Cartoon businessman running away to avoid paying taxes. (Photo: AdobeStock/PPD/Adiano)
According to Freedom in the 50 States, which we reviewed a couple of days ago, New Jersey is in the bottom 10 and has been moving in the wrong direction.
In a perverse way, I admire New Jersey’s politicians. They’re not satisfied with the state’s low scores. They want to become even less competitive. If that’s even possible.
As I noted in the interview, the latest proposal for a “rain tax” isn’t necessarily objectionable if examined in isolation.
Consider what happened recently with the gas tax, as explained by the Wall Street Journal.
…a silver lining used to be the Garden State’s relatively low gasoline tax of 14.5 cents a gallon—second lowest in the U.S. No more, and therein lies a tale of why taxing the rich to finance government is an illusion. In October 2016, then-Gov. Chris Christie signed a bill raising the gas tax by 22.6 cents to 37.1 cents a gallon…the bill also included a clause that automatically raises the gas tax if it doesn’t produce the expected revenue each year. This is a self-fulfilling economic prophesy. A higher gas tax causes people to drive less, which in turn has meant that revenues have fallen short of the expected $2 billion target. So on Oct. 1 the gas tax will rise another 4.3 cents to 41.4 cents per gallon, which will be the ninth highest in the U.S. …This will be the state’s third tax increase in four months, following June’s increase in income and corporate tax rates. …The larger lesson is that sooner or later the middle class always gets the bill for bigger government. Higher income and corporate taxes drive the affluent out of the state, which means less revenue. That leaves the middle class to pay in higher sales, property and now gasoline taxes.
Gov. Phil Murphy said Wednesday he may propose new tax increases when he unveils his budget in March, saying he’s worried that the state has not done enough to achieve what he called “tax fairness.” …The governor…had sought some $1.7 billion in new taxes… Murphy was met with fierce resistance from fellow Democrats in the Legislature… Murphy ultimately agreed to…$1.6 billion in annual revenue. …Murphy, speaking at a church in Newark where he delivered a speech on his first-year accomplishments, said he needs to leave his options open as he starts to prepare a budget… “I would say everything is on the table. Period, full stop,” he added when pressed again about the idea of new tax increases.
If all this sound worrisome, that’s because it is.
And that means the full burden of those taxes is now much more explicit, which means more and more taxpayers in high tax rates are going to “vote with their feet” and move to states with less onerous fiscal regimes.
In other words, New Jersey politicians are making their tax system worse at precisely the moment that the geese with the golden eggs have more incentive to fly away.
“A Week in Politics Is a Long Time” — Former British Prime Minister Harold Wilson
Stacey Abrams, left, Alexandria Ocasio-Cortez, center, Ralph Northam, right, graphic depiction.
If the cagey former British Prime Minister Harold Wilson were alive today, and viewed the last week’s disasters for the Democratic Party, he might have changed his aphorism to “a month is a long time in politics.” What transpires in a week is not normally repeated over four.
Wilson’s statement is absolutely prescient.
After their triumph or their opponent’s disaster, a political organization or person can seemingly be on top of the world, untouchable. Then, some unexpected event happens, and positions reverse. This is quite normal in the ebb and flow of political life and, after a media beat up, the prior status quo is restored in due course, until the next event.
But what has happened to the Democratic Party, beggars belief. Is has been one catastrophic miasma after another, some so bizarre there is no precedent.
Take Virginia.
When was the last time a ruling party’s entire administration found itself mired not just in scandal, but scandal of such pyrotechnic proportion?
Bearing in mind the need for some degree of brevity, I will attempt to cover the main acts and actors in this frankly preposterous political drama. That’s not to discount the seriousness of these scandals, as the protagonists have a very real impact on the offended parties.
Democrats were riding high after the partial government shutdown, with their side crowing that President Donald Trump had “caved” and the outlook was bleak for the GOP.
Where are we now? Who knows what more is to come?
