Tag Archives: GDP

Jerry Bowyer: Look for America to Beat Expectations Yet Again

In the first quarter of this year, GDP declined at an annualized rate of -5 percent. While that drop might set off alarm bells and panic for some, the truth is that this is a testament to the resilience of the American economy.

Despite the widespread closures and spiking unemployment, we’re still producing 95 percent as much wealth as we were last year.

While some sectors have been devastated by the crisis, many of them are not massive drivers of growth. Don’t get me wrong, this painful national quarantine is hitting many people hard.

But this crisis has shown that at its core, our economy is resilient. And we can look forward to a strong finish once the shutdowns are ended and all the suppressed economic power is unbound.

All in all, look for America to beat expectations—yet again.

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Proft: The Question the Incomplete Data Demands


36 states have COVID-19 death rates of 1 or less than 1 per 100,000.

According to the CDC, the overall death rate in America in 2018 was 724 per 100,000.

For influenza and pneumonia it was 15 per 100,000. Projecting COVID-19’s lethality rate is tricky because of the lack of a denominator on the infected. However, CDC guesstimates 25 to 50 percent of infected are asymptomatic. There’s a good chance lethality rates could be much lower than current reporting indicates.

Bristol University risk management professor Philip Thomas projects once mitigation efforts result in a GDP contraction of more than 6.84%– more lives will be lost than saved. Studies of previous recessions suggest that for every 1 percent point increase in unemployment, the suicide rate increases by 1 per 100,000.

Given what we know about COVID-19 and about the lives economic ruin takes, is a prolonged shutdown the right call?

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Bowyer: Corona Virus and the Resumption of Economic Activity


A debate is raging among conservatives over our response to the coronavirus. On one hand you hear the point that the cure is going to be worse than the disease. On the other, we hear no price is too high to protect life.

One side is talking about thriving; the other, about surviving.

Of course, the sanctity of life is first, but this is a false choice. We can protect life without shutting down our entire economy.

How?

By making some commonsense distinctions based on risk and reward.

Think of a mosh pit at a night club … high risk, low reward. Our GDP gain almost nothing from it, but the virus gains a lot.

On the other hand, think about road or bridge construction. Lots of economic punch, low contagion risk.

President Trump should look in this direction. He should extend the principle of high and low risk reward zones to the broader economy as well.

I’m Jerry Bowyer.

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Jerry Bowyer: It’s Time to Pivot Back to Pro-Growth Economic Policies

We’ve seen warning signs over the past few months that economic growth is slowing down. Now it’s official: The latest GDP report shows growth in the last quarter at about 2 percent—well below historic averages.

President Trump’s tax cuts kicked in at the beginning of last year. By last summer the economy was booming.

But now the boom’s worn off. The president blames Fed tightening; most economists blame the trade war.

And, it’s hard to ignore the volatility in our policy environment which gives business what it dreads most: huge levels of uncertainty.

There’s a real danger now that the president could enter reelection with a sluggish economy. He should make a hard pivot back to pro-growth policies, leaning on advisors like Larry Kudlow who helped him deliver the boom of 2018.

A growing economy could be the key to delivering a reelection boom for 2020.

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Jerry Bowyer: What to Do for a Slowing Economy

The Trump tax cuts have done great things for our economy, but—as I’ve warned—the economy is slowing down somewhat. The new GDP report shows the growth rate last quarter dropped from an above average 3.4 to a below average 2.6 percent. Overall, 2018 was a good year for the economy, but at the end it lost some steam, but we can get it back.

First, get out of the trade war. It’s made trade deficits higher and hitting farmers particularly hard. We’ve already created the conditions for American economic preeminence with the tax cuts, let them do their thing and let’s not seize defeat out of the jaws of victory.

Second, stabilize the dollar. America became the envy of the world when the dollar was stable in terms of gold and the currencies of other trading partners.

With just a few changes, we can unleash the American economy.

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