It is best we don’t agree…

I was impressed with President Obama reaching out to Trump welcoming a healthy transition of leadership. “The peaceful transfer of power is one of the hallmarks of our democracy.” Secretary Clinton was graceful in defeat and suggested our constitutional democracy demands our participation. I agree and suggest this advice makes for our greatness. We all must continue to do our part…

For me, the significance of life is found in being fully engaged in activities. The best undertakings for our well-being are found when we utilize our individual characteristics and invest them in something larger than ourselves. Our experiences—exaggerated by dreams—carried on faith and filled with hope can either succeed or fail. Either outcome eventually satisfies our inner soul because happiness can only be fully understood through loss. The joy of success is sweetened if one has felt the agony of defeat.

Our country has just experienced what has been described as one of the ugliest, hardest fought elections in our history. Well over 120,000,000 citizens took to the ballot box and exercised their right. Many of us were fully engaged requiring great mental and physical strength. We carried passion about our cause wanting to endure what many times felt like an impossible mission.

Emotions were larger-than-life as we failed to see why others (most often friends and family) could be so oblivious to what we knew to be true and felt in our hearts. Stories were overstated, feelings hurt, and our ability to listen stifled. Yet we maintained diligence in efforts to accomplish what we believed in which is healthy.

At the end of the day; some of us lost the battle. This emotion, like others in life sits low in the stomach. We walk in a somber state carrying in our hearts a suffocating feeling as if all hope has been lost. I know this feeling both from historical national campaigns and on a personal level having run for office. It sucks!

Today, as I sit in my office rejoicing in the outcome, I innocently look to my wall where I arnoldhave hanging a painting titled “The Prayer at Valley Forge” by Arnold Friberg. My heart immediately turns to those on the other side who may be heavy with sorrow as I realize—like George Washington—I can turn in prayer for the relief and support of my fellow beloved citizens and our country. It is every one of you great and wonderful people that have given me perspective, allowed me an opportunity to share my view, and who with me can build on the rich history of our great nation. President Washington considered it an indispensable duty to solicit the help of the Almighty. I too find comfort in kneeling in prayer at this critical time in our countries history.

Friends, I pray for your comfort. I pray that we will put the passion of the election behind us and reunite as citizens. I pray that we will build strength from our differences realizing unmet dreams, carried by faith and filled with hope for a better day!

It is together we have made this country great; it is together we will continue building on this rich heritage…



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Is the Republican Party dead?

We can find nearly any opinion/evidence/support we are looking for to validate our ideals. I have made reference before about a game situation where my brother-in-law and I sat side by side watching the same play where a penalty was called. He cheered for my team’s rival. While I felt the ref had seen the play correctly, he was beside himself complaining about how unfair the call was. This was for me first hand evidence of how our persuasions lead us to see the same thing differently. I could find all the reasons the call was right while he objected by adding his perspective.

In this election cycle some are saying the Republicans may not survive as others suggest the strength will be shown through the silent majority. Regardless, it is my hope that we will be able to learn from the outcome.

Trump has been called a populist candidate. Over the last 60 years Nixon and Reagan were populist candidates. They too rode the wave against the establishment as outsiders. Nixon was carried by the silent majority’s antagonism toward social disorder and Reagan “Stagflation” (Bush 41 won on coattails and Bush 43 is argued to have won through the Supreme Court). The term populist strikes me a little odd as populism means the people which is what we want– isn’t it?. This is how Republican candidates win elections; through a populist vote.

Ok, suggest the Democrats receive a populist vote as well. My arguement is that Democrats have built-in constituencies who favor expanding government benefits and/or are targeted by perceived unfair treatment. Ask yourself why they really want open borders? Do ethnic minorities have targets on their backs along with other circumstances which favor voter blocs such as LGBTQ’s, Unions, and Women? There are other examples but these give you the idea. In any election, Democrats have a built in constituency which guarantees them an election if the “populist” voters don’t show.rep

Think of this:

Democrats portray themselves as supporters of these blocs, but who are they really?

