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Economy is Weak, Stocks Are In A Bubble, And Washington Must Change Course (opinion piece)

The strength or weakness of the U.S. economy is measured each quarter by its GDP. About 30 days after each calendar quarter the Bureau of Economic Analysis (BEA) releases its report on how the economy performed during the previous quarter. That’s known as the first report. About 30 days later, the BEA issues a revision, known as the second report. Thirty days later, the BEA issues its third and final report on GDP which is the one logged into the public record. The reason for the three releases is that additional information is obtained each time and the report’s accuracy is improved.

The first release for the first quarter 2015 indicated that the U.S. economy grew at a rate of 0.2%. The second release which was issued on May 29th revised this lower to a negative 0.7%. The third and final release will come at the end of June. In any event, the economy is slow – actually contracting, which is never a good thing for stock prices, jobs, or much else really. If the economy were to contract during the second quarter we would officially be in recession.

What’s the cause of the economic contraction? Some blame the weather. Others point to the West Coast port strike. Perhaps it’s partly due to the rising dollar which reduces U.S. exports. Still others say that Washington is to blame. This last item centers on fiscal policy (i.e. tax policy and regulations) which has stifled small businesses, long considered to be the lifeblood of the U.S. economy. Whatever the cause, the U.S. economy is and has been slow, since the Great Recession ended in June 2009. Clearly, the extended run up in the stock market, which long-term requires a healthy economy for strong profits, is in the early to mid-stage of a bubble. This is evidenced by a reading of 126.8% in the “total market cap to GDP” ratio (100% is fairly valued).

What will happen in the next two years? Will the U.S. economy be able to withstand the same worn-out, over-regulating policies we’ve had for the past six years? Unless and until a new regime is installed in Washington, one which is more business friendly and less concerned with remaining in power, I fear the economy will continue to suffer. A weak economy is never good for anyone, including those who believe the rampant demagoguery of the day. It’s time to slash the soundbite and install statesmen (and women) who will put the interests of the country ahead of personal gain. Until that occurs it’ll just be more of the same, something few people really want.

Obama official once said train-safety cost outweighed benefit

WASHINGTON -- When a Republican lawmaker in 2011 asked an Obama administration Office of Management and Budget official to name regulations where costs were not justified by benefits, the official had a ready answer.

"There is only one big one that comes to mind," said Cass Sunstein, then administrator of the White House OMB's Office of Information & Regulatory Affairs. "It is called Positive Train Control.''

Even though the regulations for the $13.2 billion rail-safety system were mandated by Congress, "monetizable benefits are lower than the monetizable costs," Sunstein told then Rep. Sue Myrick, R-N.C., at a House Energy & Commerce subcommittee hearing. "There aren't a lot like that.''

Interesting article concerning the Obama administration's view of train safety vs cost.

Soros Donates $159 Million To Bill De Blasio’s Newly Launched “Progressive Agenda”….

Soros Donates $159 Million To Bill De Blasio’s Newly Launched “Progressive Agenda”….

In an effort to revitalize and unify the far-left Democratic party, progressives have relied on the very thing they often criticize -- the deep pockets of a billionaire supporter. Agenda supporters were linked to at least $159 million dollars in donations or political contributions from Soros.

Many of those self-proclaimed progressives will gather on the steps of the U.S. Capitol May 12 at 3 p.m. to celebrate a new, far-left “Progressive Agenda.”
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