2017-07-14 / Letters

U.S. economy is throttled

Last week’s Acorn article that stated the economy is improving under Trump is misleading. At least, that is what The Economist thought in its editorial last week concerning President Trump.

“America’s economy is seemingly in rude health, with stock markets near their all-time highs,” it said, before warning, “The rising monopoly power of companies has gone unchallenged.”

This produces price-gouging that artificially jacks up stock prices. Stock buybacks do likewise. Both lead to inflated price/ earnings ratios, unconnected to the health of the economy. Remember, there are more fundamental measures of economic health than stock market bubbles.

Corporate profits are at a record high share of gross domestic product. Wages are at a record low. Both these elements mean that less purchasing power is available for consumers. Fundamentally, America’s economy is driven by consumer spending. Fundamentally, America’s economy is throttled by record inequality, worse even than the Great Gatsby days.

Remembering that economics is famously “the dismal science,” let us conclude with The Economist’s somewhat more sober outlook: “Sooner or later, the harm (from Trump) will spread beyond the Beltway and into the economy.”

Raymond Freeman
Thousand Oaks

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