Suitably Flip

Dow Pierces 14,000, Voodoo Economic Trend Continues

When the Dow Jones Industrial Average crossed the 14,000 threshold soon after this morning's opening bell, it was the second time in 3 months that the index had broken a new 1,000 mark.  Today's producer price index data gave further support to the idea that inflation is continuing to moderate, notwithstanding continued strength in the labor market (typically an inflationary pressure).  That strength is illustrated by the curiously low unemployment rate, which has been driving downward consistently over the last 4+ years, roughly in parallel with the raging bull market which has seen the Dow surge 86% since its 2003 lows.

It's no coincidence that this resilient Goldilocks scenario followed the sweeping Jobs and Growth Tax Reconciliation Act of 2003 (aka the capital gains and dividend income tax cuts).  With that master stroke of the supply-side pen, our poorly favored President ushered in a period of remarkably unflappable economic prosperity.

At 46 months and counting, Bush already holds the record for the longest period of consecutive job creation under a single administration.  If the streak continues through September, it will break the all-time record set jointly by Reagan and Bush 41 between 1986 to 1990 (a streak fueled in no small part by Reagan's sweeping 1986 tax cuts).

Bear in mind that the new Congressional majority is not so keen on prolonging this widespread growth and prosperity, if it means acknowledging the tremendous impact of the 2003 tax cuts and begrudgingly extending them.  Rather than acknowledging the significant tax hike represented by a prospective failure to extend or make permanent those cuts, growth-haters prefer to highlight the need to "close the loophole" or "roll back the giveaways to the wealthy".  Wrenching the semantics is popular among tax-hikers who count on the idea that enough people will be sufficiently bedazzled by the faux-populism of punishing investment and productivity, that they won't notice the clear causal connection (supported by both theory and mountains of fresh empirical evidence) between pro-growth fiscal policy and economic prosperity throughout the economic spectrum.

Still, as the superb economic impact of Bush's first term fiscal agenda grows ever more superb, it's starting to become difficult to hide.

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Dow Pierces 14,000, Voodoo Economic Trend Continues

When the Dow Jones Industrial Average crossed the 14,000 threshold soon after this morning's opening bell, it was the second time in 3 months that the index had broken a new 1,000 mark.  Today's producer price index data gave further support to the idea that inflation is continuing to moderate, notwithstanding continued strength in the labor market (typically an inflationary pressure).  That strength is illustrated by the curiously low unemployment rate, which has been driving downward consistently over the last 4+ years, roughly in parallel with the raging bull market which has seen the Dow surge 86% since its 2003 lows.

It's no coincidence that this resilient Goldilocks scenario followed the sweeping Jobs and Growth Tax Reconciliation Act of 2003 (aka the capital gains and dividend income tax cuts).  With that master stroke of the supply-side pen, our poorly favored President ushered in a period of remarkably unflappable economic prosperity.

At 46 months and counting, Bush already holds the record for the longest period of consecutive job creation under a single administration.  If the streak continues through September, it will break the all-time record set jointly by Reagan and Bush 41 between 1986 to 1990 (a streak fueled in no small part by Reagan's sweeping 1986 tax cuts).

Bear in mind that the new Congressional majority is not so keen on prolonging this widespread growth and prosperity, if it means acknowledging the tremendous impact of the 2003 tax cuts and begrudgingly extending them.  Rather than acknowledging the significant tax hike represented by a prospective failure to extend or make permanent those cuts, growth-haters prefer to highlight the need to "close the loophole" or "roll back the giveaways to the wealthy".  Wrenching the semantics is popular among tax-hikers who count on the idea that enough people will be sufficiently bedazzled by the faux-populism of punishing investment and productivity, that they won't notice the clear causal connection (supported by both theory and mountains of fresh empirical evidence) between pro-growth fiscal policy and economic prosperity throughout the economic spectrum.

Still, as the superb economic impact of Bush's first term fiscal agenda grows ever more superb, it's starting to become difficult to hide.