It began out of nowhere with Virginia Governor Ralph Northam being exposed as having a blackface page complete with a KKK figure in his medical class yearbook. After a poorly received press conference, in which Northam bizarrely admitted he “Moonwalked in blackface,” the calls for his resignation came fast and hard from everywhere and everyone.
But he refused and continues to refuse to resign.
Then, just as progressives were gleeful over Lt. Governor Justin Fairfax becoming the “new face of the Democratic Party” and governor of Virginia, he was accused of sexual assault.
Then, Attorney General Mark Herring — the man who follows Lt. Gov. Fairfax in line for governor, and who called on Mr. Northam to resign — admitted he too had appeared in blackface. None of these men have resigned, opting instead to show the most hypocritical disregard for their own supposed leftist values.
Why?
Because House of Delegates Speaker Kirk Cox — the fourth man in line to be governor — is a Republican. All this was analyzed by, of all places and people, The Washington Post and CNN’s Chris Cillizza.
The story continues to have as many legs as a centipede.
Rep. Bobby Scott, D-Va., who has served the Third Congressional District since 1993, knew about the allegations against Lt. Gov. Fairfax “more than a year ago.”
North Carolina Democratic Governor Roy Cooper’s yearbook showed up depicting a horrific “lynching,” though fortunately for him not ascribed directly to the governor.
But the day didn’t end so well, regardless. Gov. Cooper’s pick for Human Relations Commission was forced to withdraw from the nomination after bizarre statements about 9/11 surfaced, alongside an anti-police rant.
All this Virginia drama commenced, with the God of Karma watching, when Democrat Kathy Tran introduced an extreme abortion bill, which was attacked as mercilessly allowing the killing of a newborn child.
Karma looked on.
The bill was defeated and the Northam and Co. scandal ensued after an incensed person brought the yearbook to the media’s attention.
The Virginia-related disasters alone would suffice to knock any party back on their heels. But the week was not done with the Democratic Party, not by a long shot.
Elizabeth Warren had her application for registration with the Texas State Bar published, on which she wrote in her own handwriting that she was Native American. This revelation came after she was forced to issue an apology to the Cherokee Nation.
Other expected or potential 2020 Democratic candidates had their troubles.
Bernie Sanders came under media attack for allegations of sexual harassment involving his 2016 campaign. Senator Amy Klobuchar, D-Minn., had the dubious distinction of being touted by erstwhile Republic relic George Will, and then an expose came out stating people wouldn’t work with her campaign because of her attitude.
The Democratic Party of Minnesota lost a special election for a state Senate seat, which had been held in the same family for three generations and for over 20 years. It was a 9-point swing to the Republican Party.
An analysis by Optimus showed that leading Democratic 2020 nominees would be badly affected by an independent run by Howard Schultz, despite seemingly endless attacks on him by the liberal media. The progressive darling Alexandria Ocasio-Cortez followed up her 70-percent tax proposal with the launch of her “Green New Deal.” It calls for a car-less, airplane-less, cow fart future in which people who don’t want to work will be paid not to work.
It earned the endorsement of Senator Kamala Harris, D-Calif., who has clearly emerged as the party and media favorite to take on President Donald Trump in 2020.
She may just come to rue the day.
On the Republican side, President Trump delivered a widely-acclaimed State of the Union Address, which received viewer approval exceeding 70% in two snap polls, including 30% among Democrats.
Liberal U.S. Supreme Court Justice Ruth Bader Ginsburg, was a no-show.
The address stood in contrast to the poorly-received identity politics rebuttal by Georgia House Minority Leader Stacy Abrams, which she delivered having not even heard or read President Trump’s address.
Worth noting, President Trump’s approval in the Rasmussen Reports daily tracking poll has risen to 49%, the highest since May 2018.
Now, given the Wilson stricture, it may well be the GOP’s turn to have a bad week next week. But given the horrific nature of the Democratic Party’s disastrous week, it will have to be an astounding series of events to come anywhere near matching the aforementioned tale of political horrors.
