Monday, August 29, 2016
Ray Keating's New Novel Coming Soon!
Big Announcement! Get ready, the new Pastor Stephen Grant novel by Ray Keating is coming very soon!
Monday, April 18, 2016
Trump’s Huge Recession
by Ray Keating
Way back in 1970, the late Nobel Prize-winning economist
Milton Friedman wrote, “I have been impressed time and again by the
schizophrenic character of many businessmen. They are capable of being
extremely farsighted and clearheaded in matters that are internal to their
businesses. They are incredibly shortsighted and muddleheaded in matters that
are outside their business but affect the possible survival of business in
general.”
This phenomenon has only spread over the past 45-plus years.
We now are constantly berated by corporate executives and high-profile
investors saying things about the economy and public policy that make absolutely
no economic sense. These leaders in business turn out to be economic
illiterates.
Unfortunately, one of these economic illiterate businessmen
just happens to be leading the race for the Republican presidential nomination
in 2016. Of course, I speak of businessman and reality TV star Donald Trump.
It’s not easy figuring out how Trump came to rise and stay
atop the GOP field. But to a significant degree, the Trump train keeps chugging
along due to the fuel of populism. Specifically, Trump has played on or ginned
up people’s fears, in particular, irrational fears of foreigners. After all,
Trump is the guy who is going to fix “bad trade deals,” apparently by imposing
massive tariffs on products from nations with which we run trade deficits, like
Mexico, China and Japan. Trump also plans to create a “deportation
force” to move 11-12 million illegal immigrants out of the nation.
While this might be classic populist politics, it’s also
classically wrongheaded populist economics. Trump misses simple economic facts.
For example, in the U.S., periods of higher economic growth usually
coincide with shrinking trade surpluses or mounting trade deficits, while
economic slowdowns and recessions coincide with declines in trade deficits. The
U.S. trade deficit shrank dramatically during the 2007-2009 recession, declined
during the slowdown and recession in 1990-91, and during the economic woes of
1979 to 1982, the trade deficit not only declined, but shifted to a surplus
during two of those years. Indeed, the surest way to “cure” a trade deficit is
with a recession.
For good measure, the last time the U.S. went down the path
of protectionism, it did not turn out well, to say the least. As a result of
protectionist tariff measures passed in 1921 and 1922, and, most egregiously,
the Smoot-Hawley Tariff Act of 1930, trade declined. Most egregious, the
Smoot-Hawley measure triggered the Great Depression. It took decades for trade
to regain previous levels.
Make no mistake, free trade – that is, reducing governmental
barriers and costs to trade – is a positive for economic growth; for increased
opportunity for U.S. entrepreneurs, small businesses and workers; as well as
for expanding choices and reducing costs for U.S. consumers.
And trade is increasingly important to the U.S. economy. From 2000 to 2015, for example, the growth in
real U.S. exports equaled 22.5 percent of the growth in real GDP, and the
expansion in real total trade (i.e., exports plus imports) came in at 41.6
percent of real GDP growth. Also, consider that in 1950, U.S. exports equaled
4.2 percent of GDP, and imports registered 4 percent, while in 2015, exports
had jumped to 12.6 percent of GDP, and imports to 15.5 percent of the U.S.
economy.
Donald Trump misses
all of this, apparently.
As for immigration, few disagree that the current system,
which allowed for 11-12 million people to be in the nation illegally, needs to
be fixed. Indeed, respect for the rule of law demands immigration reform. At
the same time, it must be recognized that most immigrants – both legal and illegal
– come to this nation seeking a better life, and they contribute as workers,
business owners and consumers. For good measure, immigrants also benefit the
economy by overwhelmingly doing work that is complementary to the native born.
Given these economic realities, the Trump agenda of tariffs
and deportation would inflict serious harm on the U.S. economy.
On trade, American Action Forum, a free enterprise group,
has estimated
that Trump’s plan for imposing significant tariffs on imports from China and
Mexico would hit U.S. consumers with $250 billion in annual costs.
For good measure, the U.S. Chamber of Commerce has
projected that the Trump tariffs on China and Mexico would bring about a
significant recession: “The U.S. recession would set in within the first year
under Trump’s proposed
trade policies, which include a 35 percent tariff on imports from Mexico
and a 45 percent tax on goods coming in from China. Over the next three years,
the U.S. economy would shrink by 4.6 percent and the unemployment rate would
nearly double to 9.5 percent.”
