In the “bad news is good news” economy that’s at the root of Obamanomics, the market has been rattled the last few days by signs that the economy is finally, again…did I say finally, again?... growing.
Well at least that’s the story THIS week.
I stopped counting the number of times that economy finally started growing.
Still, the market views robust numbers in the manufacturing sector released this week as cautionary.
Caution for the market that is, while welcome news to you and me.
“The Institute for Supply Management reported on Monday that the U.S. manufacturing sector expanded in November for the sixth consecutive month,” reports the Wall Street Journal, “with the PMI index rising to 57.3 from October's reading of 56.4. The November reading was not only the highest in 2013, but also beat analysts' estimate of a decline to 55.2.”
A Republican Congress cut back on budget increases in the spring—also known as sequester-- and, suddenly, six months later the economy is gaining steam. A Republican Congress shutdown the government for 16 days in October and suddenly, one month later, manufacturing posts it’s highest number for 2013.
Makes you wonder what all the “sequester is the end of the world” and the “government shutdown is the end of the world” talk was all about.
I mean besides grandstanding by Democrats who have no idea whatsoever what to do with the largest, greatest, most impressive economic society ever created in the history of mankind.
Democrats should try doing nothing with it and see how that works out.
Back in the stock market, if economic growth keeps up, interest rates will continue to rise which is bad for bonds and bad for stocks and bad for government debt... and apparently bad for government executives.
And this isn’t the end of good news for the economy. Or is that bad news?
Jobs are starting to stabilize, after eleven months of Obamacare-created distortions, also thanks to Republicans.
In the summer, Obama delayed the big company mandate for Obamacare that was turning us into a nation of part-time employees. In no small part was Obama’s decision to delay the mandate due to criticism he got from the GOP.
And since the delay went into effect, employment has rebounded a bit.
“According to ADP National Employment Report findings,” says ADP CEO Carlos Rodriguez, “the U.S. private sector added 215,000 jobs during November making it the strongest month for job growth in 2013. It’s an encouraging sign as we head toward the new year.”
Thus you can see why the markets are reacting so badly.
Strength in the economy means that it is more likely that the Federal Reserve Bank will cut back it’s bond-buying program, meaning interest rates will likely rise, and the market will not get as much of its cash infusion monthly. That cash has had nowhere to go but to the stock market, and thus explains the rally.
But there’s even more bad news. Or is that good news?
Sequestration, a government shutdown and a budget deal along with all the other evil things that Republicans do to help the economy grow-- and thus hurt the stock market, but help Main Street-- are back in the news.
This from govexec.com: “Lawmakers in both parties could face a dangerous political dilemma after they return to Washington: Either endorse a second round of damaging sequester cuts or prepare for another government shutdown. The situation is that stark, and it's coming on fast.”
OK, maybe it’s stark for government executives, but for the rest of us, perhaps there is some wisdom in more sequestered budget cuts, or another government shutdown.
Do we really need to remind everyone which party is 100% for Obamacare and which party is 100% against Obamacare…again?
Yes, I think we do. "We" as in Senator Ted Cruz (R-GUTS).
The National Journal wrote last week that there is no doubt that this is the worst Congress ever (Proof This Is the Worst Congress Ever): “It's December, which means it's time to look back wistfully on all the great things Congress hasn't accomplished this year. We're all used to inaction, but 2013 is setting the bar at a new low, leading many to already proclaim it the least productive year ever. Congressional records tell us there have been 60 public laws enacted this year, far below the postwar low of 88 achieved in 1995.”
Obviously that’s the Republican’s fault, at least by implication. Think of all the great legislation Democrats could have passed in Congress if not stopped by the GOP.
Out here in the hinterland, however, we don’t measure the effectiveness in Washington, D.C. by the numbers of bills they pass.
And inaction by the government is the right think to not do today in the hyperactive world of activist government.
It gives the rest of us a chance against the machinations of Big Brother.
So, for that respite I say to the GOP: Thanks for nothing.
Really…Thank you soooo much.
If the economy IS growing, there’s no doubt in my mind that it’s the Republicans’ fault.