I have a sneaking suspicion that the Federal Reserve is planning to put a halt to the Trump stock market rally by raising interest rates and talking endlessly about future increases. There is an uptick in the Consumer Price Index (CPI) in recent months, but that is not enough reason to raise the rates to choke off a rally. Consider two factors: 1. The long term inflation rate is trending down, and trending down sharply in recent years going back to the 1980’s. Reagan and Volcker defeated inflation in the 1980’s. The greater long term threat is now deflation, not inflation. Excessive debt is a long term deflationary factor for individual households, small businesses, large corporations, and nations. If there is too much debt that cannot be serviced, then assets must be sold to pay the debts. Deflation is a real possibility for the United States, not inflation. The Fed quite often fights the last war, with a knee-jerk reaction to the 1970’s and 1980’s, and misses other macro events, such as too much debt. Just check out the commodity prices of the last four or five years. Factor number 2: The Federal Reserve is not some right-wing bastion of conservatism. Federal Reserve Chair Yellen and all the other governors have been nominated by Mr. Obama. Only one other governor that I saw had any connection to a Republican. Partisan politics will play a role in the market.
Don’t repeal Obamacare and try to replace it with a brand new law that will be called “TrumpCare.” If you try a completely new law and it doesn’t work well, then you will make the same mistake that the Democrats made. Start with the “low hanging fruit” of:
Try these changes first and see if you can get some help from across the aisle. If you can implement these easier changes and it works effectively, then create one new document that eliminates the entire Obamacare document and incorporates all the changes that work effectively into one omnibus document called “TrumpCare.” This exercise is all about risk and reward for Republicans as you try to maintain control of both houses in 2018. You can make these incremental changes before the next election cycle.
Please consider the risk-and-reward dynamics of a 100% repeal-and-replace. If you don’t like the way Obamacare was crafted and passed by the Democrats, then try a more incremental approach. Hubris caused the train wreck of Obamacare. Don’t let Republican hubris get in the way of making incremental changes that work for all Americans.
qcconservative 