Arthur Laffer is laughing, with giddiness. He is truly tickled.
You see, the economic advisor to former President Ronald Reagan is ecstatic over progress he sees in technology, in medicine, in the overall standard of living in America.
“It’s just astounding what has happened,” Laffer says. “I’m just awfully impressed and pleased by the progress.”
Laffer revels over the growth and advancement of leading U.S. technology companies. And the wealth these companies have created for shareholders, employees and communities in which they operate.
“This technology is great, although I’m not a user of these technologies,” the old-fashioned Laffer, 76, says. “But I am an investor. What I would stress is the wealth they’ve created for everyone else.”
Revolutionary leaps in U.S. medicine and healthcare are mind-boggling. “In medicine there are all sorts of areas where we’ve made huge advancements — that have made everyone on earth better off.”
Laffer runs his own firm now, as a private-sector economist. His is frequently interviewed in the national media. His enthusiasm and rose-colored-glasses outlook are contagious.
He likes the direction the U.S. is now taking, emulating what he pioneered under Reagan. Lower taxes and less regulation is a time-tested recipe for economic growth. A handsome payoff is coming, he believes.
“You’re looking at beginning of an enormous boom in America,” he says. “It may not be that fast in the first two years, but it will be an enormous boom as we undue the damages done by last two administrations, both ‘W’ and Obama.”
The progress we’ve made is in some ways only a beginning. “You’ll see wonderful progress in America over the next eight, 10, 12, 15 years,” Laffer predicts
The economic numbers coming from the U.S. have been spectacular.
This past month, 263,000 jobs were created in the private sector, according to the ADP report. This is the most in any of the past 12 months.
The ADP report is a private-sector estimate for what the monthly employment totals will be. The official release — from the U.S. government — will come this Friday, but the ADP report is usually an accurate precursor.
There are even more promising developments beneath the employment numbers. Of the new jobs, fewer were in the lower-paying service industry and more were in goods-producing sectors of construction, manufacturing and mining. New goods-producing jobs have been mostly absent from previous employment reports.
Within the manufacturing sector, nearly all of the 18 industries (in this sector) reported growth — and none experienced contractions. This is quite promising.
Meanwhile, financials (banks, mortgage companies, brokerage firms, etc.) are rallying dramatically in anticipation of reduced regulations, particularly from the laborious Dodd-Frank Act.
In a letter to shareholders, J.P. Morgan Chief Executive Officer Jamie Dimon said that U.S. banks are sitting on $200 billion. These funds are being held by the banks — instead of lending them out — to meet regulatory barriers and other types of risk.
The intention of reducing financial regulations is that this money and others like it will be loaned out to individuals, corporations, municipalities, etc. This is what banks normally do. Instead, they are preoccupied with a plethora of regulations today.
Dimon puts it into perspective. His prominent bank used to have seven loan officers for every compliance officer. Now, that sequence is reversed, at J.P. Morgan and at other major, regional and small banks. Inevitably holding back Laffer’s envisioned U.S. economy.