A weekend Investor’s Business Daily column by the venerable Arthur Laffer and Stephen Moore reports that Mrs. Clinton claimed, “I won the places that represent two-thirds of America’s gross domestic product. So I won the places that are optimistic, diverse, dynamic, moving forward.”
Conversely, she claimed of Trump voters that they “didn’t like black people getting rights, and don’t like women … getting jobs.” It was a rehash of her now infamous “basket of deplorables” speech from the summer of 2016. Even some Democrats were appalled by her comments.
Besides resorting to the basest of demagoguery, IBD lines out the facts demonstrating that she is flat wrong. Although deep blue states such as California, Connecticut and New York have large economies, they are losing work talent as steadily as air leaking from a punctured tire.
Blue state exodus
All but three of the twelve states Mrs. Clinton won by the widest margin have seen net loss of residents over the last ten years, averaging a 6 percent decline. Almost 1,000 people per day move from a blue state to a red state.
Yes, states like New York and California, in sheer size of population, still produce, as she claimed, “two thirds of gross domestic product”, but wealth is bleeding out of blue states to red states. IRS figures show a depletion of $113 billion in wealth countered by a $116 billion increase in Trump country.
Perhaps the most telling stat cited in the article was this one:
“A recent Gallup Poll asked Americans if they would want to move out of their current state of residency. Five states had more than 40% of its respondents answer yes: Connecticut, New Jersey, Illinois, Rhode Island and Maryland. Hillary country!”
As discussed here previously, the current volatility in the markets is largely attributable to rising interest rates and fears that the Trump tariffs could ignite a trade war. Yet just today the market recovered a substantial portion of its losses last week, due perhaps in part to indications that Trump’s hardline may already be forcing China to open up its markets to American goods. The hardnosed businessman in the White House may know a thing or two about negotiating.
Economy rising, and so might inflation
Jerry has forecast that the economy should continue to prosper in the next several months to a year, but with that will come a return to inflation, perhaps 1970s style, as Jerry predicted in From Boom to Bust and Beyond. This would be the beginning of the “fire” phase that Jerry said would come when the “ice” phase of deflation had run its course.
The markets continue to be greatly overvalued, price to earnings ratios are way out of whack and margin debt is very unhealthy. There is still volatility ahead.
Come to the next Smart Money Investor Training Conference
Don’t miss our next Smart Money Investor Training Conference on April 26th, 2018 at the Smart Money Education Center of the Cornerstone Financial offices in north Dallas. Jerry will continue prepare attendees for investing during the upcoming “fire phase” that he foresaw in From Boom to Bust and Beyond and which shows signs of stirring again.
Call 800-327-4285 to reserve your seat, or click here to register. We only ask that you be a first time attendee and that you have $100,000 of investible assets.
We look forward to meeting you then.