The Economy
Today's economy is strong, with steady job growth, the lowest unemployment in decades, increased private/corporate spending, teamed with bi-partisan bills, that will continue to stimulate the US economy for years to come! The latest GDP growth of 4.9%, in the third quarter of the year, and 3.3% for the fourth quarter, are beyond forecasts! The first quarter of 2024 witnessed continued growth at 1.6%, followed by 2.7% in the second.
We are the leading economy in the world, and have recovered from the pandemic better than every other major nation!
The Inflation Reduction Act has many aspects to it that will strengthen all businesses, promote employment, increase wages and develop needed infrastructure. The CHIPS Act is bringing the micro-chip and associated technologies home from overseas - which will be a huge addition to our overall GDP. These types of stimulus came from 'good government', that worked to build the new economy from the 'bottom up, and the middle out' and they are already working for us, with much more to come! And, more than 200 billion in private investment for these acts has already happened!
Inflation has dropped into the 3% range due to actions taken by the Biden administration and the FED, now, outpaces wage growth. Though it continues to be a concern and is part of the world-wide conversation, we can see some light at the end of the tunnel. As you know, the FED has raised interest rates for the past 2 years to cool the economy and bring inflation under control. It is working, with inflationary rates dropping closer to pre-pandemic levels. However, we are not where anyone wants us to be just yet, the great news is that a recession no longer appears inevitable. As inflation stabilizes, interest rates will continue to be brought down.
The causes of the inflation that we have experienced, began pre-pandemic, with the trade wars with China, de-regulation in the banking sector, supply chain breakdowns during the pandemic, and the corporate tax cuts of the last administration, when the economy and Federal debt did not warrant it. Adding the stimulus packages on top of all else, created inflation.
- The pandemic's impact on the global supply chain caused businesses to close, consolidate, lose employees and disrupt their supply. As these businesses continue to recover, supply is affected negatively, though demand is increasing. It takes a minute to disrupt a supply chain and it sometimes takes years to repair it. There has been great improvement in the past 2.5 years.
- Trade wars initiated by the last administration contributed to the inflation problem. Tariffs levied on imports created disruptions and shortages, as those companies that were impacted changed suppliers and/or customers. "America First' is a great catch-phrase if implemented properly, taking into consideration that no country exists by itself, and that supply chains do not change to your benefit with the mere declaration. Planning for shortages and bridging the gaps, while converting to a more internal-supply-economy would have made more sense, and likely have reduced the shortfalls we experienced, that is all improving today. Fair trade policy, in combination with 'free' trade is my preference.
- Fuel prices are linked to every cost and they have been artificially inflated by the oil companies and the suppliers, such as Saudi Arabia. The largest companies are posting record profits and have not increased production. Though we favor a free market in the best of times, it works against us during a crisis. The 'practice of gouging the consumer'(inflating profits) whenever there is the opportunity, as was the case during the pandemic and the first weeks of an overseas war, created a need for legislation to prevent it. As with big oil, they raised their prices prior to any increase in their cost and the supply is lower because they are keeping it that way. Their strategy of maintaining a short supply now(Saudi Arabia), is intended to drive the price up, after two years of high supply during the pandemic, which created lower demand and lower prices. The last administration worked with Saudi Arabia to reduce production to elevate prices, and the Saudis continue to keep the production lower than pre-pandemic, to maintain the margins of profit. The current administration has helped our own oil companies increase production, which keeps our pricing stable, as compared globally.
- Across the board, we need to work to increase competition in the industrial sector to allow the law of supply and demand to work as it was designed. Competition is good for everyone. Employers need to make their profits, of course, though without taking advantage of supply shortages and outside circumstances(gouging). Supply issues due to global sourcing, the scarcity of raw materials and 'just in time' inventory practices can cause delays on vital goods, such as in the micro-chip sector, and its impact on new and used vehicles. 'Made in America' is a good thing and the CHIPS Act is key to the future of industry! With additional manufacturing also comes distribution opportunities and a whole host of other supporting businesses.
- The investment in the labor force is key to the economic health of our nation. The number of people that have made career changes as a result of the pandemic-effect is driven by the need for higher wages and better benefits. Key industries with content and well-compensated employees, still require supply chains to function. Many of the supply chains are still rebounding and adjusting to the new employment concerns. In every aspect of the economy - manufacturing, supply chains, service - these concerns are real, and change must continue to occur to keep all of the sectors healthy.
- I see incredible opportunity for District 23 to grow and expand in agriculture, manufacturing, business and tourism, with a representative that can align with local, state and federal majorities.
The Truth about the American Economy.....
We always hear that the economy could be better, when it is as good as it has ever been! The GDP was 4.9%, 3.3% and 1.6% for the last three quarters, and the forecast remains strong for 2024!
The economy was not better under the previous administration. In fact, it was ranked 7th against economic metrics of the last half century.
Some other economic factoids:
-The USA GDP increased by 6.1% in 2023 and stands at 27.36 trillion/year.
-We have the world's largest economy, which emphasizes private ownership,
-10 of the last 11 recessions were under a Republican President,
-GDP growth averages just 2.5% under Republicans, and 4.3% under Democrats,
-The only Presidents that have lowered the annual deficit are Democrats: Clinton, Obama and Biden.
-Of the 7 Presidents with the highest job creation numbers since 1945, 6 were Democrats,
-8 of the 10 poorest states in America are controlled by Republicans,
-Our government is smaller at 38% of GDP than European governments that range between 44% and 57%,
-Americans have a higher pre-tax reward and higher per capita income than all other developed nations.
We have a tremendous economic system, that can continue to be improved upon through education to target future skills sets, well-thought-out tax and regulatory legislation and proper policy-making.
We need representatives that know how to solve problems, and have their eye on the future of America!
Employment
As the pandemic wound down to an endemic, we entered a correction phase in the labor market with many leaving jobs that have not provided healthcare or a living wage, creating openings in the labor market in the vacated positions. Record numbers of people have been retiring. Despite all of the changes, unemployment has returned to pre-pandemic levels of less than 4%, and has been as low as 3.5%, with wages increasing.
Unemployment has been under 4% for more than two years straight!
In order to attract additional employers to our district, our regional industrial development agencies have rightly focused on infrastructure development adjacent to the 86/17 and 90 systems. If we build it, and prepare, there is an improved chance that business will come! The groundwork must be laid! Across our district, we need to continue water and sewer system upgrades, ensuring energy grids and distribution patterns are able to serve the needs of future business expansion. In Chatauqua County, we have two industrial zones that are expanding, which is fantastic!
Combining with infrastructure and opportunities to attract business, we need an educated and qualified workforce. That includes skilled, trades-people!
The development of our residents through vocational training and education programs is exactly what we need. When companies are looking for places to land their business, they look for primed and ready locations and the availability of a well-trained, talent pool. I can aid and support the counties/municipalities that have existing industrial development teams, and assist those that do not.
We cannot wait for business to come knocking on our door - we need to prepare and then seek it!
Similar to what I have done in my career with private companies, I will collaborate with the economic development teams of each county and municipality, and with the industrial leaders in the district to determine their needs and do my best to help them achieve their goals.
Preparation in combination with effective representation, will make all the difference!
The pre-work gets you the 'work-work'.