by Gary Alexander
December 13, 2022
“Don’t be cowardly lions. You have the majority and the support of 52 million voters. Cut deficit spending and get us back to a balanced budget. Reduce taxes that hurt our economy. Stop the Green New Deal. End the Biden war on American-made energy. Put the fraudsters in jail who stole $150 billion by scamming unemployment, Medicaid and other federal programs. Make sure education dollars go to parents and children to attend the school of their choosing. Make Congress Great Again.”
–Stephen Moore, “Can Republicans Make Congress Great Again?” Washington Examiner, November 22-29, 2022
The new Republican majority in the House will be sworn in on January 3, 2023, just three weeks from today. It’s a magical time of new beginnings, revived hope. I remember attending one such swearing-in ceremony the first week of January 1997 in the office of Republican Congressman Ron Paul from Texas, since I had served as his elector in Louisiana’s first district when he ran for President as a Libertarian in 1988, and I had contributed to his campaign and interviewed him for Gold Newsletter in the 1980s.
Being in a small group of people in Ron’s office inspired me to run later that year for the Virginia State House of Delegates as an Independent. It was an exhausting but thrilling process, meeting voters and answering tough questions. I was deep in that campaign when I first partnered with Louis Navellier in launching his first growth stock letter with Phillips Publishing (which became Investorplace), and we have been working together 25 years since then, promoting growth for America as well as growth stocks, since the two are inseparable. You can’t have many growth stocks in a nation without a robust economy.
America enjoyed strong growth, especially among the poorest Americans, in 2018 and 2019, the last pre-COVID years, but that was all scuttled by the “Made in China” bug: 2020 was volatile but +1% overall. Last year was a strong snap-back year with +5.7% GDP growth but this year saw negative GDP in the first half and some tentative growth in the second half for a net gain of maybe +1% by year’s end.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The 118th Congress needs to concentrate on growth rather than the old blame-game of “impeaching” the other side over policy differences. However, if the Senate and minority Party won’t agree to these steps, threats of tit-for-tat hearings might encourage a more peaceful compromise to meet our nation’s needs.
What to do first? I’ll keep this simple and limit a pro-growth agenda to four simple ideas, in this order:
#1: Re-open domestic production of clean fossil fuels. Those dirty old dinosaur bones were once the clean alternative to killing whales for lamp oil or piling up horse manure on city streets. Early fossil fuels created dirty air, but we have learned how to clean up our act. Coal-fired electricity generation is cleaner than ever. In 2020, the Department of Energy issued a report that found, “Coal-fired electricity generation is cleaner than ever. Research shows that a new coal plant with pollution controls reduces nitrogen oxides by 83%, sulfur dioxide by 98%, and particulate matter by 99.8% compared to plants without controls.”
Also, we don’t owe “climate reparations” to nations which are growing rich yet refuse to clean up their air or water. China and India skipped out of the recent COP 27 climate conference in Egypt. They are by far the two biggest polluters on earth. India is growing rich very fast, yet six of the 10 worst air pollution is in the cities of India. Most of the world is using more fossil fuel than ever simply because wind and sun power just can’t meet our modern power needs. (Germany is even burning wood now for home heating.)
Fossil fuels go far beyond gasoline for cars and planes, or warming homes. Think fertilizers, cement and plastics, for starters. Petroleum is a miracle mix. We’ll diversity when other options are commercially viable. Biden’s team will not listen to reason on fossil fuels. It’s up the Republicans to bring balance.
#2: Promote work rather than rewarding idleness. Too many Americans have made a full-time job out of benefit-mining, scouring agencies for a variety of benefits that add up to more than a working wage. Others hide out in their parents’ home or work in the underground economy. For way too long, Congress and many state Governors have rewarded idleness by mailing out weekly checks to able-bodied workers.
The latest jobs report, released November 2, 2022, reported that the labor force participation rate for men 25-54 slid from 89.3% to 88.4% in the last three years. The rate for young men 20-24 fell by 1.7 points.
The federal government mailed out weekly checks of $600 for almost a year, then $300 a week for nine months, to many who were still working. They were called “stimulus” checks, even though many worked from home and couldn’t shop outside the home. Those earning less than $75,000 (or couples earning under $150,000) qualified. A recent Federal Reserve report estimated that in mid-2022, U.S. households had $1.7 of “excess savings,” meanings savings above what they would have had without these benefits.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
There are over 10 million open jobs going begging and 10 million able-bodied Americans not willing to apply for those jobs. That seems like a “growth marriage made in heaven” if Congress promotes WORK!
#3: Allow parents school choice for their children. American schools are a disgrace. I don’t think I need to prove that point overly much. We are way down the list in test scores but somehow #1 in self-esteem about our intelligence. Schools essentially closed for two years due to unscientific scare tactics about childhood susceptibility to COVID, and teachers’ union resistance, and now we have a curriculum based on an agenda far removed from reading, writing and arithmetic and heavy on social grievances.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
We need to open up education to parental choice for the future of our nation’s children and their role in a competitive world, facing millions of superior Asian and European (and now African) children receiving far advanced technical education than we routinely offer in the K-12 curriculum. This can be done via vouchers, but a less cumbersome method is simply school choice, competition, as in any other market.
Former Secretary of Education Betsy Devos covered this policy solution in her book “Hostages No More,” which I will expand upon in next week’s column, on the 10 best Books of the Year for 2022.
#4: Reduce foolish spending and burdensome regulation. This final prescription is admittedly a catch-all generality, not a specific solution, but let’s just stop spending on grandiose plans. In his first month, President Biden called for a $1.9 trillion American Rescue Plan when the economy was already running at full bore (see chart, above). Even his own economists said that plan was excessive and inflationary. That “rescue plan” was merely a massive bailout and reward for blue states that voted for him. Then came $1 trillion for an infrastructure bill, which was a Green New Deal in disguise, according to economist Steve Moore. Then came a $500 billion student loan bailout plan, and similar vote-buying schemes
There is no limit to the imagination of what politicians want to spend, but we need to put them on a diet.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Inflation is Clearly Cooling Off – Hopefully the Fed Notices
Income Mail by Bryan Perry
Identifying Year-End Winners to Lead us into 2023
Growth Mail by Gary Alexander
A Pro-Growth Agenda for the 118th Congress
Global Mail by Ivan Martchev
Gold Has Already Started to Run
Sector Spotlight by Jason Bodner
Look at Volume When Evaluating a Stock’s (or Market’s) Big Move
View Full Archive
Read Past Issues Here
About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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