Whose economy is it?

Unemployment is low and the stock market is rising. Two of our primary indicators of how the economy is faring. Trump supporters say that it is the result of the president’s tax policy and curtailment of governmental regulations. Obama supporters say it is just the continuation of eight straight years of growth that began in the former presidents first year in office. Who is right? I think they are both right. However, the better question might be which pro-growth policies are best for us in the long run. One famous economist described the levers that move our economy are similar to a game of whack-a-mole. If you pound one mole in the head another mole will pop up somewhere else. In other words, every governmental action causes a reaction somewhere else in the economy. If you lower taxes for example it will be good for some part of our economy and bad for another. The Trump tax cut added billions to the bottom line for many of our largest corporations, but it has caused a record spike to our deficit, which among other things is causing interest rates to rise. Is that trade off worth it? Depends who you ask. The Trump administration believes that in time, the tax cut will cause so much growth, overall tax revenues will actually increase and lower the deficit. Rather than cut taxes for corporations, the Obama administration focused on other stimuli to prop up the economy such as tax credits for lower income families, increasing social security payments, infrastructure spending, and increasing health care benefits. The logic from the Trump people is that if you reduce cost and the regulation burden on companies, they will hire more people and pay higher wages. The logic from the Obama is that if you focus the benefits to the people who need it most, they will spend more of that money to the benefit of both poorer families and the companies that benefit from the additional spending. One side believes that money works best when it trickles down from the top and the other believes it works better flowing from the bottom up. In my view deficits are a problem and it’s ridiculous that both parties only care about deficits when the other party is in power. The so-called Tea Party Caucus that emerged in Obama’s first term to combat our ballooning deficits, has since been totally silent on the subject. The deficit shrank every year Obama was in office, but has reversed course in the last two years without a peep from the Tea Party. I don’t believe in trickle-down economics, but it is fair to say both sides have been irresponsible with the deficit. The truth is most governmental policies take years to impact “main street”, so politicians tend to focus on short term wins. Unfortunately, those short term wins typically come with a long-term cost. At some point, we are going to have to pay the piper, and after a decade of economic growth funded by unsustainable government spending and tax cuts, that time is coming soon. We need to find a way to get money out of politics and tweak our system enough to where politicians are rewarded for serving in the long-term interest of the people. One thing we know for sure is that Hispanics are one segment of consumers and our workforce that is guaranteed to do nothing but grow. The more educated, productive and successful we help them become, the better it is for America.