U.S. Businesses Are Bullish Amid Worldwide Instability

Gee, could it be that HUGE TAX LOOPHOLE for pass-through income?

I am not an economist, but the last time major companies ignored ominous data was in the runup to 2007.2008.

This is what Robert Shiller and Alan Greenspan called "irrational exuberance." The already huge federal debt expanding due to tax cuts, congressional spending and entitlement growth is a deadly two-sided blade for the economy. On one side, public funding the debt -- selling bonds and paying interest -- is costly and sucks up private capital. On the other side, ballooning interest payments require more interest rate hikes to sell the debt. Inflation takes off as a result of these Republican Congressional actions. And then there's the direct inflationary effect of Trump's tariffs on prices, plus tariffs breaking global supply chains that cause further price increases. The Republican's financial irresponsibility can only end in a conflagration, and Trump's tariffs are the match that will ignite the fire of economic collapse.

Thank goodness we've escaped the sickly "new normal" of the Obama regime. As a small business person, it really does help when you can worry less what government will do next to crush your profits and more about serving your customers.

You have to be an optimist to run most small businesses. You put in long hours and are prepared to run from the back office to the front lines. What most don't have time for nor are qualified for is separating political lies from facts and economics policy. Trump's antics appeal. Unfortunately his actions will cause them harm. Unfortunately that will take time and all they'll remember are his antics.

My only real question is how far down the road Trump et al will manage to get before the wheels come off this particular gilded chariot.

Am I the only American who remembers Love Canal, the burning oil slick on the river in Pittsburgh, and the BP oil spill? The move to deregulate just about everything is like giving banks a license to steal and businesses the ability to do things the very cheapest way...... well, cheap now, costly to fix and clean up in the future. But hey, we won't be here to see the mess we created.

Warfare is very profitable.

"Business leaders who complained that they sometimes felt vilified as engineers of inequality — or greedy exploiters — now say they are pleased to be viewed as part of the solution, creating jobs and wealth." You have to marvel at a mentality that views creating low-wage jobs and new wealth, the lion's share of which goes into their own pocket, as a "solution". This sort of nonchalance regarding the precarious plight of working Americans leads me to recall that American business leaders were quite enamored with Hitler and Mussolini governance. It's no wonder that millennials are expressing interest in socialism. One can only hope that they nurture and sustain their idealism - that seems to be the only chance for turning the country around.

Yes, profit takers love instability and roller coasters. Jump into cash when the market is high, rape everyone's retirement IRAs and 401Ks when the market tanks and the bargains are plentiful. How is this any way to run a society, a country, a world?

And like the bull in the china shop, there will be a crash.

I continue to be worried about the increase in the national debt and associated interest costs. The OMB estimates that annual interest expenditures by the U.S. government could increase from $263 billion in 2017 to $619 billion by 2023. This assumption assumes an interest rate increase from 2.7% to 3.7%, which is debatable, but it is certainly not implausible as rates are already on the rise, and also given that anxiety about America's willingness to repay its debt could cause an increase in rates. This is a massive increase in both percentage and absolute dollar terms, and far outweighs the growth of the economy even under the most optimistic assumptions. If the economy grew at 4% each year (an extremely optimistic possibility), then the United States could afford to spend $333 billion on interest to keep interest expenditures at current levels, which is far less than the $619 billion OMB estimate. Annual interest expenditures of $619 billion would be larger than the 2017 budget for both Medicaid ($375 billion) and Medicare ($591 billion), and would be creeping up on our largest budget item, social security ($939 billion). The possibility of an extreme increase in interest expenditures is far from remote, and we should not treat it as such. If it were to occur, it would have significant ramifications across the U.S. economy. Remember, just because it has never happened before, does not mean it will never happen.

An Australian study found that about one in five American corporate executives are psychopaths – roughly the same rate as among prisoners. The study of 261 senior professionals in the United States found that 21 per cent had clinically significant levels of psychopathic traits. The rate of psychopathy in the general population is about one in a hundred. https://www.telegraph.co.uk/news/2016/09/13/1-in-5-ceos-are-psychopaths-... It's so reassuring to know that America's corporate sociopathic and psychopathic CEOs are humming the same tune as as our Psychopath-In-Chief. These are very sick people.

