President Obama's regulatory policies and poor economic incentives
have cost the U.S. economy approximately $1.7 trillion of GDP per
year, according to
Investor's Business Daily editors.
"Put in simple terms, President Obama has presided over an
unprecedented regulatory siege that has strangled the economy and
discouraged entrepreneurship," they write in an editorial.
The editors cite a
Competitive Enterprise Institute study showing
that Americans paid $1.9 trillion last year to comply with
Obamacare, EPA limits on carbon dioxide emissions, energy
restrictions and all the government's other regulations.
"At some point, we hope average Americans will stop believing the
mistruths pushed by liberal politicians and their media allies and
demand pro-growth policies based on low taxes, few regulations,
stable money and free trade — the one policy mix that always works,"
the editorial states.
The president likes to put the blame on Wall Street, the editors
say. "But Obama's sweeping indictment of the financial advisory
industry sounds like another 'us against them' assault on wealth and
investment."
As for the economy as a whole, with growth totaling 2.4 percent last
year, the fastest rate since 2010, and major stock indices
continually hitting record highs, enthusiasm is running rampant
among many investors.
But, "high degrees of certainty can be dangerous,"
Peter Schiff, CEO of Euro Pacific Capital, writes in a
weekly commentary.
"Herd mentality can cause investors to chase returns and pile into
positions that may already be overvalued. But herds can be spooked.
. . . When that occurs, those who resisted the herd may find
themselves rewarded. We believe that we are approaching such a
point."
As for the economy, Schiff notes that GDP growth decelerated to 2.2
percent in the fourth quarter from 5 percent in the third. And
several economic indicators, including consumer spending, have shown
weakness in recent weeks.
As for stocks, Robert Shiller's cyclically adjusted price-earnings
(CAPE) ratio, which encompasses 10 years of earnings, shows the
market is overvalued, Schiff says. The CAPE ratio for the S&P 500
stands at 27.9.
So where should investors turn? Gold mining and energy stocks,
Schiff says. "The good news is that unloved assets may be
attractively priced."
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