  • Trail of Tears-Indians tormented forced to relocate- first Democrat President Andrew Jackson
  • Democrat party’s pro-slavery faction secedes after Lincoln is elected leading to Civil War
  • KKK created by Democrat Nathan Bedford Forrest-first Grand Wizard
  • The Palmer Raids- Woodrow Wilson set out to arrest Americans who weren’t loyal to the Government
  • Democrats filibuster a Republican measure to stop lynching
  • Japanese Internment Camps- Democrat Franklin Roosevelt’s executive order
  • Bay of Pigs Kennedy didn’t give air support to militia to overthrow Castro
  • Democrat George Wallace- Inaugural Adress-“segregation now, segregation tomorrow, segregation forever”
  • Chappaquiddick- Ted Kennedy left Mary Jo Kopechne suffocating in his car as he plotted how to reveal the news
  • Iranian Hostage Crisis- Jimmy carter’s failed rescue attempt
  • Bill Clinton- turned down Sudan’s offer to extradite Osama Bin Laden before 9/11
  • Obama- America loses its AAA credit rating for the first time in history

Republicans in fact are better supporters of the Democrats voting blocs but aren’t out patting themselves on the back. Perhaps a mistake…

  • Emancipation Proclamation- first Republican President Abraham Lincoln issued an order to free all slaves
  • End of Civil War- Lincoln reunites country after guiding the north to victory
  • Women’s right to vote- Republican Senator Sargent with Susan B Anthony and Elizabeth Stanton introduce text for 19th Amendment
  • First Woman elected to US House- republican Jeannette Rankin
  • Republican owner Branch Rickey brought Jackie Robinson in the MLB breaking the “color” barrier
  • Civil Rights Act- GOP overcomes a five day filibuster by Senate Democrats
  • Condi Rice first black woman to ever be Sec of State under George W Bush
  • Balanced Budget (1998-2001)- Republican congress against unenthusiastic Bill Clinton

Trump won the nomination over 16 other candidates; he has inspired astounding enthusiasm among the middle class. He has the Establishment along with the Democrats and Media suggesting he is anything but worthy, yet remains a viable option. I for one don’t want the Republicans to change who we are—democracy it is about the people—not the politian’s careers.

My party has faults but will survive regardless of the outcome of this election. It is the safe harbor reserved for “the people” when critical change is needed… It is when tipping points are reached the masses come out in number which well may be happening this year…


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Her plan- won’t work

For all you voters who are supporting Clinton with hopes she will come to your aid; please think again. Her portrayal of helping the middle class while sticking it to the rich is a hoax!

If today you earn $0-$18,450 your rate is 10%, under Clinton you can earn $100 more at this rate. Thank you for the gift for those of us between $18,450 and $18,550. This trend continues up to $5MM with each rate remaining the same with slight differences in the bracket like in the example above. Those over $5MM move from 39.6% to 43.6%. Way to stick it to the rich HRC…

Today our capital gains tax rates are 20% (15% for long term gains- those investments held hillary2_1over a year). Under Clintons plan the rate begins at 39.6% for years 1-2, 35% 2-3, 32% 3-4, 28% 4-5, 24% 5-6 and long term which is all over 6 years 20%. But she also adds 4% surtax on amounts over $5MM. Example a family sells a stock they bought for an investment. Say they made $10,000 in the first year. Their tax goes from $2,000 to $3,960, or after three years from $1,500 to $3,200. This is a 51% and 47% increase in tax. I use small numbers intentionally. Think of real estate transactions with larger amounts or businesses with millions invested. What she fails to understand (I know-she has no business experience and is a career politician-not a good excuse) is that people and businesses prepare for expenses which include tax rates. There are only two things that will happen: 1- no one will sell until we correct the madness and 2- values will decrease. The market is changed negatively under her plan with wealth stifled at all levels. Candidate Clinton- tax receipts come from an upwardly mobile economy…

This may seem good to the naive, “Oh let’s raise taxes…we will get higher tax receipts,” but it doesn’t work! Know that whoever was thinking of selling with a tax cost of 20% will not entertain doing the same at 43.6% (an increase of a 218%)? People- either get selling assets now—just in case the madness carries out—or vote against this plan.

