Trump Tax and Jobs Initiatives Will Spur Massive Economic Growth

Few would argue that two major things many Americans need, and need badly are jobs and a break from taxes. There is no doubt that the last eight years of the Obama administration certainly did nothing to help on either of these two things. But if we are to be honest, at least on the jobs side, this has been something that reaches quite a lot farther back in years. Job stagnation and more and more taxation have been things that have stripped away at the American economy for years, and much of it has to do with America pulling away from the manufacturing sector.

Something the Trump administration aims to make better.

The thing has always been, for me, that what America lacks is productivity—stagnated in large part by more and more good paying, family supporting wage jobs being lost to cheaper foreign labor, bad trade deals, and higher and higher taxation and regulations imposed upon corporations. We shifted to more of a service economy, and more and more Americans have fallen into the rut of lower paying service jobs, particularly in the sectors of retail and fast food.

With lower wages across the board, not only are less taxes collected from the workers. But more and more of these workers make so little that they burden the middle class and the rich since more and more entitlements get doled out to a larger swath of the population.

This has long been a recipe for disaster, and in many ways this slow and ugly cancer led us to suffer through a Great Recession, and due to bad policy by the Obama administration, and almost non-existent path to recovery.

It can be a tough spot to be in at times depending on who you talk to. When you say to someone, "I am not a protectionist, I am for free trade, but I want to see more things made in America," you get more than a few furled brows. It seems to be a way of speaking out of both sides of the mouth. But what I have always felt is that what we actually need in order to have free trade is fair trade. In other words, it is of no benefit to America to have major imbalances in the goods we make and the goods we get from abroad. What's more, even those cheaper foreign goods are becoming less and less affordable since the wages for the average American worker have really not made any progress over the last few decades. In fact, in many cases, wages have actually fallen.

And of course there are the taxes which slow down every aspect of the economy. From extra taxes added to fuel, to the umpteen million special "fees" imposed upon us on our utility bills and cable bills, and added onto other things—these are essentially hidden taxes. Call it a fee if you want, but any money that you pay that goes to the government is a tax no matter what other moniker you may attach to it.

I think we will be getting a break from this very, very soon. A Trump tax plan should be introduced by August of this year.

Already we have seen major improvements in at least the jobs side of the coin. Many more companies have either decided to stay here, or are coming here to provide jobs. The most recent is a German candy maker, Haribo, who is famous for its gummy bear candies. Apple has said it will make more iPhones here. Ford has announced more jobs here. GM will keep more workers here. And both Ford and GM have plans to expand production here meaning more jobs. And the list goes on from Carrier to a long and growing list of both American and foreign companies either looking to expand operations within our borders, or bring new operations here.

If there is one thing that can put this economy into super high gear it is to increase median wages and lower the taxes. Americans are super consumers, and the more money they have in their pockets to consume goods and services, the more money will be flowing into the real economy, the more taxes that will be collected, and everybody wins. I think we all are well aware of the fact that when there is more money to spend, and more confidence in where the money is coming from to spend, we will inevitably spend more.

It won't happen overnight of course. There is still a lot of work to be done. But one thing I am uber confident in is the ability of the Trump administration to do the right things to work out and undue decades of economic policy that have all but siphoned off trillions, if not hundreds of trillions of dollars of wealth America could have enjoyed had we stuck to the idea that wealth in America stems largely from making things in America. We were a country built on productivity, innovation, invention, and then somewhere along the line it was decided that we could survive without all of that. The proof is in the pudding that we cannot. The proof is in the here and now that we thought wrong.

We've seen massive gains in the stock market since Trump took office. Now we will get to see the same thing happen to the entire economy. We're in for a ride the likes of which we have not seen since the Reagan years, and while the economy did do well under Clinton, we all know where that growth came from—the Internet boom. And unfortunately much of that money was simply smoke and mirrors, and when that bubble burst, we still didn't get it that we need those bricks and mortar manufacturing jobs to create a real and strong foundation for the American economy.

We're getting it now. Finally. And luckily our current president gets it too.

The Trumpanomic Effect: Part One

Now that the election is over and we know who the president is going to be, it is time now to analyze what I think will be one of the largest impacted areas of a Trump administration.

The economy.

As an investor I am now spending considerable time evaluating some of the promises that President-Elect Donald Trump made during his campaign as they apply to economic considerations. And what I see is enough to make me literally salivate. Of course, he is not yet in the White House, and the House and the Senate need to be onboard with any plans the Trump administration may lay before them. But there is a positive here if you have not noticed.

The republican party, and even some of the most staunch never Trumpers within the republican party are all now clearly and openly rallying in favor of the president-elect.

Seeing Ted Cruz moving in and out of Trump tower negotiating with both Trump and Pence and other members of the transition team, and hearing Cruz now speak to the American people about his now positive views on what Trump will offer is one thing. But Mitt Romney has also apparently moved on over to the Trump train as well, even after virtually calling for the election of Hillary Clinton early on in the campaign.

It's one thing that the GOP controls both the House and the Senate. It's entirely another that they are in support of the president-elect, and by all accounts, appear to also be entirely onboard with much of his agenda as well. Even Ted Cruz specified that Trump's overwhelming defeat of Clinton and the GOP win over democrats, despite what all thought would be considerable odds, defined a clear mandate by the American people that they want the campaign promises to be fulfilled. And if the GOP wants to maintain their power, they are going to have to deliver on that mandate or face their ouster come the next round of mid-term elections.