And since I’m a big fan of sensible tax policy and the Laffer Curve, we’re going to share Mark’s new chart looking at the inverse relationship between the top tax rate and the share of taxes paid by the richest Americans.
Examining the chart, it quickly becomes evident that upper-income taxpayers started paying a much greater share of the tax burden after the Reagan tax cuts.
My left-leaning friends sometimes look at this data and complain that the rich are paying more of the tax burden only because they have grabbed a larger share of national income. And this means we should impose punitive tax rates.
But this argument is flawed for three reasons.
First, there is not a fixed amount of income. The success of a rich entrepreneur does not mean less income for the rest of us. Instead, it’s quite likely that all of us are better off because the entrepreneur created some product of service that we value. Indeed, data from the Census Bureau confirms that all income classes tend to rise and fall simultaneously.
Second, it’s not even accurate to say that the rich are getting richer faster than the poor are getting richer.
Third, one of the big fiscal lessons of the 1980s is that punitive tax rates on upper-income taxpayers backfire because investors, entrepreneurs, and business owners will choose to earn and report less taxable income.
For my contribution to this discussion, I want to elaborate on this final point.
When I give speeches, I sometimes discover that audiences don’t understand why rich taxpayers can easily control the amount of their taxable income.
And I greatly sympathize since I didn’t appreciate this point earlier in my career.
That’s because the vast majority of us get the lion’s share of our income from our employers. And when we get this so-called W-2 income, we don’t have much control over how much tax we pay. And we assume that this must be true for others.
But rich people are different. If you go the IRS’s Statistics of Income website and click on the latest data in Table 1.4, you’ll find that wages and salaries are only a small fraction of the income earned by wealthy taxpayers.
These high-income taxpayers may be tempting targets for Alexandria Ocasio-Cortez, Elizabeth Warren, Bernie Sanders and the other peddlers of resentment, but they’re also very elusive targets.
When tax rates are low, this type of tax planning doesn’t make much sense. But as tax rates increase, rich people have an ever-growing incentive to reduce their taxable income and that creates a bonanza for lawyers, accountants, and financial planners.
But there’s never been a good source if you want to know which local jurisdiction is best.
Dean Stansel of Southern Methodist University is helping to fill this gap with a report looking at the relative quality of government policy in various metropolitan statistical areas (MSAs encompass not just a city, but also economically relevant suburbs).
…the level of economic freedom can vary across subnational jurisdictions within the same country (e.g., Texas and Florida have less-burdensome economic policies and therefore much greater economic freedom than New York and California). However, levels of economic freedom can also vary within those subnational jurisdictions. For example, the San Jose metro area has substantially higher economic freedom than Los Angeles. The same is true for Nashville compared to Memphis. In some places, metropolitan areas straddle state borders, skewing state-level economic data. This report quantifies those intra-state disparities by providing a local-level version of the EFNA, ranking 382 metropolitan areas by their economic freedom levels.
So who wins this contest?
Here are the five most-free MSAs. It’s worth noting that all of them are in states with no income tax, which shows that good state policy helps.
What if we limit ourselves to large cities?
Here are the five most-free MSAs with population over 1 million. As you can see, Houston is in first place and zero-income-tax Texas and Florida are well represented.
Now let’s shift to the localities on the bottom of the rankings.
Which MSA is the worst place for economic freedom in America?
Congratulations to El Centro in California for winning this booby prize. As you can see, jurisdictions in New York and California dominate.
What if we look are larger jurisdictions, those with over 1 million people?
In this case, Riverside-San Bernardino-Ontario is the worst place to live.
Though if you want to focus on big cities, the NYC metro area deserves special mention.
Now let’s consider why economic freedom matters.
I’ve shared charts showing how more economic freedom leads to more prosperity in nations.
So you shouldn’t be surprised to discover that it also is true for metro areas.
