High Frequency Economics’ chief economist Carl Weinberg sat down with Business Insider CEO Henry Blodget on this week’s episode of The Bottom Line. Weinberg says we don’t have enough workers to get to 3% growth. Following is a transcript of the video.
Weinberg: The stock market says the consensus still believes that a Trump presidency is a pro-business presidency. But we’re only four months into it and we still have yet to see the deliverables that he promised us. He promised a stripping down of regulation. He promised the change in health care. He promised tax cuts. He promised the whole bunch of infrastructure spending and so far none of that has come to happen. So for the moment, Wall Street is still believing that the president will deliver the economic promises. The treasury secretary is talking about 3% plus GDP growth. So to that to that extent, I think that you know Wall Street is still hoping that it works out.
Blodget: And you mentioned the 3%. Is that a realistic number? Because when President Trump came out with his budget lots of folks seem to say that’s a big stretch.
Weinberg: I got to say, I think it is a really big stretch. You know, I mean it’s nice to say we’re going to do it but if you’re going to reduce the workforce by reducing immigration and by throwing out workers who are over the here. We just don’t have enough people in the economy to grow it that fast, to grow the economy that fast without running out of workers. And we already see that happening. We’re down below the level of full employment that the Fed tells us is as low as we can go without triggering wage increases. Our labour force is growing at only about 1% per year and our employment is rising at one and a half per cent per year.
So even though the GDP growth headline is not that high, the economy is delivering jobs for people and at a faster rate than we’re delivering people to work in the economy. Something has to give.
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