In case the above didn’t catch your attention: Let’s say you own a farm, your parents pass, and you with your siblings want to continue on with the family business. Today you can do so but with a tax obligation of 40% for value over $10.9MM. Under the fabulous Clinton plan designed to stick it to the rich while bringing new found wealth to the middle class, you will be asked to pay 45% at a lower threshold of $7MM. This family pays an additional $1,560,000 at the time a $10,9MM asset passes down to the children. Please, tell me how many farming families can afford this? All that is wanted is to continue the family business…

PS- the other team wants to end the death tax. Now that is what I call supporting the middle class…

(Fact check me please- I want a good debate)


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Global warming- my simple view

I am not a scientist nor do I claim to fully understand, but I do care enough to have a basic knowledge. Please, where I am wrong address it with me; that is how I learn…

I was asked in a fb post whether or not I believe in global warming: This is my answer

Global temperature changes have occurred throughout the history of our planet. We don’t melting-earth_climate-change_thomas-vogel_gettyimages-157581491-1024x607need to go back as far as the ice age to see the extreme fluctuations that have occurred. Greenland was cut off by ice from 1410 to 1720 as glaciers advanced in the Alps. There was a “little” ice age from 1650-1850. And then in 1973 some scientists believed the globe was cooling. In an attempt to address the issue Carter asked that we melt the polar ice caps to avoid the loss of agricultural production and run out of food by the 1990’s. I will agree this came about as there was a slight trend downward in temperatures from the 1940’s through the 1970’s and that science now has much more accurate equipment today, but fact is we had warnings.

This early and possibly inaccurate portrayal of science, by political figures, is why some wonder today if there is a political agenda at play. Carter also suggested we were running out of oil which was followed years later by Clinton. With the technology science enjoys today, we not only can see an upward trend but can test sea levels and take pictures of the ice caps from space.

So the question is the amount of human contribution to either cycle the earth is going through at any given time in history. The suns energy warms the earth through the light passing into our atmosphere. The heat then radiates upward as it escapes but when “greenhouse” gases exist—in higher than normal conditions—the heat is radiated back again to the surface warming our planet yet again. The earth sustains an average temperature of 59 degrees which is termed life-supporting. Some warming is directly related to output from the sun which varies slightly but not enough that life has been threatened or lost.

The components that affect greenhouse gases are: Carbon dioxide, Chlorofluorocarbons, Methane, Nitrous oxide, and Water vapor. Of these, water vapor is the most abundant gas. Unfortunately as the temperature rises this gas increases naturally and is where we get the noticeable changes in precipitation. Carbon dioxide (Co2) is the place most of the discussions lay and politicians popularize our ability to make a difference. Fact is, Co2 plays a minor role and there are factors outside our control that build the Co2 levels. Yes burning fossil fuel plays a part, but a minor part of a minor part. Please remember we exhale this gas as we breathe. Volcanoes and forest fires are the biggest contributors. It has been a little time since I studied this but from memory several individual volcanoes over history have contributed more Co2 then mankind throughout all history. We can’t stop this natural phenomenon– which is fine–but the second largest contributor is fire. Think with me about the fires that burn out west and how they fill the atmosphere in the Salt Lake Valley; even when they are in another state. We no longer manage our forests by removing the dead woods. When the natural process of re vegetation occurs in the forest; fires clear where man could have helped. It has become unpopular to manage. Do you know that after a logging company has taken trees for lumber the forest vegetation is increased 20% and more? Our science hasn’t just improved in reading global warming but on ways we can assist Mother Nature in the vegetation of her forests. I support doing more with fossil fuels, energy efficiency is critical for more reasons beyond global warming, but it can’t be all we do or at the expense of reason.