Last but not least, here’s a map showing freedom in all MSAs.
I’m not surprised to see so much red in California and New York, but I didn’t realize that Ohio (thanks for nothing, Kasich), Oregon, and West Virginia were so bad.
And the good results for Texas and Florida are predictable, but I didn’t think Virginia would look so good.
Trump, McConnell Continue to Overhaul the U.S. Courts of Appeals
William “Bill” Barr served as the 77th Attorney General of the United States and was nominated to serve as the nation’s top cop again by President Donald Trump on December 7, 2018.
The Senate Judiciary Committee convened at 10:00 AM EST Thursday to consider the nomination of William Barr for U.S. Attorney General, 44 judicial nominees and Donald W. Washington for Director of the U.S. Marshals Service.
UPDATE: The Senate Judiciary Committee voted 12 to 10 to advance the nomination of William “Bill” Barr for U.S. Attorney General to the floor of the U.S. Senate. The nomination will be reported favorably, and the full chamber is expected to confirm the nomination. The other nominees were also reported favorably on party line votes.
On December 7, 2018, President Donald J. Trump announced that he would nominate Mr. Barr to replace Jeff Sessions. The president’s nominee for top cop served as the 77th U.S. Attorney General from 1991 to 1993, under George H.W. Bush.
As People’s Pundit Daily (PPD) previously reported, he was supported by both Republicans and Democrats on the Senate Judiciary Committee. The committee, which is now led by Chairman Lindsey Graham, R-S.C., approved his previous nomination unanimously by a vote of 14 to 0.
He was confirmed by voice vote by the full U.S. Senate just 36 days after the nomination was announced, and was sworn in as Attorney General on November 26, 1991.
But now that he has been nominated by President Trump, Democrats on the committee and in the U.S. Senate at-large are largely opposing his nomination.
That includes Senator Sherrod Brown, R-Oh., who is expected to announce whether he intends to run for President of the United States in 2020.
“No one who has already tried to influence the Mueller investigation can be impartial – and the United States needs an impartial Attorney General,” Senator Brown tweeted. “The Senate Judiciary Committee must oppose William Barr’s nomination today.”
No one who has already tried to influence the Mueller investigation can be impartial – and the United States needs an impartial Attorney General. The Senate Judiciary Committee must oppose William Barr’s nomination today.
There are 13 appellate courts that sit below the U.S. Supreme Court, the U.S. Courts of Appeals. The nation’s second-highest court will hear controversial cases on immigration, abortion, religious freedom, and other issues that will have a significant impact on public policy and the president’s legacy.
The 94 federal judicial districts are organized into 12 regional circuits, each of which has a court of appeals. The 13th is the Court of Appeals for the Federal Circuit, which has nationwide jurisdiction to hear appeals in specialized cases.
Worth noting, 6 of the 40 judicial nominees being considered are for circuit judgeships. That includes Bridget S. Bade for the Ninth Circuit, Paul B. Matey for the Third Circuit, Eric D. Miller for the Ninth Circuit, Eric E. Murphy for the Sixth Circuit, Chad A. Readler for the Sixth Circuit, and Allison Jones Rushing for the Fourth Circuit.
The remaining 34 nominees under consideration are for one of the 94 federal judicial districts.
As PPD has also reported, President Trump and Senate Majority Leader Mitch McConnell, R-Kty., have been reshaping these federal courts.
On December 14, 2017, President Trump and Leader McConnell set a record for the most federal appeals judges confirmed during the first year of a presidency. The U.S. Senate confirmed the 12th nominee that day, breaking the previous record held jointly by Presidents Richard M. Nixon and John F. Kennedy.
In August 2018, the U.S. Senate confirmed the nominations of Julius Ness Richardson (81 – 8) and A. Marvin Quattlebaum Jr. (62 – 28), both for the U.S. Court of Appeals for the Fourth Circuit.
