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After Hurting Economy, Liberals Moving in for The Kill

After Hurting Economy, Liberals Moving in for The Kill

By    |   Monday, 04 April 2016 01:22 PM


For more than two centuries the U.S. economy has survived wars and depressions. It seemed invincible until excessive regulations began to slowly choke growth.

Graham-Dodd and other regulations imposed on industries carry costs. These costs have to be passed on to consumers or corporations must reduce expenses to pay the new costs. Either way, regulations slow growth.

Despite eight years of increasing regulation, the economy looked set to turn the corner and resume growing again after the next election. Unfortunately, minimum wage proponents ignored economic theory and have succeeded in passing $15 minimum wage laws in California and New York.

Economic researchers have concluded the minimum wage should be no more than half the average wage in a region. This points to the need for finely tuned policies that set minimum wages by county or even locality. Instead, a growth-slowing policy is being enacted that raises the minimum wage above what most economists believe is a safe level in most counties of California and New York.

Like a flood, this will be a slow-moving disaster as the wage floor is slowly raised.

Unemployment will rise slowly and allow backers of the high minimum wage to deflect blame. Inflation will also rise slowly and many will wonder how prices are rising as economic growth slides.

If these policies are unchanged, stagflation is likely to develop. Democrats have worked hard to undo the Reagan revolution and now they seem poised to undo the gains initiated by Reagan’s policies before the fortieth anniversary of the Gipper’s second term.

Michael Carr, CMT, is a subadviser to a mutual fund family and a chartered market technician. To read more Michael Carr, CLICK HERE NOW.

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For more than two centuries the U.S. economy has survived wars and depressions. It seemed invincible until excessive regulations began to slowly choke growth.
liberals, economy, conservatives, reagan
279
2016-22-04
Monday, 04 April 2016 01:22 PM
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