Sean Snaith is not a household name but he is one of the nation’s top economists and highly regarded in economic circles for the depth and accuracy of his projections.
So much so that he is on multiple national economic forecasting panels, including The Wall Street Journal’s Economic Forecasting Survey, the Associated Press’ Economy Survey, CNNMoney.com’s Survey of Leading Economists, USA Today’s Survey of Top Economists, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, Bloomberg and Reuters.
All this is stated upfront because what he says rightly carries weight in a lot of influential circles, and probably should outside those circles. And he is now supremely optimistic about the American economy going forward.
He made projections last year he said were based on the assumption of a Hillary Clinton victory and her policies being instituted — because that is what all of the political pundits told him. When Trump won, he says, he had to re-think things. He went back to the drawing board and began a new set of calculations which he is constantly updating. The differences are dramatically better for the American economy and the American worker.
In fact, to hear Snaith speak recently to a large Florida economic development group, its almost jarring how much of a MAGA Trumper he sounds like — well, on economic policies anyway. And the projections he announced were almost goose-bumpy good.
Snaith said the tax cuts and deregulatory efforts will generate a 3.5 percent national GDP this year — much higher than at any point since before the Great Recession — and will remain very strong at least through 2020. He said this is more where the American economy should be and will be (barring any major, unforeseen disruptions.)
That has positive implications for American workers. The jobless rate is hovering at about 4 percent right now, but he predicted that as policies really start generating economic activity, the unemployment rate will fall to 3.4 percent by late 2020 — and that is even as the labor participation rate increases. So even as more Americans re-enter the job market after giving up for the past six years or more, they will all be absorbed into new jobs, plus some.
This tight labor market means there will be competitive market pressures driving wages and salaries specifically at the lower ends to begin with. In fact, that is already beginning to happen.
“Markets are magical and will solve the labor problem” by increasing wages to attract workers, he said. “The lowest end jobs are seeing the fasted income growth rate right now.”
Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, said there are two driving policies at work here. The Tax Cut and Jobs Act and the ongoing regulatory relief.
The key elements of the tax reform package boosting the economy include: lower income tax rates; higher standard deductions; expansion of the child tax credit; reducing the highest corporate tax rate in the developed world from 35 percent to 21 percent; tax breaks for small businesses; and a one-time tax break to 15.5 percent to repatriate American companies’ offshore profits — which Apple already announced they will take advantage of to the tune of $252 billion.
The tax package will increase take-home pay for American workers — something that has not happened since President Bush was in office — and will generate more consumer spending, stimulating the economy and GDP growth. American companies will be more apt to keep their profits at home and reinvest a portion of them — several have already announced their intentions with plant expansions and sharp increases in employee pay.
But Snaith sees deregulation as every bit as important because of the tremendous drag that excess regulation places on companies and the economy. “Deregulation is the special sauce that will juice the economy,” Snaith said.
The Code of Federal Regulations exploded from 140,000 pages in 2005 to 185,000 today, he said. Those endless rules strangled the economy by trillions of dollars as companies spend so many resources on compliance rather than innovation, expansion and employee pay. Last year, the Trump administration took 22 deregulatory actions for every one new regulation, saving about $8 billion in regulatory compliance costs alone.
Interestingly, Snaith is not worried about a trade war undercutting his economic projections because he does not think there will be one.
“Are we going to have a trade war? My answer is no. Everybody knows that no one wins in a trade war,” he said. However, he thinks that some of the nation’s trade deals do need renegotiating because they were unbalanced, and China was cheating on them.
“If you are a manufacturer, you are not on an even playing field with China,” he said.
Snaith is about as mainstream as you can get in the economics field. And his projections record is stellar. His optimism is worth paying attention to.
Rod Thomson is an author, TV talking head and former journalist, and is Founder of The Revolutionary Act. Rod is co-host of Right Talk America With Julio and Rod on the Salem Radio Network.
Today’s news moves at a faster pace than ever, and a lot of sources are not trustworthy. Whatfinger.com is my go-to source for keeping up with all the latest events in real time from good sources.
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