With those two confirmations, the president and Republican-controlled upper chamber had pushed through 26 federal appeals court judge confirmations.
It was two more than the previous year’s record and the highest number ever for a second-year presidency.
There are 179 judgeships for the U.S. Courts of Appeals. Meaning, those 26 appointments had already accounted for roughly 15%.
Only 11 vacancies remain to be filled on the U.S. Courts of Appeals. If President Trump’s nominees are confirmed, his administration could have reshaped as much as 21% of the nation’s second highest court.
Bridget S. Bade, to be United States Circuit Judge for the Ninth Circuit
Paul B. Matey, to be United States Circuit Judge for the Third Circuit
Eric D. Miller, to be United States Circuit Judge for the Ninth Circuit
Eric E. Murphy, to be United States Circuit Judge for the Sixth Circuit
Chad A. Readler, to be United States Circuit Judge for the Sixth Circuit
Allison Jones Rushing, to be United States Circuit Judge for the Fourth Circuit
Rossie David Alston, Jr., to be United States District Judge for the Eastern District of Virginia
Roy Kalman Altman, to be United States District Judge for the Southern District of Florida
Raul M. Arias-Marxuach, to be United States District Judge for the District of Puerto Rico
Thomas P. Barber, to be United States District Judge for the Middle District of Florida
J. Campbell Barker, to be United States District Judge for the Eastern District of Texas
Pamela A. Barker, to be United States District Judge for the Northern District of Ohio
Kenneth D. Bell, to be United States District Judge for the Western District of North Carolina
Wendy Williams Berger, to be United States District Judge for the Middle District of Florida
Jean-Paul Boulee, to be United States District Judge for the Northern District of Georgia
Holly A. Brady, to be United States District Judge for the Northern District of Indiana
Andrew Lynn Brasher, to be United States District Judge for the Middle District of Alabama
Brian C. Buescher, to be United States District Judge for the District of Nebraska
James David Cain, Jr., to be United States District Judge for the Western District of Louisiana
Stephen R. Clark, Sr., to be United States District Judge for the Eastern District of Missouri
Clifton L. Corker, to be United States District Judge for the Eastern District of Tennessee
Daniel Desmond Domenico, to be United States District Judge for the District of Colorado
Karin J. Immergut, to be United States District Judge for the District of Oregon
Matthew J. Kacsmaryk, to be United States District Judge for the Northern District of Texas
Damon Ray Leichty, to be United States District Judge for the Northern District of Indiana
Corey Landon Maze, to be United States District Judge for the Northern District of Alabama
David Steven Morales, to be United States District Judge for the Southern District of Texas
Sarah Daggett Morrison, to be United States District Judge for the Southern District of Ohio
Carl J. Nichols, to be United States District Judge for the District of Columbia
Howard C. Nielson, Jr., to be United States District Judge for the District of Utah
J. Nicholas Ranjan, to be United States District Judge for the Western District of Pennsylvania
Rodolfo Armando Ruiz II, to be United States District Judge for the Southern District of Florida
Rodney Smith, to be United States District Judge for the Southern District of Florida
Michael J. Truncale, to be United States District Judge for the Eastern District of Texas
Wendy Vitter, to be United States District Judge for the Eastern District of Louisiana
T. Kent Wetherell II, to be United States District Judge for the Northern District of Florida
Allen Cothrel Winsor, to be United States District Judge for the Northern District of Florida
Joshua Wolson, to be United States District Judge for the Eastern District of Pennsylvania
Patrick R. Wyrick, to be United States District Judge for the Western District of Oklahoma
John Milton Younge, to be United States District Judge for the Eastern District of Pennsylvania
M. Miller Baker, to be a Judge of the United States Court of International Trade
Richard A. Hertling, to be a Judge of the United States Court of Federal Claims
Ryan T. Holte, to be a Judge of the United States Court of Federal Claims
Timothy M. Reif, to be a Judge of the United States Court of International Trade
U.S. jobless claims graph on a tablet screen. (Photo: AdobeStock)
Initial jobless claims fell 19,000 to a seasonally adjusted 234,000 for the week ending February 2, though remained higher-than-expected.