As for the Trump – as well as Senator Ted Cruz – deportation
agenda, the story for the economy gets even worse. The American Action Forum offers
the following points and estimates:
• To deport all illegal immigrants in the nation in two
years, as Trump proposes, the federal taxpayer costs would be massive. These
would include federal immigration
apprehension personnel increasing from 4,844 positions to 90,582 positions;
the number of immigration detention
beds jumping from 34,000 to 348,831; immigration courts rising from 58 to 1,316; and the number of federal attorneys legally
processing undocumented immigrants increasing from 1,430 to 32,445.
• As for the economic costs, they are even more frightening.
AAF reports: “The result is a sudden and deep recession similar to what the
United States recently experienced during the Great Recession. Let’s say that
full immigration enforcement starts at the beginning of 2017 and the U.S.
government successfully removes all undocumented immigrants by the end of 2018.
At the end of 2018, the labor force would be 6.4 percent smaller than if the
government had not removed those immigrants. Relative to CBO baseline
projections, the labor force would decrease by 10.3 million workers. As a
result, the labor force would fall to its lowest level since 2006. In addition,
the labor force participation rate would fall from about 62.3 percent to 60.7
percent, the lowest level since the 1970s. The steep decline in the labor force
would cause the economy to decline sharply. At the end of 2018, the economy
would be 5.7 percent smaller than it would be if the government did not remove
all undocumented immigrants. For purposes of comparison, note that the decline
in real GDP during the Great Recession was quite similar – 6.3 percent. This
suggests that real GDP would be about $1 trillion lower in 2018 than CBO’s
baseline estimate, wiping out all economic growth that would have occurred
during the previous three years.”
The most likely outcome of the Trump tariff and deportation
agenda? A huge recession.
None of this should be surprising to anyone who understands
the economics and history of both trade and immigration.
But maybe Trump has an excuse. After all, his business
career seems to be best known for four high-profile business bankruptcies in a
span of 18 years. Milton Friedman was bewildered by businessmen being
“farsighted and clearheaded” in their own businesses but “shortsighted and
muddleheaded” on matters outside their business. It can be argued that Trump is
shortsighted and muddleheaded on matters both inside and outside his
businesses.
______________
Mr. Keating is an
economist and novelist who writes on a wide range of topics. His Pastor Stephen
Grant novels have received considerable acclaim, including The River: A Pastor
Stephen Grant Novel being a finalist for KFUO radio’s Book of the Year 2014,
and Murderer’s Row: A Pastor Stephen Grant Novel winning Book of the Year 2015.
The Pastor Stephen
Grant Novels are available at Amazon…
Wednesday, April 6, 2016
What's Being Said About Ray Keating's Thrillers?
A Lutheran pastor, former CIA, and onetime Navy SEAL stands
at the heart of Ray Keating’s exciting and thoughtful Pastor Stephen Grant
novels.
Not only does the host of KFUO radio’s BookTalk call Keating
“a great novelist,” but Keating’s latest thriller, MURDERER’S ROW: A PASTOR
STEPHEN GRANT NOVEL, was named KFUO’s “Book of the Year 2015.” And Kirkus
Reviews says, “Action fans will find plenty to love here, from gunfights and
murder sprees to moral dilemmas.”
For good measure, THE RIVER: A PASTOR STEPHEN GRANT NOVEL
was a “Book of the Year” finalist in 2014. Regarding THE RIVER, Kirkus Reviews
declares, “A gritty, action-stuffed,
well-considered thriller with a gun-toting clergyman.”
There’s much more, including…
• From a Washington
Times review of THE RIVER written by a pastor and former CIA officer: “What
Ian Fleming's 007 series has probably done for ex-MI-6 agents and Tom Clancy
has done for retired CIA officers, Mr. Keating has done for the minority of
former CIA agents who have served their country by working in the intelligence
community, but now wish to serve God.”
• A Touchstone magazine review of MURDERER’S ROW says: “This
is a fun read, though the embedded theology is real and salutary. There is
death and life, adultery and commitment, friendship and betrayal, violence and
victory over violence… Perhaps the best part of the book for the reviewer is
that the clergy are good at helping people bring Christ into their vocations.”
