Speech by Prez not last word on budget

I didn’t cringe even once during President Trump’s speech on Tuesday. But I was cringing when the Dow Jones industrial average decided to go up 303 points Wednesday based on what he said. Trump’s speech was ter- rific. He sounded presidential and at the same time came across as, you know, what you might call human. That was rare not only during the campaign but also during his first month in office.

In my last column, I wrote two speeches — one for the Good Donald and one for the Bad Donald. Luckily, Trump’s real speechwriters got the Good Donald to step forward Tuesday night in his first remarks to a joint session of Congress.

Based on that speech, the stock market boomed Wednesday, with the Dow surpassing the 21,000 level for the first time, closing at 21,115, and the Standard & Poor’s 500 index climbing 32 points, to finish at 2,395.

The stock market’s euphoria since Trump’s election in November seems to imply that our country will soon be renamed the United States of Nirvana. Unfortunately, that couldn’t be further from the truth.

So let me throw some cold water on the Wall Street inferno in an attempt to bring some perspective to the matters at hand.

The first problem is that Trump was making like a kid on line to see Santa — ticking off a long list of things he wants. But Trump’s list would break our budget — and balloon our nearly $20 trillion in debt.

Trump wants another $1 trillion for infrastructure repair? Why not? What’s another trillion! More defense spending, money for a wall and to take better care of veterans and a few more buckets

of cash to toss at education, the poor and on and on.

And, oh yes, do it all while also cutting taxes.

Plus, all extra spending has to come from a discretionary spending budget that’s only $1 trillion — give or take a hundred billion. And more than half that $1 trillion is military spending. Good luck with that, Mr. President.

How will all this be paid for? The president hasn’t said, although it seems as though he is hoping for that old budget trick of unrealistically projecting how much better the economy will do in the future and how much extra tax revenue will be generated by that unrealistic projection.

The only problem is, the US economy is still limping along. And just Wednesday, the Federal Reserve Bank of Atlanta reduced its estimated growth for the first quarter of 2017 to just a 1.8 percent annual rate.

Let me put it in a way that’s easier to understand: Economic growth sucks, just as it has for the past decade.

Yet the stock market is acting like everything is absolutely wonderful and corporate profits are soon going to boom.

I asked David Aurelio, a Thomson Reuters’ analyst, to put some numbers together for me about the state of the stock market. And it shows that stock prices are enormously high relative to corporate profits — the typical way these things are measured.

When you take out all the tricky accounting, the share prices of the companies in the S&P 500 index compared to the earnings per share of those companies (the price-toearnings ratio, or PEs) is more than 25 to 1.

The long-term average over decades is 15.5 to 1.

Even if you allow companies to use tricky accounting — non-Generally Accepted Accounting Principles (GAAP) — PEs are still higher than 20 to 1.

Those calculations are for profits over the last 12 months. Looking forward, the forecast PE of the S&P 500 companies is more than 19.2 to 1 for for PEs traditional GAAP accounting.

Corporate profits could rise, especially if the Trump tax cut is passed. But what if it’s not passed for a year? Or ever? What if congressional Republicans and Democrats balk at seeing the country’s deficit jump by trillions more?

What if the Federal Reserve and the financial markets prevent tax cuts?

What I’m saying in light of the Dow’s rapid rise and the average PEs is this: Be careful.

And don’t get greedy.

This is going to be a big disappointment to a lot of people, so get hold of a hankie.

The employment report that each month purports to show — but really doesn’t — what is going on in the job market isn’t coming out this Friday.

Usually, the report comes out the first Friday of each month unless that happens to be the first day of the month. This Friday is March 3, so you’d expect to be seeing people’s guesses about the number of jobs created in February and the subsequent excuses as to why their guesses were wrong.

But the February jobs report isn’t coming out until March 10.

That’s because February has only 28 days and the 12th day of the month was a Sunday. That pushed the surveying back a full week.

This is the latest that the report has been released since I don’t know when — and I don’t know when because, when I put the question to the US Bureau of Labor Statistics, the folks there didn’t know.

Thankfully, Trump made enough news this week that I didn’t need to fill a column with my usual job market analysis.

We learned this week that the chicken in Subway’s sandwiches is really almost 50 percent soy.

So, shouldn’t this soychicken concoction be called Sicken instead of chicken? “Would you like your Sicken sandwich on a foot-long roll, or 6inch?”

What’s the most endangered profession today? Besides journalism, I mean. I’d say it has to be Washington lobbying.

Every time Trump trots out a bunch of corporate executives for a photo opportunity in the Oval Office, a corporate lobbyist cries. If executives have a direct line to the White House, why would companies need people whose sole purpose is to buy the lunch and influence of lower-level politicians?

There’s going to be a lot of empty office space on K Street in Washington, where lobbyists hang out with think tankers and advocacy groups to plot ways to get people to pay for what used to be unique access to government officials like the president. The memoirs of President Obama and First Lady Michelle Obama fetched $60 million! Ridiculous beyond belief ! Even if the former POTUS had this kind of a plot twist: That he really was born in Kenya and prays as a Muslim in secret, his yarn wouldn’t be worth this kind of dough. President Clinton only got $15 million for his book and that had the possibility of containing sex. President George W. Bush only got $7 million, which was probably $6.5 million too much. I’m holding out for $100 for my memoirs, but I’ll also need a couple of free lunches thrown in.