Forecasts ranged from 220,000 to 235,000, with the consensus coming in at 223,000.
The 4-week moving average rose 4,500 to 224,750, up from the previous week’s unrevised average of 220,250. That’s largely due to the previous week’s impacted by the partial government shutdown.
In all likelihood, it will be temporary.
The advance seasonally adjusted insured unemployment rate remained unchanged at a very low 1.2% for the week ending January 26.
The advance number for seasonally adjusted insured unemployment declined by 42,000 for the week ending January 26, down to 1,736,000. The previous week’s level was revised down by 4,000 from 1,782,000 to 1,778,000.
The 4-week moving average increased 4,250 to 1,741,250, also the result of the partial government shutdown. The previous week was revised down by 750 from 1,737,750 to 1,737,000.
No state was triggered “on” the Extended Benefits program during the week ending January 19.
The highest insured unemployment rates in the week ending January 19 were in Alaska (3.5), New Jersey (2.7), Connecticut (2.5), Montana (2.5), Pennsylvania (2.4), Rhode Island (2.4), California (2.3), Massachusetts (2.3), Illinois (2.2), Michigan (2.1), Minnesota (2.1), and West Virginia (2.1).
The largest increases in initial claims for the week ending January 26 were in California (+8,042), New Jersey (+940), Iowa (+601), Wisconsin (+570), and Minnesota (+37), while the largest decreases were in Texas (-4,974), Ohio (-3,523), New York (-1,970), Georgia (-1,873), and Pennsylvania (-1,186).
On this episode of Liberty Never Sleeps, Tom talks about the State of the Union Address, and why Donald Trump’s narrative should appeal to both sides of the aisle.
*The Party of Blackface *The Liberal SOTU? *Between Rome and a Hard Place *National Guard War? *Rally in El Paso
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Matt Whitaker Reiterates President Trump’s Call for Border Security
Acting Attorney General Matthew Whitaker, center, FBI Director Christopher Wray, right, and Commerce Secretary Wilbur Ross, left, announce indictments against Chinese telecommunications conglomerate Huawei. (Photo: Screenshot)
Acting Attorney General Matthew G. Whitaker responded to President Donald J. Trump’s State of the Union Address, saying a secure southern border would mean less crime and less addiction, and higher wages.
“President Trump’s speech presented a hopeful, optimistic vision for this country,” Mr. Whitaker, who attended the address, said. “An America with a secure southern border would be an America with less crime, less addiction, and better wages for working families.”
On Tuesday, President Trump delivered his second such address to members of Congress and the nation, one that was lauded as an optimistic, upbeat address that called for national unity.
The president touted the nation’s economic boom, called on lawmakers to “choose greatness” and to put aside partisanship on issues such as immigration for the sake of the American people.
“Now is the time for Congress to show the world that America is committed to ending illegal immigration and putting the ruthless coyotes, cartels, drug dealers, and human traffickers out of business,” President Trump said. “As we speak, large, organized caravans are on the march to the United States.”
Two separate polls from CBS and CNN find 76% approved of the State of the Union Address, while the CBS poll found 72% approved of his remarks on immigration.
Mr. Whitaker attended the State of the Union, as did the president’s guest Special Agent Elvin Hernandez, a 7-year veteran of the Department of Homeland Security (DHS) Trafficking in Persons Unit.
Special Agent Hernandez has conducted numerous human trafficking investigations involving transnational organized crime groups such as the Rendon-Reyes Trafficking Organization.
Mr. Whitaker recently announced the sentences for eight members of the notorious Mexican sex trafficking organization, which “frequently” relies on the U.S. southern border to smuggle their victims.
