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The Economy Read

4/6/2016
By Charles Payne, CEO & Principal Analyst

Yesterday, there was a report that two well-known and accurate economic models used to predict the winner of presidential elections, and it points toward a GOP victory.

Despite the rise of terror and hot-button issues like immigration, when we step into the voting booth in November, our financial condition will move that lever.  For many, including American men, that will be a heavy arm weighed down by the fading hope of being the bread winner that once kept a roof over the heads of his family and sent his children to college.

Last week the jobs report was deemed a positive on Wall Street, but it was more of the same ho-hum stuff that has Main Street ready to revolt.  The big news was the seven increases in wages, which seems like a cruel joke to the American worker who is not making more than they were a decade ago despite the always persistence rise in inflation, including most recently, skyrocketing healthcare costs.

That brings me to the current election campaign, which has been marked by the kind of anger that’s fueled revolutions throughout history, when the masses either don’t have a voice or think they do but their will is always ignored. The biggest thing is Americans want the ability to pull themselves up by the bootstraps.

There are two charts that illustrate why the voting public is erupting and demanding changes to the way the nation does business.

Wages aren’t moving.  While the media and spin-doctors fret about the so-called income gap as a means of promoting higher taxes or alternate economic platforms (Hello Bernie), the fact of the matter is the rich aren’t taking from the poor.  It’s that the middle class has fewer options to change to dictate their own fortunes.

So, the bottom 50% of earnings have seen wages slip almost 5 percent since 1973.

https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/wonkblog/files/2016/03/2300-2.jpg&w=1484

 

Last month 29,000 jobs were lost in manufacturing to go with 16,000 lost in February.  It’s a trend that goes back decades. Manufacturing jobs peaked at 19,554,000 in June 1979 and is now 12,290,000. 

https://research.stlouisfed.org/fred2/graph/fredgraph.jpg?hires=1&g=416L

While there is no doubt Donald Trump has benefited the most from his position that trade and bad trade deals have been the culprit of all those lost manufacturing jobs,  on the democrat side, Bernie Sanders has won big in states where factories used to employ lots of people.

The question is how to bring those manufacturing jobs back or compensate for the void left in the wake of them vanishing.  That void includes preparing the nation for the next 100 years or the so-called knowledge economy.  Now is not the time to talk about higher taxes.  Now is the time to mobilize the nation, and make fixes that create jobs now, and keep us number one for years to come.

Considering the big wins for Cruz and Sanders, is this a turning point in this year’s race for the White House? 

 Yes, Cruz could win nomination
 Yes, Sanders has all momentum and enthusiasm
 No, Trump will win nomination
 No, Hillary machine too powerful

Click here to vote

Charles Payne
Wall Street Strategies


 

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