their capital investments. In this example, long term is generally about ten years, once the policies have worked their way through the economy.[2]

Combining the two policies does not double the results because of their interactive effects. However, we can see that the two policies together would increase the level of GDP by 4.5 percent and the capital stock by nearly 13 percent. These economic forces act to lift wages by an average of 3.8 percent and create 861,000 full-time equivalent jobs.

Some might question how a corporate rate cut could create that many jobs while the economy is inching toward full employment. The TAG model is actually estimating the increase in the total amount of hours worked in the economy as a result of the policy change. Thus, some of those full-time equivalent hours could be filled by new workers, while others would be filled by part-time workers moving to full-time, or some idle people coming back into the workforce.

It should also be noted that in performing these estimates, we have not factored in any increase in profit-shifting into the United States, either by U.S. firms repatriating foreign earnings or foreign-based firms increasing their investments into the U.S. We believe that a lower corporate tax rate would encourage such activity, but estimating those effects were outside the scope of this exercise.

More HERE 

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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