For the other gases: Chlorofluorocarbons- these are industrial and commercial applications that are no longer in use or regulated. Methane- this is the funny one that farmers have to deal with, in particular cow/dairy farmers. Other producers are landfills and agriculture. This gas is more active in causing negative effects then Co2 but is less abundant/relevant.  Nitrous oxide- organic fertilizers (don’t tell the naturalists), biomass burning, some from fossil fuel, and acid production each contribute.

I hope you ask why I know this. I supported a friend who tried to get a clean burning coal fired power plant approved. I will tell you science does not matter on this issue! His process which was worked on in conjunction with some of our finest scientists at USU was able to leave the environment better then they found it. They took emissions and ran them through and algae leaving no footprint whatsoever. It finally got approved but delays in lawsuits from environmentalist who didn’t even know what they were doing delayed to the point of exhaustion; sadly the goal.

We can do better, I want to be part of helping, but we can’t label specific industries alone which are designed to fulfill political agendas…


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An uneducated deplorable

cartoonSunday rant from an uneducated deplorable: I have friends (intentionally left unnamed but they know who they are) who amuse me endlessly. They spew hate and misguided information about the Presidential race perpetuating the media and establishments partial portrayals of history. They never check sources, and I bet they don’t even fully read the fake web articles they find and share. When either me or a commenter replies with the “real story” they dig into another untruth with no response to the first. If ever asked why one should vote for their candidate they never—no not once—ever give an answer.

Bernie had a following which may be described best by Forrest Gump- stupid is as stupid does. Why am I so critical? Robin Hood as we know stole from who he felt had surplus giving to those those he felt were in need. In these “robberies,” individuals were hurt but forrestno one is robbed perpetually because they set up barriers. In business, if the government takes from those they deem to have surplus; this isn’t a single unplanned event. Those companies then need to address the cost: raise prices, stop production, or find a new place to do their services. Free tuition and healthcare caught on with Millennials. Bernie had a loyal following; they don’t know the consequences. The DNC teamed up with Clinton to defeat him but knew they too needed a giveaway to both keep these voters and solicit new.

Emails were found (yes not all are missing and more are coming) suggesting Clinton felt Bernie followers were blindly supporting but that they needed something to draw them in. To me, she is about finding voting blocks; not whole country solutions. Think of some: $15 minimum wage, and corporate profit sharing. Great dream for sure, but who pays? It is easy and popular to say the rich as in the Robin Hood story but not realistic. No one gets mad when the “rich” are robbed. They are those “other” people, perhaps even deplorable… yet it is they who are critical to any vibrant economy.

A friend who I will name, Mike Holmstrom because he is exceptionally bright, fair minded, once Republican, and I believe current Clinton supporter shared an idea. He offers Trump supporters have a psychological problem. In reading about it, oddly I find it describes verbatim the majority of the anti Trump group who then by default are Clinton supporters.

Here goes: nearly all Clinton supporters are dealing with a critical psychological ill known as the “Dunning-Kruger” effect — put very simply, when stupid people don’t know that they are stupid — in action.

Example: Why is it some think Clinton won the debate? Well experience could be a benefit for sure but maybe one candidate is a machine and the other a reasoning human willing to go off his insight. Clinton had great one liners memorized to the point they were both robotic and often stated off topic leaving those who truly listened wondering. Is it odd to anyone she can’t remember a thing when asked by the FBI but can remember everything Trump has done for 30 years? It was reassuring to me Donald was simply answering the questions even forcing the moderator to uncover his obvious biases.

But go on Trump hating friends, say Donald hates women because he called individuals like Rosie names or defended Miss Universe to be portrayed as name calling by Clinton. I’m sure glad we don’t hold everyone to this standard. Imagine every person who got mad at another calling them a name to be then be called a bigot toward all that individual represented. Recently a friend said in a rant Donald has a “porn star” immigrant wife. cartoon1Wow- I mean WOW laughing at who the potential first man would be. Why is Ivanka Trump asked about her father yet Chelsea isn’t? And if Trump didn’t pay taxes and/or declared bankruptcy. These are our laws which incidentally are there to encourage entrepreneurs to take the risk and build business. Is this really that hard to understand? This is where the jobs are and the hope of a better day.

