US Chamber of Commerce 2017 State of American Business Speech and Analysis

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Today at the US Chamber of Commerce (USCC) President Thomas J Donohue gives the organization’s annual State of American Business speech. Donohue’s speech was highly anticipated given that President Obama gave his farewell speech in Chicago last night and President-elect Trump’s press conference will air today. Below I have separated Donohue’s talking points by category. My summary and the link to the official transcript are at the bottom.

Economic Forecast

  • Forecast Moderate 2%-2.5% economic growth
  • Inflation subdued
  • 2-3 Federal Reserve interest rate hikes
  • Fed monetary policy at odds with USCC
  • Explains that growth increase from 2% to 3% is not 1% growth increase but a 50% ([3-2]/2)
  • Focuses on people and employment

Government Regulation

  • Mentioned the Regulatory Accountability Act

Energy

  • Harped on nuclear energy
  • Wants energy regulation

Infrastructure

  • Intermodal transportation
  • Proposes quick permitting process to stimulate infrastructure
  • Private infrastructure
  • Wants federal funding to play a larger role
  • Moderate federal gas tax to finance infrastructure
  • He’s proposing large government infrastructure

Tax Reform

  • US double taxes companies that do business overseas

Trade

  • Pro-TPP
  • If we’re going to hire America, we’re going to have to sell America – Best slogan
  • Address how workers will be hurt by automation and globalization

Education

  • K-12 reform
  • Specialized training that don’t require degree
  • Proposes that there be financing for adults who need retraining to get the certificates and education needed to do the job.
  • Work-based partnerships
  • Business partners with workers

Immigration

  • Sensible legal immigration reform
  • Not pro-illegal immigration

Legal system reform

  • Excessive litigation
  • Fighting third-party litigating financing
  • Defending arbitration
    • Unfair when people want to sue in legal court versus settlement. Also settlements have NDA clauses and aren’t public. As a voting public, you should have perfect information in order to ‘vote with your dollars.’. That perfect information is an economic principle. Perfect information ‘clears’ the market because both the buyer and the seller understand the terms without pretense.

Conclusion

  • Making growth a priority
  • Convoke regional business of chamber summits. They’ll small businesses. – Come to my hometown, Cleveland.
    • Let’s not lose sight that the US Chamber of Commerce is right across the street from the White House. There is no amount of posturing that negates that fact that USCC is the de-facto lobby for American Fortune 500 companies.

Summary

Overall a very partisan, pro-growth speech to be expected. In light of Trump’s election, the USCC is clearly focus on pushing its agenda here. The president has nuanced this in his 2017 state of American business speech. His speech focuses on economic forecast, the Federal Reserve, energy, infrastructure, tax reform, trade, education, and immigration.      I am very happy to not only have an economics degree but have worked as an economist because I can synthesize better than most when it comes to this speech (Trained economist. Check my LinkedIn https://www.linkedin.com/in/carlarjenkins ). Here are some economic issues with the USCC President’s speech:

Economic Forecast

  • You cannot be anti-everything. The USCC doesn’t mention how its economic recommendation would increase growth from 2% to 3%. That would have been more constructive.
  • The Affordable Care Act has its roots in then Mass governor Romney’s universal healthcare plan. That’s the dirty little secret that nobody wants to tell when people holler ‘repeal ACA’.
  • You cannot cut entitlement and pour the money into infrastructure. That does not make sense.

Government

  • The Regulatory Accountability Act is great in theory but won’t pass for two reasons: 1) government types don’t listen to private sector people and 2) the USCC President has spoken in nuances about his apprehensions with the future Trump administration.

Energy

  • Nuclear energy is too costly and harmful. Solar energy is a much safer and cheaper option. Moreover, several Fortune 500 companies have made serious capital investments in the solar realm.

Education

  • Once again, not having a K-12 education plan and how these reforms will benefit big business hurts the credibility. How will USCC reform it? No mentioning of adding financial literacy (which would be advantageous to

Legal System Reform

  • Defending arbitration
    • Unfair when people want to sue in legal court versus settlement. Also settlements have NDA clauses and aren’t public. As a voting public, you should have perfect information in order to ‘vote with your dollars.’. That perfect information is an economic principle. Perfect information ‘clears’ the market because both the buyer and the seller understand the terms without pretense.

Conclusion

  • Convoke regional business of chamber summits. They’ll small businesses. – Come to my hometown, Cleveland.
    • Let’s not lose sight that the US Chamber of Commerce is right across the street from the White House. There is no amount of posturing that negates that fact that USCC is the de-facto lobby for American Fortune 500 companies.

Read USCC Thomas J Donohue’s full remarks here:

https://www.uschamber.com/speech/2017-state-american-business-address

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