Andrew Jackson in 1828 moved the locus of political power sharply down the socioeconomic scale.
Abraham Lincoln in 1860 preserved the Union, freed the slaves and turned the South into essentially a third world country for the next 100 years.
William McKinley in 1896 ushered in an era of almost unbroken Republican dominance which lasted until the 1930s.
Franklin Roosevelt in 1932 who overcame the Great Depression and greatly expanded the reach and power of the federal government.
Ronald Reagan in 1980, constrained by a solidly Democratic House, was less transformational than the four presidents above, even though he ushered in the era of Great Moderation which lasted until the Great Recession hit in 2007-2008.
Barack Obama in 2008 took office with strong Democratic majorities. However the last eight years have proved a disaster for the Democratic Party. They lost the House in 2010, the Senate in 2014, and Republicans now control most governorships and state legislatures as well.
Now consider Donald Trump’s strong political position as he takes office:
The Republicans hold a big majority in the House and a small majority in the Senate. And ten Democratic Senators in states carried by Mr. Trump are up for re-election in 2018.
He was elected to change the self-serving ways of Washington and owes little to the political establishment.
His cabinet picks, many with excellent qualifications, signal profound changes in government policy, especially lower tax rates and a regulatory environment more friendly to business.
Conclusion. Mr. Trump has excellent prospects for achieving faster economic growth and therefore rising incomes for the blue-collar workers who provided his victory margin. If he can also improve life in the inner cities, as he has promised to do, he and the Republican Party will be unbeatable for many years to come.
In the latest issue of Barron’s, Frederick Rowe, the managing partner of Greenbrier Partners Capital Management, asks in “More Than a Sugar High?” , “Can you imagine a country that is managed in an economically rational manner, creating the wealth that’s necessary to take proper care of the citizens who get left behind? … What if our economic recovery is more than a sugar high? What if there is more here than insanely stimulative monetary policy from the Federal Reserve? What if the U.S. has already begun to steer an economic course to a period of unprecedented and genuine prosperity, achievement, and problem solving?”
Here are eight factors which Mr. Rowe gives to point us in the right direction:
North American Energy Independence (already on the horizon).
Sensible Immigration Reform: encouraging our most enterprising and hard-working people to become citizens rather than chasing them away.
Repatriation of Corporate Income: if a company domiciled in the U.S. makes money in Argentina and wants to invest it in the U.S. we double-tax the daylights out of it. It would be hard to imagine a more counterproductive tax policy.
Changing Directors and Their Thinking: the once unthinkable mindset of corporate directors acting on behalf of long-term owners (rather than the CEOs with whom they play golf) is actually gaining traction.
Lowering Corporate Taxes: the tax-writing committees in Congress are working on this.
Increasing Technological Leadership: the most dynamic technology companies in the world are domiciled in the U.S. Technology, in the short run, displaces workers. But eventually workers catch up because new technology creates new kinds of jobs that were never imagined before.
Americanization of the World: more than three billion people around the world will soon be able to afford to live much more like the 300 million Americans do. So companies which make it big here have an automatic global opportunity.
Obamacare: Even this bureaucratic catastrophe provides a large opportunity for economic opportunity. Think of Jimmy Carter’s failures which led to Ronald Reagan’s successes.
“Let your imagination run and consider all the things that can be accomplished by an energy-independent, cash-generating, cash-repatriating country that is a hotbed of technological innovation.”
I can’t possibly say it any better than this!