A classic principle of sales strategy is to sell the sizzle, not the steak.
Trump and the Republicans have mastered this principle, applying it to health care and the economy. The repeal of Obamacare in favor of TrumpCare, or RyanNocare - or maybe it's RyanCare and TrumpNocare - is all sizzle and no steak. The sizzle - freedom of choice, more options, lower cost, broader coverage, no government bureaucrats between you and your doctor. The reality - the system tilted toward the affluent young and healthy, less coverage at higher costs, especially for lower income folks, with the "freedom" not to purchase it if too costly. This, juiced up with tax cuts for our wealthiest citizens.
The February jobs report was good, with an increase of 235,000 jobs. Financial markets hit record highs on March 1. Trump and the GOP hail the optimism of corporate CEOs. Again, it's all sizzle - promised tax cuts and deregulation. Even if taxes are cut, and the economy and the environment further deregulated, what will be the effect on the economy and general well-being of the nation?
Facts matter. But they can be boring. And it matters greatly which facts are selected. Our celebrity broadcast media stars - print journalists are marginally better - treat us to their characteristic "analyses" with the depth of the Platte River in dry season.
Wall Street and corporate CEOs love, and react like a pack of Pavlov's dogs, to the words, "tax cuts and deregulation."
Circa 1900, Russian psychologist Ivan Pavlov conducted his famous experiment in which he trained his dog to salivate at the sound of a bell. Since the dog was trained to associate food with the bell, he would salivate whether or not food would arrive with the sound of the bell.
Forgive the mixed metaphor, but with the sizzle, or the sound of the bell, the words "tax cuts and deregulation," Wall Street and corporate CEOs respond like Pavlov's dog, salivating over the prospect of the steak.
But will the steak anticipated by the sizzle, or food anticipated by the bell, arrive? And even if does, would those tax cuts and reduced regulations have the intended effect? Will they cause financial markets to continue their historic rise? Will they cause further increased employment, higher wages and increased economic output?
President Barack Obama inherited the worst economy since the Great Depression. Shortly after his inauguration, the S&P hit a low of 841. On Election Day 2016, the S&P was at 2,123, for a gain of 1,282 points, 152 percent. From Election Day to this writing, the S&P is hovering around 2,370 for a gain of about 12 percent. That's impressive enough for a short period. But if this is not due to tailwinds from Obama, and all attributable to Trump, it's still the sizzle of the anticipated steak - in the future if forthcoming at all.
Even if that 12 percent increase is due entirely to Wall Street salivating like Pavlov's dog, it was the Obama administration that did the heavy lifting to get the S&P from 841 to 2,123. A slothful hiker takes the chairlift up a hill to an elevation of 2,100 feet, gets off and hikes the remaining several feet to the top and proclaims, "Hey, look what I did, I conquered the hill, all by myself, no less."
And jobs - Trump famously trashed the monthly reports of the Bureau of Labor (BOL) Statistics as "one of the greatest hoaxes of American politics." According to Trump, these reports are, or were, pure fiction, designed to make politicians look good.
With the February BOL report showing 235,000 new jobs, Trump has had a change of heart - obviously these reports are now credible. Never mind that the professional statisticians of BOL employ consistent methodology in compiling these reports.
While the February 2017 number of 235,000 is encouraging, so too were the February 2015 report of 295,000 and the February 2016 report of 242,000, giving lie to Trump's fiction that he has inherited an economy in decline. While Obama inherited the worst economy since the Great Depression, Trump inherited an economy that has experienced 94 straight months of growth. Clearly, Trump is benefiting from the tailwinds of the Obama Administration.
Yes, there is still a lot of work to be done, particularly with respect to policies that address broader distribution of benefits of economic growth. The hollowing out of America's Middle Class is a very serious issue. There is plenty of blame to go around for that, including the mainstream media that focuses on the rich and the powerful.
It should not have taken the rise of Bernie Sanders and Donald Trump to bring income distribution and the plight of Americans left behind to the attention of the out-of-touch mainstream media.
With financial markets flirting with all-time highs and employment falling to 4.7 percent, will the GOP agenda centered on tax cuts and deregulation further boost financial markets and reduce unemployment?
This economist has long been critical of supply-side economics that emphasize tax cuts mainly for the wealthy. The demand-side is the critical factor in inducing production and employment. When the vast majority of Americans have the dough with which to purchase product and services, producers will respond, hire more workers, and be able to pay them more.
A sound plan for spending on infrastructure makes sense, and it's something that Democrats have been pushing. They should be able to work with Trump on infrastructure as long as it is not centered on for-profit schemes, privatizing items such as roads and bridges, or for wasteful spending on border walls.
And the financial markets? Those who abandoned financial markets during the Obama years have missed some very healthy gains. Will this long term bull market continue? Your call, entirely.
So far, the Trump/Republican agenda has been all sizzle. We're still waiting for the steak.
- John Waelti of Monroe can be reached at jjwaelti1@tds.net. His column appears Fridays in The Monroe Times.