We know that our competitive, demand-driven, government-managed economy cycles up and down. We know that busts follow booms and then booms come again. What I look for in our government is a steady hand and a concern for those ordinary citizens who through no fault of their own get hurt by the down cycles and left out of the boom cycles. Some people thrive on instability, seeing opportunities to make money in the chaos. But most of us just want to make a decent living working day in and day out, with time to raise our children and care for our elderly parents, enjoy some leisure activities, participate in our churches and communities. This administration seems intent on creating chaos instead of promoting stability and building on sound foundations to lift up those who are not enjoying the fruits of their labor while others prosper beyond all need. I want a fairer economy, not a "booming" economy that will only bust in a few years.

Also despite climate change, social inequality, declining educational quality... and a hundred other trends that the profit incentive obscures. Executives are not oracles.

I am going to save this article, I think it is going to be a fun re-read in a few years. One memorable quote will be “'My entire career, we’ve all been screaming over the deficit,'” said Mr. Ferretti, recalling lectures he heard in business school. “'I’m pushing 40 years into my career, and the deficit fears just never happened. At some point it feels like worrying about the sky falling.'” Call me foolish but the uncontrolled growth of american debt is not a minor issue and the fact that all the screams against it have fallen mysteriously silent does not mean it has disappeared. In fact this entire article seems to me easily boiled down to " every long term economic indicator is flashing red, but times are good now so therefore they will be good forever." As some one who has spent a large part of there lives living in a post-great recession America, I'm not going out into the streets to celebrate a profoundly suspicious market.

Income inequality. Thought I would mention it, since it wasn't discussed in the article. Sure, the execs are thrilled, what with the massive tax cuts, and the fact that companies have been shipping jobs overseas for decades, to the enrichment of the investor class. But is the author of this article, and the business leaders being quoted, actually saying life is getting better for the poor and powerless in America, having to compete against workers in Vietnam or China or Mexico? We are eating the "seed corn" in lowering taxes and not paying for infrastructure like bridges and roads, and for the medical care of the poor. Fun now, but just how will we pay those debts as they come due, with little tax revenue? Or are you really saying trickle down works? Sure, Nike is doing fine, but I remember when America actually had a shoe industry. Hugh

Here we go again. The hymn from private sector CEOs that they are the sacred "job creators". A follow up question might be- what kind of jobs? Do they provide a 40 hour work week (people died for that one); security (dare I say the word "union"); good health care (at least until USA catches up to the rest of the first world); pension (instead of red voters screaming about people jobs with defined contributions/benefits, they should ask why they don't have one); paid parental leave; sick leave; modest vacation (to take a break for all the "winning") Or all these jobs 'independent contractors' or part time hourly workers, all left to their own devices when they break a limb, get a cancer diagnosis, or have a nervous breakdown from trying to make ends meet. All Trump has done is ratchet up greed and siphon more to the white boys at the tippety top. BTW- speaking of greed- WHERE ARE THOSE TAX RETURNS ?

Wages remain flat. The unemployment rate has gone from 4.5 to 4 in two years. Wall Street, corporate profits and GDP continue the trends of the Obama years with no spikes in the trend lines. As far as I can see the only two things that have changed since Obama took office is the tax breaks for corporations and the rhetoric on the right. We've gone from "carnage" to "morning in America" with nothing changing but the ephemeral "mood" of the country. I have to ask how much of that mood change is just the right's media components no longer scaring the populous about who's in charge. I was in a waiting room the other day and heard FOX news start an economic report with the words "Trump has put more money in your retirement 401k today folks" and I thought, was that phrase ever uttered while Obama was tripling the stock market? Oh and by the way, deficits don't matter only when there is a Republican in the White House, If it's a Democrat they are "stealing the future from our children."