• Marvin Olasky,
editor-in-chief of WORLD magazine,
lists Ray Keating among his top 10 Christian novelists. WARRIOR MONK also
ranked as a Top 10 book on a WORLD magazine June 2013 list.
• On WARRIOR MONK, an Amazon reviewer observed, “Most Christian fiction leaves a lot to be desired.
This book will appeal to non-Christians as well. Warrior Monk is about real
people with real desires, emotions and feelings. I am anxious to read the other
books in the series. Readers won't be disappointed.”
• And Lutheran Book Review says: “I miss Tom Clancy. Keating
fills that void for me.”
Get all five of Keating’s
thrillers – MURDERER’S ROW, THE RIVER, AN ADVENT FOR RELIGIOUS LIBERTY, ROOT OF
ALL EVIL? and WARRIOR MONK – at Amazon in paperback or for the Kindle.
Friday, April 1, 2016
Trump, Clinton and Sanders: Welcome to New York, America
by Ray Keating
For some bizarre reason, I’ve chosen to live my entire life
in loopy New York. From a political standpoint, that has meant suffering under
a one-party system. This New York reality is now spreading across the nation in
the current presidential race.
Hillary Clinton, former U.S. senator from New York, squares
off with Bernie Sanders, originally from New York, on the Democrat side, and
New York City businessman and reality TV star Donald Trump leads among Republicans.
But what do I mean by this “one party” comment? Yes, New
York is a deep blue state, but there are Republicans in the state. In fact,
Republicans still have effective control of the state senate – barely. The
problem is that both parties, for the most part, are Democrats.
The New York Democratic Party ranks among the most hard core
of Democrats. They are unabashedly left wing, whether on economic matters or
social issues.
Meanwhile, New York Republicans amount to little more than
Democrat-Lite. They love big government; are a mixed bag, at best, on most
social issues; and are far too interested in pandering to keep some sliver of power.
Notions that Republicans should be principled in any way, and work to change hearts
and minds on the issues, are treated as an absurdity. Sure, there’s a real
conservative here and there in New York, but they are the exceptions. There’s a
reason why New York has a Conservative Party. It was created in 1962 to serve
as a conservative check on the Republicans, and that need has not gone away for
more than a past half-century. Apparently, few Republican Party leaders grasp
the idea that if voters have a choice between Democrats and Democrat-Lite,
they’re more likely to choose the real thing. And hence, the long decline of
Republicans in New York.
Welcome to New York, America.
Turning to the current presidential campaign, the Clintons,
of course, chose to move to New York as this Democrat state would give her an
excellent shot at winning a U.S. Senate seat. In her 2000 victory, Mrs. Clinton
was helped by the fact that Republicans made a complete mess of matters, with
Rudy Giuliani dropping out of the race and being replaced by Congressman Rick
Lazio, who ran an inept campaign.
Of course, Clinton is an unabashed liberal on nearly every
issue imaginable, from abortion to taxes to foreign policy, and beyond. That’s
no secret.
Meanwhile, Senator Bernie Sanders, a New Yorker for the
first 27 years of his life before moving to Vermont in 1968, manages to stake
out ground to the left of Clinton. That’s not easy. But, heck, the guy warmly
embraces the socialist label. What else needs to be said?
Welcome to New York, America.
And then there’s Donald Trump. Given his flip-flopping on
nearly every major issue, his being devoid of any principles, and his willingness
to say just about anything to gain power, along with an inability to think and
express himself clearly on issues, Trump rather nicely fits the New York
Republican model.
Welcome to New York, America.
In fact, America has become New York. The Democrats serve up
radical Lefties. The current leader among Republicans lacks any kind of
commitment to or understanding of conservatism and conservative policies.
Funny, I thought New York long ago no longer mattered when
it came to national politics. Silly me.
______________
Mr. Keating is an
economist and novelist who writes on a wide range of topics. His Pastor Stephen
Grant novels have received considerable acclaim, including The River: A Pastor
Stephen Grant Novel being a finalist for KFUO radio’s Book of the Year 2014,
and Murderer’s Row: A Pastor Stephen Grant Novel winning Book of the Year 2015.
