The Key to a Successful Economy

Republicans are touting the most successful economy in this country's history.  I recently blogged about how the economic metrics might not actually reflect the true nature of the economy.  However, let's assume that the economy is doing pretty well.  Is it Trump? Is it the Republicans? I have another suggestion.  It's the Democrats!  The fact of the matter is that the economy is doing well with divided government and gridlock.  Maybe that's the key to a successful economy!

I believe that the U.S. economy hates one thing. That one thing is uncertainty.  A divided and gridlocked government assures certainty.  Nothing happens. Nothing changes.  Yes, the present administration is reducing regulations.  Honestly, in the big scheme of things, with the amount of regulations that are in the books, I find it hard to believe that the regulatory changes are having a significant difference.  In fact, in the one industry that I'm most closely attuned to, the nursing home industry, the regulatory changes are a mixed bag.  I doubt that they'll have much of an impact on the economic well doing of the industry.

I have been hard pressed to see a direct correlation between the tax cuts that the Republicans rammed through and the economy.  Honestly, as it was intended, the wealthy got wealthier.  Except for some of the somewhat wealthy people in states like California and New York, who lost their state income tax deduction.  They didn't benefit.  Congress definitely targeted blue states with that one.  Overall, though, I really doubt that tax cuts have much of a long term impact on the economy, and history supports that.  On the other hand, as I've stated, the economy loves certainty.  And certainty has a new norm under president trump.  He's all over the place on a daily basis, but nothing gets done.  The market has factored in his tweets and policy machinations and has figured out that nothing is really changing, which the markets like.

My quandary in regards to the economy is whether I want to see the Democrats control all three branches of the legislature, the executive, senate and congress.  That actually hasn't turned out that well for either side throughout our history.  Maybe, if the Democrats win the presidency and the house, and the Republicans hold on to the Senate, maybe, just maybe, we can find a way to some degree of common ground and working together?  Maybe? Or, maybe not. Hope springs eternal, but either way, if we continue with divided government, the economy will probably continue on its present path.