Economics for the Real World
Despite the fact that all his news is decidedly not good (there’s another great depression coming in 2030!), Alan Beaulieu knows how to work a crowd. It was a lively audience at Friday’s afternoon keynote to hear the data-driven insights Alan and his firm ITR Outlook bring to bear.
The presentation was far-ranging, as you might expect when you’ve got to cover requested topics like the stock market, tax reform, manufacturing output, NAFTA, interest rates, GDP, and more. It’s easiest to capture in snippets, so here’s a few takeaways that will give you some highlights of the talk and a glimpse into Alan’s style.
There’s lots of good news. Corporate profits are rising. Money is being spent. Incomes are going up.
Debt levels are going up, but delinquency rates are holding steady. We’re doing just fine.
Wages are going up nicely. Alan’s surprised when he hears people say they were better off in the 70s. How many of you had four flat screen TVs in your house in the 1970s? We’re living in the golden age. The economy will be your friend. You will deliver the jobs, you’re the heroes of the story.
Leave Politics Out of It
The economy does not care who the President of the United States is. When a politician stands before you and says look what I’ve done, remember the economy was accelerating before the election. It’s about the economy, not a particular person.
Business Slump in 2018
The economy will start to go soft in 2018. The economy will work against you in 2018 and 2019, and then we’ll get to the roaring 20s and have a good time. Even though there’s a record high level of temporary employment activity it’s starting to slow… which suggests a slowdown in 2018 in terms of the demand for people.
Net Drain of People
What happens in an economy that loses people? Stores have fewer people to sell to, and it’s harder to get labor, as we all know first-hand. When one part of the country wins (with an influx of talent) another loses. “Even immigrants don’t want to go to West Virginia.”
Global & Political Events
Don’t worry about Brexit. The world will go on. There’s not much to know except that it’s a great time to buy a castle. Similar philosophy for NAFTA – we need it and it will be fine.
Baby Boomers vs. Millennials
We have 40 million baby boomers drawing down on Social Security and Medicare. It’s not sustainable. But eventually the boomers will die off, and millennials will change the system and come up with the answer in due time. Millennials should buy homes and real estate but back off on equities as the recession nears – they’ll get through the recession and come out ready to rebuild on the other side.
Alan’s all for tax reform and simplifying things, and for lowering the corporate rate to spur investment. But the personal side won’t do most people here any good. Politicians say reform will deliver $4,000 to the middle class. But they don’t tell you that’s over eight years.
More on Tax Reform
A “ten-year” plan won’t happen. Never has, never will. At most a tax decrease raises GDP for a couple of years, not ten. It’s unlikely to wake up the economy. Plus, do you believe congress will take that extra trillion dollars and pay down the debt?
Rise of Robotics
We have never had more job openings in manufacturing than we do today. We don’t need to create manufacturing jobs we need to create manufacturing labor. In the absence of labor, the robotics industry is doing well. But when someone says robots will take all our jobs, Alan says Wall-E was just a movie, get over it.
The Fed is going to raise interest rates. That means you should borrow today – as much as you can, until you can’t sleep at night any more… that kind of money. Invest in your business and enjoy it for the next 20 years until the recession in 2030. Just make sure you sell your business before then (preferably to someone you don’t like).
Want more from Alan and ITR?
Email firstname.lastname@example.org with the subject line “TechServe Alliance” and they’ll get you set up.
Alan has been providing workshops and economic analysis seminars in countries across the world to literally thousands of business owners and executives for the last 25 years. He is considered one of the country’s most informed economists.