The Pastor Stephen
Grant Novels are available at Amazon…
Thursday, March 31, 2016
Throwback Thursday: Creators, Conspirators and Monopolists, Oh My!
by Ray Keating
Prominent businessmen
don’t always understand how the economy actually works. That’s been evident on
the presidential campaign trail this year, with Donald Trump leading the
Republican field and Michael Bloomberg’s brief flirtation with jumping into the
race as an independent. Trump and Bloomberg clearly are clueless on a host of
issues – such as Trump on trade – regarding how the economy functions and how
policy impacts the economy. But, of course, there are many business leaders who
understand how the economy works, and even offer some rather unique insights.
That’s the case with Peter Thiel and his book “Zero to One: Notes on Startups,
or How to Build the Future.” The following review ran as a Long Island Business
News column of mine in October 2014 …
I recently headed west to Silicon Valley for a gathering
focused on technology policies. At the start of that journey, standing in an
airport bookstore, I decided to get the full Silicon Valley techie experience,
and picked up Peter Thiel’s new
book “Zero to One: Notes on Startups, or How to Build the Future.”
It’s a valuable, quick read that provides fascinating insights
on thinking about entrepreneurship and the economy, and what’s needed to start
up a business.
Thiel was a co-founder of PayPal, and has been an investor
in a variety of startups, including Facebook. His perspectives on how
businesses function in the economy are drenched in a refreshing economic
reality.
The central theme of Thiel’s message is the need to create
new things. He points out, “Doing what we already know how to do takes the
world from 1 to n, adding more of
something familiar. But every time we create something new, we go from 0 to 1.”
He warns, “Unless they invest in the difficult task of creating new things,
American companies will fail in the future no matter how big their profits
remain today.”
One would expect Thiel to declare that the word for “0 to 1
progress is technology.” However, he
quickly adds that it’s not all about computers: “Properly understood, any new
and better way of doing things is technology.” Another word for that is
innovation.
For Thiel, building the future and creating new things is
accomplished by monopolies. What? How can that be? Well, he has a better grasp
on how the economy actually works than many economists. Thiel correctly rejects
the concept of “perfect competition” that is taught in all Economics 101 classes,
whereby undifferentiated firms and homogeneous products sell at the market
price, and economic profits are competed away. That’s not how the economy
works, nor quite frankly, does it help students to understand the market
process.
But what about this monopoly thing? Thiel writes: “To an
economist, every monopoly looks the same, whether it deviously eliminates its
rivals, secures a license from the state, or innovates its way to the top. In
this book, we’re not interested in illegal bullies or government favorites; by
‘monopoly,’ we mean the kind of company that’s so good at what it does that no
other firm can offer a close substitute.”
While he does not put it exactly this way, what
entrepreneurs and businesses are doing within a competitive environment is
investing and innovating to create what effectively are temporary monopolies
that allow profits to be maximized. And the longer a firm excels at providing
something that consumers cannot get elsewhere, the longer the business can
maintain that temporary monopoly. That’s quite different from the
government-protected or created monopoly, for example, that grows fat, lazy and
rips off consumers.
As Thiel proclaims, “Creative monopolists give customers more choices by adding entirely new
categories of abundance to the world.”
Thiel’s subsequent advise and ideas for those looking to
start up new businesses spring from this basic understanding of what
entrepreneurs and businesses need to do – that is, to create something new and
better – if they seek bold success. And he offers many valuable insights on
that process. But among my favorite bits of wisdom tie in to how to think about
business and career – one has to do with chance and the other secrets.
On business success being all about chance, Thiel counters
that if that were the case, we would not see the successful serial
entrepreneurs that we obviously do. He adds: “Learning about startups is
worthless if you’re just reading stories about people who won the lottery.”
And on creative secrets, he provocatively but accurately
writes, “The best entrepreneurs know this: every great business is built around
a secret that’s hidden from the outside. A great company is a conspiracy to
change the world; when you share your secret, the recipient becomes a fellow
conspirator.”
So, here’s to those creative, conspiratorial monopolists who
change the world.
______________
Mr. Keating is an
economist and novelist who writes on a wide range of topics. His Pastor Stephen
Grant novels have received considerable acclaim, including The River: A Pastor
Stephen Grant Novel being a finalist for KFUO radio’s Book of the Year 2014,
and Murderer’s Row: A Pastor Stephen Grant Novel winning Book of the Year 2015.
The Pastor Stephen
Grant Novels are available at Amazon…
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