The country lost a war hero this week. Senator John McCain finally succumbed to the brain cancer he was fighting for some time. He suffered unimaginable torment at the hands of the communists during the Vietnam War. His bravery and heroism during that time is representative of the legendary greatness exhibited by the American war fighter, and we are all grateful for his service and what he went through on behalf of all of us.
His politics were quite combative with his own party, and to a significant degree with President Trump. That conflict headlined some of the news media this week, along with the convictions of former Presidential campaign Chair Paul Manafort and Trump attorney Michael Cohen.
But if you search deep into the Google pages, or watch a number of cable news shows, then you can find some very positive and quite intriguing news stories that are good for the country and for the economy!
I. Top 5 news headlines for this week:
5.“Deregulation leads to expansion of energy access and rare-earth minerals”: It should be well-known now that the energy industry, coal mining, fracking, and much more has been deregulated. These industries are required through numerous laws and regulation to be protective of the environment, but the regulatory regime had led to restrictions in market access and profitability. The Administration’s deregulation initiative has spurred economic growth, jobs and innovation. In addition, restrictions on the mining of rare-earth materials have been lifted. Everything from clean energy batteries to advanced weaponry that the Pentagon relies upon were being imported from sources abroad because mining for them in the US had been restricted. This upside-down, dangerous threat to national security has finally been lifted. This is a win for capitalism, and a win for national security.
4.“Mexico and the United States agree in principal on a new trade deal to replace NAFTA”: Much of our political unrest can be attributed to many factors. Most agree social media has exacerbated or even served as the root cause. But the primary reason has been economic: free trade and globalization has driven corporations to search for cheap labor, and that has negatively impacted blue collar employment in the US over the last 25 years. The free market was only working in one direction: if you pursue cheap labor across state lines, then you cannot have protected markets or the theft of intellectual property, or you get trade that is neither free nor fair. The result is a populist revolt. President Trump rode that wave and his primary target – going back to the early 90s – was NAFTA. The trade deal between Mexico and the US this week probably means the end of NAFTA as we knew it, and that drove the market surge this week.
3.“Canada rushes to get a deal before its too late”: Sound and fury, signifying…nothing. Europe, Mexico, now Canada…everyone wanted to stick their chest out and say how they weren’t going to let the Americans dictate terms – and then we dictated the terms. The Canadian Foreign Minister literally got on a plane to come to Washington after the President and Mexico announced their new trade agreement. Simply put – apparently lost on the establishment and the elites of the last 26 years – no one can afford to NOT have a trade relationship with the country that has the largest economy, the freest economy, the most innovative economy, the fairest rule of law (although weakened), the largest multi-national banks, and the deepest capital markets. Simply put – apparently lost on the establishment and the elites of the last 26 years – pursuing a strategy of economic confrontation with the United States has always been suicidal and self-defeating. Canadian Prime Minister Justin Trudeau will be on TV claiming they prefer no deal to a bad deal…and shortly will sign a good deal for everyone that puts the American worker first.
2.“Nasdaq 8000”: For the first time in the tech-index’s history, it broke 8000 on the big board. While previous tech high’s scare investors – such as the dot.com bubble – the technology market has matured since that time, with larger and a more diverse set of companies which drive valuations.
1.“Growth revised upward”: Not 4.1%, but actually 4.2% GDP growth in quarter number two. This growth is predicated on actual deregulation, tax reform, and strong dollar policies. It is based upon wage growth (2.8% year-over-year, first time since 2007) and actual economic activity as opposed to printing money or zero interest rates. What goes up must come down, but the growth we are seeing is positive business expansion, it represents a healthy economy.
Not everything is rosy or hunky dory – the Mueller investigation never ends….China shows no signs of relenting in this trade war…Russian warships are back in the Mediterranean for the first time since 1990…the Congress remains incapable of addressing our debt problems nor even passing a regular budget…hopes for a deal in North Korea are waning…and, we are due for a market correction.
But America’s economic vitality and strength, and our role as the “indispensable nation,” is allowing the capitalist engine to power on as we near the end of 2018.