I gave this answer to the question as to why anyone with intelligence would vote for Trump:

Trump is a man of singular political courage. At least he is willing to defy the rhetoric of the establishment and the mainstream media. They unjustly describe him as anti-American for daring to voice ideas and opinions that when listened to make a lot of sense.

Donald Trump is ridiculed mercilessly for saying, “Make America Great Again” or “America First.” This action against government whether here or abroad isn’t old fashioned (I hope)! It is directed to the well being of our country which means each of us. This idea represents the wisdom of our founders; it is our tradition.

A clear vision following this courage is what history has shown made our country “great!” This will not only benefit each of us as its citizens, but prove trumpthumb1yet again to be the beacon on the hill providing hope to the world. We shouldn’t ever be embarrassed for having faith or living with hope.

Yes, I am conservative. No, I am not so dogmatic that I think the Republicans have all the answers, but in this race the choice is clear. The promises made to obtain your vote are unfounded and—if an attempt to reach them were enabled—our country will suffer.

No, my response isn’t about years of lies, emails, Benghazi, the Clinton years or a foundation defying all Clinton seems to hate, but a fear we cannot survive what her ideas would do to our collective well-being…


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The-other side-of the story…

An Open Letter to Colin Kaepernick, by Chris Amos retired police officer father of three…

Dear Colin guess you have been pretty busy these last few days. For the record I don’t think any more or less of you for not standing for the national anthem. Honestly, I never thought that much about you, or any professional athlete for that matter, to begin with. I’ve read your statement a few times and want you to know I am one of the reasons you are protesting. You see I am a retired police officer that had the misfortune of having to shoot and kill a 19-year-old African-American male. And just like you said, I was the recipient of about $3,000 a month while on leave, which was a good thing because I had to support a wife and three children under 7 years old for about 2 months with that money. Things were pretty tight because I couldn’t work part-time. Every police officer I’ve ever known has worked part-time to help make ends meet.

You know, Colin, the more I think about it, the more we seem to have in common. I really pushed myself in rehab to get back on the street, kind of like you do to get back on the field. You probably have had a broken bone or two and some muscle strains and deep bruising that needed a lot of work. I just had to bounce back from a gunshot wound to the chest and thigh. Good thing we both get paid when we are too banged up to “play,” huh? We both also know what it’s like to get blindsided. You by a 280-pound defensive end, ouch! Me, by a couple of rounds fired from a gun about 2 feet away into my chest and thigh. We also both make our living wearing uniforms, right? You have probably ruined a jersey or two on the field of play. I still have my blood-stained shirt that my partner and paramedics literally ripped off my back that cold night in January. Fortunately, like you I was given a new one. Speaking of paramedics aren’t you glad the second we get hurt trainers and doctors are standing by waiting to rush onto the field to scoop us up. I’m thankful they get to you in seconds. It only took them about 10 minutes to get to me. By the grace of God, the artery in my thigh didn’t rupture or else 10 minutes would have been about 9 minutes too late. We also have both experienced the hate and disgust others have just because of those uniforms we wear. I sure am glad for your sake that the folks who wear my uniform are on hand to escort you and those folks that wear your uniform into stadiums in places like Seattle!

I guess that’s where the similarities end, Colin. You entertain for a living, I and almostCapture 800,000 others across this country serve and protect. Are there some bad apples within my profession? Absolutely, and they need to be identified and fired or arrested! But you know what, the vast majority do the right thing, the right way, for the right reason. Did I mention that seconds before I was shot, an elderly African-American gentleman walking down the sidewalk, turned to my partner and I as we rode past and said, “Get them.” Get who, you ask? The thugs terrorizing an otherwise good and decent neighborhood, home to dozens of good, decent African-American families trying to raise those families in communities not protected by gates and security guards. No these folks and families depend on America’s law enforcement officers.

Colin, I have buried 7 friends killed in the line of duty and three others who have committed suicide. I have attended more funerals than I care to remember of neighboring departments who have lost officers in the line of duty, during my career. Law enforcement oficers with different backgrounds, upbringings and experiences united by their willingness to answer the call to protect and serve their fellow citizens.