So, when it comes to the economy, it looks like we may see the ratification of a good number of some of the ideas that Trump offered to right the listing economic ship. And from an investors perspective, this means we may see some very interesting positive developments in the stock market going forward.

And by the way, it's not just the stock market that will benefit. If Trump can get done what he wants to do—especially in the first 100 days—of course American workers will see massive benefits as well. It's really not rocket science to understand that the underlying factor of more Americans working, even making higher wages, coupled with other factors are the benchmark of a strong economy.

Think of the impact of the middle class and my point is proved. When the middle class is vibrant and strong the economy flourishes. When the middle class is in jeopardy, the economy slips and falls.

One thing that seems clear to me is that if Trump can get done even half of what he advocated for during the campaign, we are going to see massive upswings in jobs, and even massive upswings in median income across the United States. I honestly believe that a whirlwind of economic growth is right around the corner, and if the economic policy put forth by the Trump administration looks anything like I think it will, we are headed for long term growth that may even make the undeniable success of Reaganomics pale by comparison.

In the following series I will outlay some of the factors that I think will spur on this economic growth, and the reasons I think they can be powerful enough to potentially uplift the American economy in very short time. I don't think we're looking at four or more years to see results here. I think we will begin to see results, actually, after just two years into the Trump administration. And in some ways if I am to be totally honest, even two years may be a conservative estimate.

Why?

Because if the American people can see the light at the end of the tunnel, and if there is a positive attitude toward what our economic future holds, this will reflect very early on (and in some cases is already being evidenced a mere 10 days after the election results) in how Americans react to it. Things to watch with abided attention are the U-6 unemployment figures, consumer confidence figures, retail sales, and the housing market—particularly housing starts as opposed to depletion of existing inventories.

My shortlist advice? You better have some cash lying around to toss into the markets, and I will be telling you where I will be putting a lot of mine, because waiting too long may well put you miles behind the curve once this thing really gets going.

I told you all along that Trump would win, and win big, and laid out all of the reasons I saw that coming. Now am I going to tell you that the economy is the next big winner, and will lay out all of the reasons why I see that coming as well.

Predictions For 2015

2014 turned out to be a bit of a tumultuous year to say the least. There was quite a lot that happened, the most recent big deal being the race riots in Ferguson and New York. We finally saw some major relief in gas prices, giving Americans a little bit of extra spending cash—especially during the holidays. Jobs growth also picked up a bit towards the end with the unemployment rate finally dropping below 6% (the U-6 rate notwithstanding of course).

So what will see in 2015? Here are a few of my predictions for what to expect. These are of course opinions, but I have done a bit of homework to come up with these. Will they all come true? Of course not. These are predictions, and if I could actually predict anything with any accuracy assured I would be predicting the winning combination of lottery numbers.

But of course.

So onward and upward, and without further ado, here is what I think will be happening in the coming year. Some good, some bad, some downright ugly.

• Unemployment numbers will remain in the 5%-6% range for the better part of the year, but 2015 will see record jobs growth numbers. I actually put the unemployment number at the close of 2015 around 5.2%.
• Gas prices will remain lower up to around mid-summer when there will be a bit of a surge in demand. I see 2015 oil prices remaining stressed, and will likely hover around $75-$80 per barrel.
• With republicans back in power I believe that the Keystone Pipeline deal may be back on the table, but even if anything makes it to President Obama's desk, he will veto it. The Keystone Pipeline, however, will become a big part of the next presidential campaign, and actually believe that both the republican and democratic candidates will be in favor of approving it.
• U.S. auto sales will post record numbers. Ford Motor Company and Toyota will lead the pack.
• GDP growth will rise by 3.2%.
• Russia's economy will fall into a depression, and Japan's economy will remain in a recession. However, Japan will pull into a recovery towards the end of 2015. China will grow, as will most of the rest of the developed world economically.
• Iran will develop a nuclear weapon. However, I think there will be enough force to prevent them from actually using it.
• The GOP will see a young newcomer emerge who will have a strong chance at the nomination who restores conservative values of the republican party.
• Housing prices and inventories of existing homes will remain stagnant. But new starts will see a rise with more builders looking to build "affordable" housing.
• The Fed will end quantitative easing.
• The DOW will continue to see record growth and will close 2015 around 21,000 points. I predict a correction in 2016 however, but not a significant one.
• Discount retailers will see declines in sales while higher end chains will see increases. I also see entertainment and restaurant stocks increasing significantly in value in 2015. State casinos will see their biggest drop in revenue in ten years by the end of 2015 as consumers shift their spending. Las Vegas, however will have a record year as will Atlantic City.
• Cuba's economy will see record growth, and Cuba will begin to develop a tourism industry in 2015 with the help of American investors. Although full tourism in Cuba won't be realized until 2016-2017. Incidentally I think Cuba may also experience a regime change.
• President Obama will by executive order increase the Federal Minimum Wage to $10.
• Actor and comedian Bill Cosby will be indicted on rape charges and will shock the nation by going to jail. It will be the trial of the century, and perhaps the biggest news story of 2015.
• Bill O'Reilly will remain the #1 cable TV news show on television, but will announce his retirement towards the end of 2015.

So there you have it. These are my predictions. I think it will be interesting to take another look at all of these at the end of 2015 and see which ones came true, if any of them. Some of them I obviously do not want to happen, but sometimes it is not what you want to happen, but what is likely to happen that matters. Onward and upward, and I shall see you all on the other side.

Happy New Year to all of my faithful readers.