US Economic Outlook: 2017 and Beyond Matthew C. Roberts, PhD | www.kernmantlegroup.com 13 Dec 2017
Stephen Colbert’s Tips on Being an Expert (Wired Magazine, August 2006) • Pick a field that can’t be verified • Be sure to use lots of abbreviations and acronyms • Don’t be afraid to make things up • Don’t limit yourself to current knowledge • Get an honorary PhD • Make a habit of name-dropping 2
US Wealth Continues to Rise: Disposable Income
Recovering Growth Means…
Ripped from the headlines…
Because everyone likes to talk $BTC • Blockchain will become more common in clearing many sorts of transactions. • The biggest challenge is how to compensate hosts for maintaining ledgers in a sustainable way. • The current run-up is almost certainly a bubble. • In the long-run, BTC (ethereum, etc) will play a role like gold—store of value, difficult to trace • But much, much better • There are many problems with BTC’s implementation: • Power usage • Loss • Anonymity
Some Policy Thoughts… Matthew C. Roberts, PhD | www.kernmantlegroup.com 13 Dec 2017
What can we learn from History? • Single-party government is not the same as unified government. • 111 th Congress: (2009-2011) • DNC had House majority and 60 in Senate • POTUS had to negotiate for ACA very hard and make significant concessions to win Lieberman & Nelson’s Senate votes. • 35 Ds in House voted against ACA. • 103 rd (1993-1995) • DNC had House majority, 57 in Senate • HillaryCare didn’t make it out of committee. • No significant partisan D ‘win’: • FMLA • RFRA • NAFTA
Single-Party Congresses, cont’d: • 107 th , 108 th , 109 th (2001-2007) • GOP had House majorities, 50-55 Senators • 107 th : • Pre 9/11 tax cuts • Sarbanes-Oxley • Patriot Act • 108 th : • Medicare Schedule D benefit • 109 th : • Bankruptcy Reform • CAFTA • Energy Policy Act of 2005
The Problem with Single-Party Rule: • Compromises are still required, and both parties have many factions. • This means that cross-cutting legislation, like Farm Bill, might be easier to pass than partisan laws. • Farm Bill has some natural D constituencies, and some staunch GOP opponents. • Same can’t be said for tax reform, regulatory relief, ACA repeal, etc.
Six Points: • Farm Bill Won’t Change Much • Tax Reform Modest • If it even passes… • ACA • Trade is the big Unknown • Regulatory Relief • Gridlock & the Economy
What will happen with trade? • This is biggest area for concern. • Is the administration: • Anti-trade? • Attempting a master plan of obfuscation to drive a deal? • This matters: • 25% of corn exports (548m bu) to Mexico • 62% of soybean exports (1.3bn bu) to China • Japan, S. Korea & Mexico were largest US beef buyers • Japan, Mexico & Canada
What are the President’s Trade Powers? “The Congress shall have Power […] [t]o regulate Commerce with foreign Nations…” (Article I, Section 8, Clause 3) • There is still disagreement over what the President alone can actually do… • Notify intention to withdraw (NAFTA & KORUS) • Instruct CBP to interfere? • But will Congress actually withdraw?
Regulatory Relief The one place that Ag clearly has, and should continue, to benefit: • WOTUS • Labor • Other EPA
This might not be all bad.
And maybe that’s a good thing. When has economy grown fastest? • 1995-2000: Gridlock in DC, enmeshed in Lewinsky Scandal. • 2003-2007: From 2004 on, Bush 43 got nothing done—public & congressional opposition to the war, etc. • 2013-2016: Completely obstructionist Congress. • Stability matters.
Some Ag Thoughts… Matthew C. Roberts, PhD | www.kernmantlegroup.com 13 Dec 2017
Questions? Matthew C. Roberts, PhD | www.kernmantlegroup.com 13 Dec 2017
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