Trump and the Republicans have mastered this principle, applying it to health care and the economy. The repeal of Obamacare in favor of TrumpCare, or RyanNocare - or maybe it's RyanCare and TrumpNocare - is all sizzle and no steak. The sizzle - freedom of choice, more options, lower cost, broader coverage, no government bureaucrats between you and your doctor. The reality - the system tilted toward the affluent young and healthy, less coverage at higher costs, especially for lower income folks, with the "freedom" not to purchase it if too costly. This, juiced up with tax cuts for our wealthiest citizens.
The February jobs report was good, with an increase of 235,000 jobs. Financial markets hit record highs on March 1. Trump and the GOP hail the optimism of corporate CEOs. Again, it's all sizzle - promised tax cuts and deregulation. Even if taxes are cut, and the economy and the environment further deregulated, what will be the effect on the economy and general well-being of the nation?
Facts matter. But they can be boring. And it matters greatly which facts are selected. Our celebrity broadcast media stars - print journalists are marginally better - treat us to their characteristic "analyses" with the depth of the Platte River in dry season.
Wall Street and corporate CEOs love, and react like a pack of Pavlov's dogs, to the words, "tax cuts and deregulation."
Circa 1900, Russian psychologist Ivan Pavlov conducted his famous experiment in which he trained his dog to salivate at the sound of a bell. Since the dog was trained to associate food with the bell, he would salivate whether or not food would arrive with the sound of the bell.
Forgive the mixed metaphor, but with the sizzle, or the sound of the bell, the words "tax cuts and deregulation," Wall Street and corporate CEOs respond like Pavlov's dog, salivating over the prospect of the steak.
But will the steak anticipated by the sizzle, or food anticipated by the bell, arrive? And even if does, would those tax cuts and reduced regulations have the intended effect? Will they cause financial markets to continue their historic rise? Will they cause further increased employment, higher wages and increased economic output?
President Barack Obama inherited the worst economy since the Great Depression. Shortly after his inauguration, the S&P hit a low of 841. On Election Day 2016, the S&P was at 2,123, for a gain of 1,282 points, 152 percent. From Election Day to this writing, the S&P is hovering around 2,370 for a gain of about 12 percent. That's impressive enough for a short period. But if this is not due to tailwinds from Obama, and all attributable to Trump, it's still the sizzle of the anticipated steak - in the future if forthcoming at all.
Even if that 12 percent increase is due entirely to Wall Street salivating like Pavlov's dog, it was the Obama administration that did the heavy lifting to get the S&P from 841 to 2,123. A slothful hiker takes the chairlift up a hill to an elevation of 2,100 feet, gets off and hikes the remaining several feet to the top and proclaims, "Hey, look what I did, I conquered the hill, all by myself, no less."
And jobs - Trump famously trashed the monthly reports of the Bureau of Labor (BOL) Statistics as "one of the greatest hoaxes of American politics." According to Trump, these reports are, or were, pure fiction, designed to make politicians look good.
With the February BOL report showing 235,000 new jobs, Trump has had a change of heart - obviously these reports are now credible. Never mind that the professional statisticians of BOL employ consistent methodology in compiling these reports.
While the February 2017 number of 235,000 is encouraging, so too were the February 2015 report of 295,000 and the February 2016 report of 242,000, giving lie to Trump's fiction that he has inherited an economy in decline. While Obama inherited the worst economy since the Great Depression, Trump inherited an economy that has experienced 94 straight months of growth. Clearly, Trump is benefiting from the tailwinds of the Obama Administration.
Yes, there is still a lot of work to be done, particularly with respect to policies that address broader distribution of benefits of economic growth. The hollowing out of America's Middle Class is a very serious issue. There is plenty of blame to go around for that, including the mainstream media that focuses on the rich and the powerful.
It should not have taken the rise of Bernie Sanders and Donald Trump to bring income distribution and the plight of Americans left behind to the attention of the out-of-touch mainstream media.
With financial markets flirting with all-time highs and employment falling to 4.7 percent, will the GOP agenda centered on tax cuts and deregulation further boost financial markets and reduce unemployment?
This economist has long been critical of supply-side economics that emphasize tax cuts mainly for the wealthy. The demand-side is the critical factor in inducing production and employment. When the vast majority of Americans have the dough with which to purchase product and services, producers will respond, hire more workers, and be able to pay them more.
A sound plan for spending on infrastructure makes sense, and it's something that Democrats have been pushing. They should be able to work with Trump on infrastructure as long as it is not centered on for-profit schemes, privatizing items such as roads and bridges, or for wasteful spending on border walls.
And the financial markets? Those who abandoned financial markets during the Obama years have missed some very healthy gains. Will this long term bull market continue? Your call, entirely.
So far, the Trump/Republican agenda has been all sizzle. We're still waiting for the steak.
- John Waelti of Monroe can be reached at jjwaelti1@tds.net. His column appears Fridays in The Monroe Times.
