by Mitch Kokai
Senior Political Analyst, John Locke Foundation
China’s actual economy has slowed from its 8% to 10% growth of recent years to 6%. Its industrial sector has slowed even more. But software and services and the country’s internal entrepreneurial and consumer economies are doing nicely. The China bears will be proven wrong again.
– American stocks won’t collapse. Could the U.S. stock market drop 20% from its May 2015 peaks? Sure, but that’s the definition of a bear market. It’s nothing like the 57% collapse of 2007-09, even if traffic-hungry financial bloggers are screaming collapse. Get a grip. Since the stock market bottomed in March 2009, we’ve already gone through one bear market (20% drop from previous highs), in 2011. Another shouldn’t surprise.
– Jobs will continue to grow–wages, too. Expect to see 2.5 million more jobs a year from now on. Headlines cry that wages were flat in 2015, but they in fact rose 2.5%, according to Brian Wesbury and Bob Stein of First Trust Advisors. (If you suspect that Wesbury and Stein are shilling for the Obama Administration, you couldn’t be further from the truth.)
– Presidential candidates will debate taxes and regulations. The clown shows of 2015 will soon get serious. As the Republican field winnows to Trump and two or three non-Trumps, actual economic policy will make its way to the stage. Are you for or against a flat or a simplified tax code? How many brackets and at what rates? Are you for or against repealing ObamaCare, Sarbanes-Oxley and Dodd-Frank? Are you for reining in the IRS and the EPA and restoring law? Hillary Clinton or Bernie Sanders will eventually have to come out of her/his utopian nirvana to debate a toughened-up GOP candidate.
The effects of regulatory overreach and tax complexity on small businesses will get debated in the general election–and that’s a good thing. In fact, small-business owners are among those angry “radical middle” voters who may decide the election.