Colin, I am sorry for the endorsement deals you may lose and the dip in jersey sales, but please know you will NEVER lose what these men and women and their families have lost. And so whether you stand or sit during the national anthem means very little to me. As for me and the men and women on whose team I was privileged to serve, we will put on our ballistic vests, badge and gun, kiss our loved ones goodbye, for some tragically for the last time, and out into a shift of uncertainty we will go. We will continue to protect and continue to serve and we will be standing at attention, Colin, not just for the playing of our national anthem, but far more importantly for the playing of Taps.

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Good hearts, great men!

In our world of 24 hour news, we innocently fall into an attitude of viewing society as portrayed by the media. This can lead to a distorted interpretation of peoples intentions whether in a group or as individuals. I don’t think this is necessarily the purpose of the media, however this type of story is what sells in the marketplace.

I bet you can’t find a station that carries all the good people are doing every day. These are the stories behind the scenes and they are much more than the “old lady” being helped across the street. They are a neighbor lending a hand when difficulty befalls, babysitting for someone who needs a night out and hasn’t gone because of money, giving a first class seat to a returning veteran, or leaving a tip that makes a waitress’ day.

We hear of these stories through social media or in conversation as we talk around the water cooler. Every once in a while someone takes the time to express gratitude for a deed which is considered to be above and beyond. These are the stories that get a larger audience yet still fall short of the nightly news. One of these stories recently came to us through email.

Bangerter UPThis year marks the 70th year of our Parade of Homes™. Over the years we have had many dedicated builders participate. This year was to be Bangerter Homes 26th consecutive year. Their homes are always a hit. You may remember when the “UP” house was in the 2011 parade? It was a Bangerter Home and last year was the story book home! They represent high quality and creativity taking comfort and style to a new level.

Why I say “was to be” Bangerter Homes 26th year” is that their 2016 Parade Home caught fire and burned July 11th mere days before the parade was to begin.

_DSC3757What is remarkable isn’t that the home burned or that the Bangerter’s were to have a record setting year, but what the email sent to us said (it came from the owner of the home):

“…I would like you and the rest of your office to know one important thing about the Bangerter’s. I called Adam at 11:30pm just after finding out about the fire and he, his wife Nicole and Jordan came right over. Adam and Nicole literally held my wife and cried with her as we watched the flames jump from my brother’s home to ours. They stayed with us through 3:00am as the fire was brought under control. They are true partners and friends and we are so grateful to have a builder that really cares. They care enough to cry with you when things get really tough…

… I would want everyone to know that everything with Bangerter has been handled with perfect honesty and integrity throughout the process. We love our builder and would recommend anyone to them. I am pretty confident in saying that the Bangerter’s must exemplify all the great qualities you would hope to have in every member of the SLHBA…

Yes, you are right; the owners of Bangerter Homes are amazing men of character who care about their business. However, it is these men who are behind the scenes, making everyday a little brighter for our residents and community while not wanting any publicity. So maybe, just maybe it isn’t entirely the media’s fault they typically report bad things; the good people simply aren’t willing to go before the cameras. And yes, homeowner, we do have these type of members throughout our organization. Thank you for sharing!

Fox 13 story:


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Davis’ 2016 Lake Powell Trip

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Lesson learned from tragedy

I have never been blamed for being the brightest star in our night sky, nor has anyone ever said that I take a conservative approach to adventure. In nearly every opportunity I’m offered, my blood fills with excitement as my nature is to push the limits. Unfortunately this often leads to extreme exhilaration upping the ante of risk as I push the breaking point even further. Most often I come away having had the time of my life having enjoyed a sensational adrenaline rush and feel excitement of having accomplished a rare feat. Certainly, I have had my fair share of broken bones, and/or mishaps that need time and healing. Naturally these historically have been wake up calls which unfortunately flee from memory (common sense) as something new arises for me to experience.

