BlackRock chief executive also said sustainable economic growth of 3% is unlikely
Mr. Fink, who runs the world’s largest asset manager, also called the possibility of sustainable 3% growth unlikely. Part of the challenge the U.S. faces, Mr. Fink said, is demographics. Baby boomers, the largest living generation in the country is aging, reaching retirement age... Mr. Fink said growth between 2.25% and 2.75% was more realistic, noting savings from tax cuts should be channeled into an infrastructure stimulus program... “We’re growing slower than France. That’s really terrible,” he said.
Where Trump Sees Economic ‘Disaster,’ Experts See Something More Complex
To be sure, there are some very real shortcomings that Mr. Trump identified in his campaign. They include minimal pay growth for less-skilled workers, near-record numbers of Americans not in the labor force, and disappearing factory jobs. Still, many mainstream economists say that the Trump agenda — aimed at lowering taxes, peeling back regulations and reopening trade deals — will not alter those trend lines.
“Tax cuts are unlikely to boost labor participation rates, nor will they reverse the aging of the population,” said Michael Gapen, chief United States economist at Barclays. “Less regulation could have a positive impact on long-term growth, but it is unlikely to move the needle over the next two years.”
.. As on many issues, Mr. Trump has sent conflicting signals on this subject, suggesting at times during the campaign that state increases were justified, but warning in primary debates that wages were “too high.”
.. But while the positions Mr. Lawrence is filling are middle-class jobs in Sioux Falls — they start at $45,000 to $50,000 a year, plus benefits — all require a college degree or other technical training.
.. “Stronger growth will help with the low participation rate, but what it’s not going to do is help workers who have been left behind by a lack of education or training,” Mr. Behravesh said.
.. “This is where I have trouble with Trump,” Mr. Behravesh said. “A lot of those manufacturing jobs are gone forever. He is raising expectations, but it’s not going to work. Even if they don’t go to Mexico, a lot of jobs will be automated out of existence.”
.. Mr. Behravesh is looking for the economy to grow by 2.3 percent this year, up from an estimated 1.6 percent annual pace last year. Growth could reach 2.6 percent or higher in 2018, but is very unlikely to hit the target of 4 percent growth that Mr. Trump outlined during the campaign.
The problem with month-over-month growth rates
What all of these charts and their headlines have in common is that they’re trying to convey exponential growth. Since traction is the #1 factor that determines fundraising success, it’s understandable that founders try hard to show exponential growth (which talking about a m/m growth rate implies). This is especially true if you’re one out of 50 startups that present at a “demo day” and you have three minutes to get investors excited. At some of the demo days that I’ve attended, I felt like this led to an arm’s race for the highest growth rates and sometimes made me feel like this:
You can calculate a growth rate of 40% per month on average or a compound monthly growth rate (CMGR) of 35% without having to lie, and you can have Excel draw a trendline using an exponential regression. But I believe this is highly misleading. A more reasonable way of describing this company’s revenue growth would be to say that the company has been adding between $300 and $700 in net new MRR per month in the last ~ 12 months.
.. When you’re talking to investors you of course want to show your numbers in the best possible light, and to say that you’re increasing revenue by $300-700 per month (to use the example from above) may not sound as exciting as a CMGR of 35%. However, keep in mind that experienced investors have very fine-tuned BS antennas, and if an investor gets the impression that you’re getting too creative in your interpretation of your data, that’s a huge turn-off.
.. the problem with an exponential growth assumption is that for early-stage startups it makes short-term goals too easy and longer-term goals too hard
.. The problem with a plan like this is that if you’re at $8000 after month 6 you think you’re on track, but actually you’ve only achieved 1/10th of what you have to achieve in the year.
.. The problem with a plan like this is that if you’re at $8000 after month 6 you think you’re on track, but actually you’ve only achieved 1/10th of what you have to achieve in the year.
Growth Can Solve the Debt Dilemma
Hitting a 3% target would result in an economy that’s nearly $13 trillion larger in 30 years.
But consider what happens to the CBO’s numbers assuming 3% annual growth. By 2040 the economy would expand not to $29.9 trillion, but to $38.3 trillion, according to an analysis by Research Affiliates, a California investment firm. That’s an additional output of $8.4 trillion—roughly the entire annual production today of every state west of the Mississippi River... Many blue-chip economists agree with the CBO that a growth rate of about 2% is the best that America can achieve... But the right policies can counter these trends. Productivity should surge with improvements in robotics, artificial intelligence and automation. Self-driving cars could cut transportation costs dramatically in coming years. Washington could facilitate this renaissance by giving companies an incentive to invest.The Tax Foundation predicted last year that the House Republican tax reform alone would raise wages by 8%, GDP by 9% and capital investment by 28%... at least seven million Americans in their prime working years—18 to 65—would be on the job today if labor-force participation had not dropped since 2000. A strong economy, paired with welfare reforms, could draw millions back to work... And immigration is America’s natural demographic safety valve.