It’s a new year and the stock markets are already hitting new all-time highs. Soon you’ll get $50,000 on the Dow Jones and over $7,000 on the S&P 500. The left-wing media never talks about this, but about 135 million American investors certainly talk about it. This also applies to all left-wing union pension funds. Inventories up, taxes down. Inventories up, federal regulations down. Inventories up, energy prices down.
All told, that equates to a roughly 25% drop in oil prices, rippling through virtually the entire economy, delivering higher take-home pay for middle-class kitchen tables and higher profits for corporations across the country.
Tax cuts are good for profits. Deregulation is good for profits. 700,000 new private jobs and a drop of nearly 300,000 federal jobs mean more profits. Profits build great companies. Profit means more employment. Profit means higher wages. Profits are the mother’s milk of stocks. Think about it. It’s not the first time I’ve made this point. It’s kind of my thing.
Heritage Foundation Chief Economist EJ Antoni and Steve Forbes, Chairman of Forbes Media, discuss how energy costs are rippling through the economy, the arrest of Venezuelan dictator Nicolás Maduro and more on “Kudlow.”
Aspirin, ballpoint pens, cell phones, coffee makers, computer keyboards and monitors, dog collars, eyeglasses, food fertilizers, golf bags and golf balls, and eye pads, and iPhones. And laptops. And luggage. Pajamas and pharmaceutical products. And shaving cream, and shampoo, and skateboards, and tennis rackets. And hundreds of other items. The drop in oil and gasoline prices is currently the greatest story that has never been told.
CPI reports in the coming months could even turn negative. I’m not saying every month, but you may get negative prints due to falling energy prices. The averages for October and November were one-tenth of a percent. That’s all 0.10%. Well below the Fed’s target. That means wages have even more power if prices actually fall. That means the real GDP of the entire economy could show a 5% print of 6% or 7%. Not every quarter or year, but the force of falling energy and falling inflation can drive the economy higher.
There is already an economic boom and tax refunds are on the way. Plus, Trump’s factories – he likes new factories – are a great way to avoid tariffs. And to create jobs and build wages. And keep prices low. And build wealth in the stock market. Falling energy prices will hand the midterms to the Republican Party, as long as they sell them. It’s the greatest story never told.
