Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce
September 24, 2018
Not long ago some of the nation’s most prominent economists and politicians were telling us that anemic 2% growth was the “new normal,” that manufacturing and blue collar jobs were never coming back, and that increasing wages was a nearly impossible task.
Turns out that the weakest recovery in American history that followed the financial crash 10 years ago had more to do with anti-growth policies like distortive taxes and stifling regulations – as well as a “you didn’t build that” mentality – than alleged new economic fundamentals.
The economy is back on track thanks to better public policies, including a dramatic reduction in regulations – which removed substantial burdens and uncertainty for American businesses – and powerful pro-growth tax reform.
Second-quarter growth hit the elusive 4% mark, a 100% increase from the 2% rate we muddled through for so long. Unemployment is at a remarkable 3.9%, layoffs are at a 50-year low, investment is climbing, wages are finally showing signs of rising, manufacturing employment is up, and small business confidence is at an all-time high. In fact, the Q3 MetLife & U.S. Chamber of Commerce Small Business Index indicates that 70% of small business owners have a positive outlook about their companies and the small business environment in the U.S.
Income gains are strongest among Hispanic households (3.7%), while poverty rates for blacks and Hispanics have fallen to 21.2% and 18.3%, respectively, the lowest rates since at least 1972. In fact, employers are scrounging for workers, with job openings hitting a record high of 6.9 million in July.
The economic picture may be bright right now, but like all those prospectuses warn, “Past performance is no guarantee of future results.” We need to maximize pro-growth policies and oppose those that would undermine our economy, our businesses, and investor confidence. For example, we need to build a competitive workforce. We need people to keep the growth going. That means improving workforce training and retraining, strengthening our education system, and adopting a commonsense immigration system that attracts and welcomes talent at all skill levels.
We also need to fight back against dangerous trade policies. The single biggest threat facing our economy right now is the trade war escalating to the point that it saps business confidence. If businesses feel forced to pull back on their capital expansion, it will erode much of the benefits from tax reform and regulatory relief.
The lesson of the last two years is that good policy makes a difference – in jobs, growth, opportunity, confidence, and the lives of everyday Americans. Let’s keep it up.