Monday, December 12, 2016

Animal spirits are perking up

Over the weekend we had dinner with friends in north San Diego County. His firm provides consulting services to other firms that are in the initial stages of planning residential and commercial projects in the area—projects that won't be finished for 2-3 years. "Last summer was the worst summer we have ever had," he lamented. New business all but dried up. But days after the November election new business began pouring in. He's busier now than ever before.

This squares with what I have been thinking for the last six months or so: faced with the extreme uncertainties surrounding the election, decision makers would be compelled to put new projects on hold, thus weakening the economy. But now that Trump has won and it appears likely that he is going to advocate for reduced tax and regulatory burdens, decision makers are much more willing to pull the trigger on major project decisions. If "animal spirits" are perking up even before tax and regulatory burdens have been cut, imagine what might happen if and when they actually are.

This is only anecdotal evidence, to be sure. But I'm pretty sure that next year promises to be a much better one for the economy.

UPDATE (11/13/16): The NFID Small Business Optimism Index jumped almost 4% in November, thus providing some corroboration for what I learned from my friend.

5 comments:

Johnny Bee Dawg said...

Precisely.
And its everywhere.
Its ON. We are ready, and the record cash on the sidelines is going to be put to use.

Matthew Grech said...

Maintain a stable dollar, slash regulations, slash taxes, and move decisively toward a non-interventionist foreign policy and this economy will soar. And don't listen to the left. They're economic idiots, to a man.

Benjamin Cole said...

Yes, anecdotes, but I think something positive is out there.

I think it is wonderful that we have a U.S. president who talks mostly about business and not foreign entanglements.

I sure hope Donald Trump does not become seduced and polluted in the Washington DC international sewer.

Trump's skepticism of the CIA is justified. Trump's recent criticism of the ghastly F-35 fighter jet is necessary.

I wish Trump all success.

Benjamin Cole said...

Yes, anecdotes, but I think something positive is out there.

I think it is wonderful that we have a U.S. president who talks mostly about business and not foreign entanglements.

I sure hope Donald Trump does not become seduced and polluted in the Washington DC international sewer.

Trump's skepticism of the CIA is justified. Trump's recent criticism of the ghastly F-35 fighter jet is necessary.

I wish Trump all success.

Michael McGaughy / 麥德安 said...

Thanks for the insight. Another great post!