I am pretty sure I am not alone in experiencing occasional high levels of frustration over the current political divisiveness in our country. Too many of our fellow citizens are caught up in a sort of political party righteousness — making discussions difficult and solutions unreachable. In some ways it seems that we have a political divide not seen since 1861. However, what is rather odd about the whole thing is how well we — as a society — actually ARE doing.

Apropos of this, Jim Geraghty’s column in National Review this week makes some very interesting points. He begins with this:

“We groan that we’re governed by crooks, incompetents, and morons, but we’ve actually done a pretty good job of solving the problems that faced this country a generation ago.”

As I read through Jim’s piece I found a few outstanding examples of just how much we have improved in some important areas. Here’s a sample:

“Crime rates? Way down from the 1990s. Drunk-driving rates? They hit a new all-time low a few years ago. Air travel keeps getting safer and cheaper.

Teen-pregnancy rates? Steadily declining. The abortion rate? The lowest since Roe v. Wade passed. Our infant-mortality rate is low and getting even lower.

High-school graduation rates? Highest level ever. With the exception of marijuana, teen drug use is down dramatically. Very few teenagers are succumbing to the national opioid-abuse epidemic. Teenage binge drinking is way lower than in the 1990s.

Slightly more than a third of American adults have a four-year college degree, the highest level ever measured by the U.S. Census Bureau. College enrollment has dropped by 2.4 million since 2011 . . . but one might interpret that as a customer base rejecting an overpriced product.

You’ve heard about the low unemployment rate. When Vice President Mike Pence boasts that more Americans are working than ever before, skeptics scoff that it simply reflects that the American population is larger than ever before. But there are now more job openings than unemployed workers. The all-time high in the employment-to-population ratio was 64.7 percent in April 2000; we’re currently at 60.4 percent. It got as low as 58.2 in 2010. (Census Bureau figures indicate that 4.4 percent of those 85 or older are still working!)

Census Bureau data indicate that the median U.S. household income in 2016 was $59,039 — and that the past two years combined have shown the fastest growth since the 1960s. The poverty rate is 12.7 percent, almost but not quite to pre–Great Recession levels. Yes, we would like to see some better numbers for wage growth, but separate Labor Department data just released days ago showed workers’ wages and salaries increased 2.8 percent over the past year. The Federal Reserve and Wall Street economic forecasters feel confident for the future.” (*Credit: https://www.nationalreview.com/the-morning-jolt/america-future-optimism-warranted/)

Of course, none of this is meant to suggest smooth sailing is guaranteed or necessarily even something to be expected. However, we should not fail to take notice of the ability of Americans to work through their difficulties and, much more often than not, end up with advancements and improvements that benefit all of us.

Market Minute – 8/10/2018 Within Spitting Distance

It’s been a mostly ‘up’ market this week, and several of the main indexes are within spitting distance of their peaks in January of this year. So, US markets continue to be strong, however, the rest of the globe is looking a bit exhausted. Over the past decade there have been two periods in which the US out-paced the rest of the globe for a while, but then the global stocks played catch-up. SO, is it about the tariffs again?

With all the headlines about a potential ‘trade war’ still going around, it seems that many are perhaps getting the idea that the age of globalization is ending. I don’t see many headlines that discuss how trade continues to show strength in the global economy. We look at total volume of trade, that’s imports plus exports to signal how much value consumers find today in the global economy. Total US trade hit a new record all-time high in June. A number of new tariffs have been started recently, but despite this, exports this past year are up 9.8% and imports are up 8.6%. This signals a very healthy gain in overall volume of international trade- with both of those numbers outstripping nominal GDP growth (5.4%). Despite the ongoing discussions regarding possible trade hiccups and dire forecasts of protectionism, we believe this is merely a trade skirmish, and that the odds of an all-out trade war that hurts the US economy noticeably are slim. I note that current tariffs in the US are 3.4% vs. tariffs in the EU of 5.1% vs. tariffs in China of 9.8% vs Mexican tariffs of 6.9%. It appears that it’s time for tariffs to be re-thought, in our opinion.

We will continue to watch trade policy as changes develop, but we do not see any reason (yet) to be sounding alarm bells.

(Trade numbers courtesy Brian Wesbury)


Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk

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