I sit here writing this post with a new sense of caution knowing I can still enjoy life without rolling the dice of limited odds. Some may not know I was involved in an ATV accident recently which required hospitalization. This accident didn’t involve lack of restraint but was a result of an innocent mistake. That’s not why I am writing this post.images

The story line is what I learned as I lay motionless in the hospital bed feeling sorry for myself. A nurse at IMC on the trauma floor came into my room to visit. He carried a message I want to share so that those like me can both enjoy life and keep on living knowing the unbelievable statistics that are waged against us. In 2015, there were many nights the trauma floor was filled to capacity turning away deserving patients. In that year there were 1,100 victims of ATV accidents. Of those injured 108 passed away and 347 were paralyzed. I can’t say how the remaining 645 turned out but am certain that like me they are dealing with difficult healing and potential loss of full mobility.

The night I was admitted four of us had come in from accidents. One paralyzed from the neck down and two from the waist down. Yes, I felt sorry for myself until his visit as my injuries suddenly became meaningless comparatively. These statistics come from one sport.

Friends and fellow outdoor high adventure seekers have fun; do exciting things for it is these events that make our hearts beat fast and fill our souls with adrenaline. But please, please learn as I have and be ever so careful while enjoying our life’s journeys!


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The Economic Forecast for the Second Half of 2016: Decent but Nothing Remarkable

Despite GDP again slowing in Q1, as has been the case for the past few years, the economic recovery that began in July 2009 remains intact.  The poor performance of the US economy from January through March was almost expected, and the incoming employment, housing, and service sector data all point to a modest economic pickup.  GDP growth the rest of the year should average 2.2%, with growth in Q2 closer to 2.75% as the economy rebounds from a tough Q1.  The combination of continued wage growth and increased residential construction activity suggests that 2016 will probably improve as it progresses.images

Despite weak energy prices, a continued strong dollar that has hurt manufacturing by making US exports costly and imports cheaper, and a struggling agricultural sector, the rest of the economy is OK.  As long as the service sector and construction continue to expand and wages rise, the US economy will continue to grow despite the headwinds it faces.  Importantly, the labor market continues to strengthen, voluntary quit rates are rising and are almost back to where they were before the Great Recession, the number of involuntary terminations keeps falling, and job creation, while down from last year, remains strong.  At this rate, there will be little slack in the labor market 12 months from today. Lastly, passage of the FY 2016 budget package has boosted economic activity as it extended some tax breaks and eased spending caps on domestic and military spending, making fiscal policy pleasantly expansionary.

A definite economic bright spot in 2016 has been housing, and that is due to rising household formation.  After averaging well over 1.2 million annually from 1983 through 2006, household formation plummeted to just 600,000 in 2014.  Since then, it has been rising by about 1.2 million a year.  Add to this slightly improved access to credit, and housing starts should reach an annualized average rate of 1.19 million during the second half of 2016, their best level since late 2007, with new single-family construction contributing at a pace of 810,000 units and multifamily adding 380,000.  Despite being severely constrained by a lack of inventory, pending home sales are strengthening and existing home sales should rise by 3% annually, while home prices should rise by 5% annually.

As for inflation, it remains benign but shows signs of slowly rising from its current level.  The dollar is likely to strengthen slightly in the latter part of the year and oil prices appear to be rising, thus the two trends that have exerted strong deflationary pressures on imports and energy respectively should dissipate.  Moreover, as the unemployment rate continues falling, labor shortages are becoming increasingly widespread.  This pushes up wage growth, which is definitely rising, albeit modestly, and thereby boosts household spending.  However, rising prices and wages will push the Fed to raise short-term rates by one-quarter-of-one percent as early as July, and certainly by November or December.  Long-term rates have bottomed and 10-yr Treasuries will end the year at close to 2% as the economy strengthens.

In short, the economy continues to grow modestly.  Short-term interest rates are likely to start rising, wages are rising, and residential construction activity looks to continue to slowly strengthen as we go into 2017.  Most critically, continued solid job creation will keep consumer spending up and the likelihood of a recession during the next six months, close to zero.


Elliot Eisenberg, Ph.D.,

GraphsandLaughs, LLC

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