This week, Paul Ryan held a press conference to highlight tax reform initiatives. It didn’t get nearly the attention it deserved. But then, tax policy in general rarely gets the attention it deserves (more on that later). You know what also never gets enough attention? Public policy.
After years of hostility to the notion, the United States appears to be now embracing a move toward more energy independence. The byproducts of that (no pun intended) are just beginning to be felt, which will have far-reaching and positive economic implications for the U.S. beyond energy.
A great article recently appeared in the UK Evening Standard about fracking and the risk not pursuing fracking aggressively presents to the UK. The article, by Anthony Hilton, touches upon an issue that we never talk about enough – the positive mushrooming impact on jobs from energy exploration. It is worth quoting Mr. Hilton at length:
Plainly stated, fracking and horizontal drilling have produced for the US a great economic advantage over Europe and elsewhere. It would be irresponsible to stop. Thankfully, the War on Drilling appears to have ended last November. Let’s hope state governments stay out of the way. . .
I have heard too often in my lifetime that presidential elections aren’t that meaningful because Washington gridlock prevents the U.S. from lurching too far in any direction, which is supposed to be a good thing. I hope the article quoted above can help debunk that idiotic notion. We can think of few things more complementary to economic growth than sound public policy from the Executive branch. Tax policy might be the only thing that matters more.
We will have more on the impact of tax cuts in future posts, but If you are looking for events to cause a sharp pullback in markets, a delay in tax reform, or weaker than expected tax reform, or tax reform being tabled altogether gets our vote as Public Enemy No. 1 for markets.