Female victims, some as young as 14 years old, are often lured into fraudulent romantic relationships by male members falsely promising them love and marriage. In other cases, some victims were forcibly abducted and, on one such occasion, the victim’s child was also taken.
“This is a moral issue. The lawless state of our southern border is a threat to the safety, security and financial well-being of all America,” President Trump said in his address. “We have a moral duty to create an immigration system that protects the lives and jobs of our citizens.”
“This includes our obligation to the millions of immigrants living here today, who followed the rules and respected our laws.”
Court documents revealed members illegally residing in the U.S. forced victims to comply and engage in prostitution, including severe and repeated beatings, sexual assaults, forced abortions, threats to the victims, their families and children, and psychological harm.
“The Department of Justice is working every day to bring us closer to that kind of future by prosecuting criminals, interdicting drugs, and defending the rights of the American people in court,” Mr. Whitaker added.
Victims were forced to perform as many as 45 sex acts a night without compensation. Members of the Organization, all of whom resided in the U.S. illegally, funneled criminal proceeds back to Mexico.
While the arrests and prosecutions were celebrated, law enforcement officials such as Mr. Whitaker and Special Agent Hernandez argue the president’s plan would mean prevention of these heinous crimes.
Mr. Whitaker reiterated the president’s call for members of Congress to pass meaningful legislation to secure the U.S. southern border.
“As we continue these efforts, I am hopeful that our elected leaders in Congress will come together on a bipartisan basis to support this law-and-order agenda for the good of the country.”
Stock quotes and trading stats in U.S. dollars shown closeup on a display monitor. (Photo: AdobeStock)
Three days into a new month, stocks remain on the same trajectory as January as investors continue to respond positively to strong earnings and a steadily improving economy.
After posting high single digit gains during the first month of the year, the Dow Jones Industrial Average (^DJI), S&P 500 (^SPX) and NASDAQ Composite (^IXIC) have tacked on additional gains ranging from +1.25% to +1.6% during the first 3 days of February.
This has set the stage for the S&P 500 and NASDAQ to mount a serious assault on their 200 day moving averages (MAs).
While the DJIA, at 25,411, has closed above its 200 day MA of 24,996 for 3 consecutive days, the other 2 Major Averages have not closed above their respective 200 day MAs for at least 2 months.
They say that a picture paints a thousand words, Let’s take a look at a few charts.
Note that the 200 day MA for the DJIA, at 24,995.84 is almost exactly where it was in mid October when the market began to decline. You will also see a similar pattern for the 200 day MA on the S&P 500 and NASDAQ charts. This sharp plunge in the last 2 weeks of December created the dynamic of “flatlining” the 200 day MA, as a solid month of daily closing prices were well below the moving average line.
The DJIA at 25,400 is close to 1.5% above its 200 day MA. While one sharp daily decline could wipe that out, technical support of the 200 day MA is almost exactly at the Big Round Number of 25,000, which could add some psychological support on a pull back that tests the technical support of the 200 day MA.
The S&P 500 at 2738 (Tuesday’s close), is less than 5 points from its 200 day MA of 2742. The last close above its 200 day was December 3, and that’s only happened 4 days since mid October.
Clearly we’ve had a big move from wildly over sold in late December to moderately extended, as highlighted by the oscillators below the chart. That being said, we’ve had both technical (extremely oversold) and fundamental (the FED, Earnings, Macro Data) support for the move higher.
Should the S&P 500 get through the 200 day moving average, the 2800 level would be the next major hurdle.
The NASDAQ composite at 7402 (Tuesday’s close) Is also well within reach of its 200 day moving average of 7455. With its high concentration of tech and internet names, it naturally trades with a higher volatility than the S&P 500. The NASDAQ hasn’t closed above its 200 day since November 8, one of only 2 days it has been above that benchmark since mid October.
Expect resistance at the 200 day, but with Q4 earnings in the rear view mirror, and the barrage of negative headlines on the Social Media/FANG names, possibly taking a breather, trading north of the 200 day might be an easier lift than anticipated.
