Don't Worry, Be Happy...and Invest

Been out on the road again the past couple of weeks. People's attitudes are the best I've seen in years, and most companies are still seeing strong markets for their goods. Some are saying that the third quarter has been a little soft, but at least part of that is attributable to the biblical amount of rainfall we've experienced here in the Eastern U.S. this summer. In Harrisburg this weekend, I gazed in amazement at the Susquehanna River full to its brim, with some riverside parks under water. Normally, the Susquehanna at this time of year looks like a rocky collection of small streams and pools. This weekend, it looked like the Mississippi.

Not as high as 2011, but almost... Source:

Managers and company owners are asking me about the economy, especially with regard to the question: Should they invest in new equipment? They're worried that the current strong economy may be temporary, and investments in increased productivity may be met with the kind of market malaise we experienced from 2007 to this past year.

But my advice is the same to them all, and to you...there has never been a better time to invest in yourself, or your company.

What we're seeing is a world-wide shifting of the trade balances as China, in particular, begins to experience the increasing wages necessary to keep their factories running. It seems that the vision of being the manufacturer of all the world's goods, by keeping ninety percent of your country in poverty, has its limitations in this world of instant world-wide communication. As wages rise in China, the competitive gap with other countries decreases, and the rising tide of economic strength becomes more dispersed. In some countries, the governments consume that increased prosperity...but in the U.S., at least, we currently have an administration that puts private and corporate profits before bureaucratic expansion. People on the ground instinctively recognize it, and it shows in their attitudes...and in their willingness and ability to go out and spend a little money, like in the old days. And my gut feeling is that the positive energy will be affirmed in elections for at least a few more years.

As Bill Clinton once famously explained to his campaign staffers...It's the Economy, Stupid!

This recent video segment from Fox Business Channel explains both the strong economy, and the tepid projections going forward. I agree with the last analyst who presciently states that the administration's economists have been trailing indicators for quite a while.

In essence, the D.C. establishment believed in the "new normal" of the Obama economy, and don't believe that the course taken by President Trump can continue to deliver.

They're wrong.

Slowly but surely, the Trump administration is enacting steps very similar to those I suggested in "Turning the Ship of State" - reduce regulation and taxation, unleash the productivity of the country's natural and human resources, and hold government agencies, sub-contractors, and grant recipients accountable for productivity metrics that demonstrate positive economic or social impact.

Economic ships don't turn on a dime, but neither do they wildly deviate once the turn is begun. We have at least a decade of economic growth ahead of us...time to take advantage.

As the song says...don't worry, be happy. And do it with wood.

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