"Rome is burning"

Even as the Republican Party continues to give advantages to global corporations above small businesses, over and over, small business people just love it. Even as tax cuts for corporations and the mega rich has stagnated the income for their customers, the consumers that actually drive the economy Back in the 1960s , when the top tax rate was 70% and the corporate rate was 50%, average GDP growth was over 4%. Now it averages 2%. And since the tax cuts passed last year apply only to corporations (and some real estate pass throughs, like the 500 tax sheltered owned by Trump), most small businesses are not getting that tax cut, because they are not corporations. Just like workers, their temporary tax cut is actually a long term tax increase. Corporations investing in other countries now have the lowest tax rate, 10%. How does that help most small businesses, who do not have overseas operations? Most small business people I know are against "crony capitalism," but love the ultimate crony capitalist, and cheer as he uses their tax dollars to enrich himself in the Oval Office. He is a global capitalist who regularly stiffed small businesses he contracted with. As long as small business supports unlimited corporate lobbying without transparency or limitation, Republicans and centrist Democrats will continue to give all of the advantages to your largest competitors, nastiest suppliers, and stingiest lenders.

No war but the class war, coming soon to a city center near you

It’s the economy stupid. Of course business leaders are optimistic when corporate taxes have been halved and regulations are rolling back. Those are two of the most important factors to business. In fact I might incorporate my own business this year to take advantage of the great new corporate tax rates. The trade war is incidental to business unless you are directly affected by it. And as one President famously said: “The business of America is business.”

Politics may be irrelevant to your business, but your workers may care when they can’t get paid time off, child care, or health care

Guess what happens after a sugar high? The downer comes next. We need the world, to succeed. Much of the economic value is now in brainpower, which is global. Trump is a real estate guy whose instincts are a bad fit for the times, and we will all suffer as a result.

The crash will be spectacular. The look on the faces of the rich when they realize that gated communities are not easily defended. Torches: Check Pitchfork: Check Roll out.

Sounds like 1929 all over again!

Tax cuts and a business friendly White House are the catalysts for American business expansion. No matter how loudly Democrats, liberals and progressives wail and gnash their teeth, facts don't lie. Record low unemployment. The highest labor participation rate for minorities in American history. Steady inflation. Economic growth at 4% and rising. Face it, the left wants the economy to tank so that they can reimpose their big government, big tax, and big regulatory policies. That economic model is a proven recipe for failure.

CEOs are happy. Business profits are up. The investor class - those who make money on the money they have, who add nothing to the economy but speculation, are doing fine, but the work-a-day man is losing ground to inflation. Paltry wage increases eaten up by increases in the costs of bread, utilities and health insurance. The euphoria of the rich is palpable. The desperation of the middle class is masked by the chaos in the White House.

“My entire career, we’ve all been screaming over the deficit,” said Mr. Ferretti, recalling lectures he heard in business school. “I’m pushing 40 years into my career, and the deficit fears just never happened. At some point it feels like worrying about the sky falling.” So Mr Ferretti gets over his concerns about the deficit when it is increased by a GOP president and Congress to cut taxes on his business and him individually - funny how that works taxes

The optimism is based on selling out Americans. All assets are outsourced, often to enemies of the United States (China). No jobs are created in the US and all assets real and intangible are handed over to America's enemies as the cost of doing business in that country(China). Americans buy the foreign goods (while they can still afford them).

Forty years and they still have no idea how the deficit works. The system can break, and the Republicans are close to breaking it. You can't add to a deficit in a boom economy, you can't drive away your creditors (Chinese) and you can't wage war forever. Why does humanity have to learn everything the hard way?

Let the good times roll. When they stop rolling, they'll start with the layoffs.

They're partying like it is 2007!

Ahh well then we live in VERY different universes. I walk around depressed much of time despairing of the future, but then I'm not thinking about next quarter or next year, but 20, 50, 100 out. And from there it looks pretty terrible. Business Pollyanna's might think about that next time they issue their 10Ks

I just worry that as the abyss between the rich, the very well to do and the poor widens and the middle class shrinks, will cause the US to became a "Banana Republic". History seems to repeat istself over and over again. Ancient cultures and or countries frequently failed when the abyss between the haves and have nots became too wide and too deep for it leaves the country or nation vulnerable to riots, unrest, increased crime and possibly war. It seems the US is not immune to this kind of development.

But where are the salary increases? Two and three percent don't cut it when CEOs, many of whom are incompetent, are taking home millions in pay.