NRSC Had a Field Day, While Democrats Were Still “Mourning Abrams’ Loss”
Stacey Abrams delivers the Democratic response to President Donald J. Trump’s second State of the Union Address on Tuesday, February 5, 2019. (Photo: Screenshot via People’s Pundit Daily)
When Minority Leader Chuck Schumer, D-N.Y., announced Stacey Abrams would deliver the Democratic response to the State of the Union, Republicans were elated.
Ms. Abrams, the Minority Leader of the Georgia House of Representatives, launched a failed bid against Governor Jack Kemp in 2018. While the race was competitive, it was not as close as some Democrats had hoped.
That of course included Ms. Abrams, who had sold an idea to Democratic donors in 2014, one which claimed they could flip the state solely by registering black voters who allegedly had been suppressed from the rolls.
Despite a clear margin of victory and the race being called by numerous news outlets, she refused to concede the election and blamed the loss on continued voter suppression.
Yet, despite the failure, she is now widely expected to run for U.S. Senate against Republican Senator David Perdue in 2020.
Prior to the State of the Union Address on Tuesday night, the National Republican Senatorial Committee (NRSC), which is responsible for recruiting and supporting candidates, launched a series of preemptive strikes.
The NRSC released a video titled “What Stacey Abrams stands for in less than 30 seconds.” The video shows clips of her refusing to concede the 2018 gubernatorial contest, a prospect Democrats characterized as a “direct threat to democracy” just two short years prior.
It also reminded viewers of her support for non-residents to vote in U.S. elections, and remarks and positions that are rather unpopular with the general electorate.
In a series of tweets with the video attached, the NRSC counted down the “Top 10 Reasons Why Stacey Abrams Was Chosen To Give the State of the Union Response.” The Top 10 was also featured on the NRSC site under the registered domain whystaceyabrams.com.
President Donald J. Trump went on to give what has been lauded as an optimistic, upbeat address that called for national unity. The president touted the nation’s economic boom, called on lawmakers to “choose greatness” and to put aside partisanship for the sake of the American people.
“What will we do with this moment? How will we be remembered?” he asked lawmakers gathered in the lower chamber. “We must choose whether we are defined by our differences.”
“This is the time to rekindle the bonds of love and loyalty and memory that link us together as citizens, as neighbors, as patriots.”
Two separate polls from CBS and CNN find 76% approved of the State of the Union Address.
Republicans viewed the Democratic response delivered by Ms. Abrams as if it was written for another occasion, and in response to another address.
Ms. Abrams quickly veered off into liberal orthodoxy. She again raised the possibility that her loss was due to voter suppression, a claim no serious news outlet has found evidence to support.
The speech was not well-received by the general audience, and Republicans wasted no time pouncing.
Republican National Committee (RNC) spokesperson Ellie Hockenbury said “Abrams’ speech for a national audience replayed the same broken ideas that capsized her failed campaign.”
“With extreme policies and an anti-free market agenda, Stacey Abrams was rejected by her home state of Georgia last November,” she said in a statement to People’s Pundit Daily (PPD) after the rebuttal.
“While President Trump outlined a unifying agenda to advance America’s progress, Democrats are still living in the past, mourning Abrams’ loss.”
Following along on Twitter, PPD’s election projection model director agreed the response by Ms. Abrams was not appropriate for the general electorate.
“It’s always hard to follow a president’s #SOTU. But that is usually because of optics and grandeur, not the message,” he tweeted. “The rebuttal by Stacey Abrams was not a pitch to mainstream Americans. It was part self-explanatory for refusing to concede, and part off the rails incoherent.”
It's always hard to follow a president's #SOTU. But that is usually because of optics and grandeur, not the message.
The rebuttal by Stacey Abrams was not a pitch to mainstream Americans. It was part self-explanatory for refusing to concede, and part off the rails incoherent.
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