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Data and the Effect of Policies Upon the Economy Are What Matters

By ITR Economics on May 30, 2023

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ITR Economics

ITR Economics is the oldest, privately-held, continuously operating, economic research and consulting firm in the US.

We are unbiased and apolitical at ITR Economics. Maintaining this position is consistent with our Core Values, which are the guiding tenets of our work; they help us to provide the best economic intelligence to reduce risk and drive practical and profitable business decisions.

We keep politics out of our economic analysis for several reasons.

First, politics do not help us assess the economic situation at hand. We advise our clients to avoid noise, and politics in the form of rhetoric are noise. This noise distracts from the only thing that matters when it comes to assessing the state of the economy: actual data. Rather than listen to rhetoric or be concerned with intrigue, we look at US Industrial Production, US Real GDP, leading indicators, financial trends, and a host of other economic metrics.

Paying attention to the political headlines does not get us to what we really care about: DATA.

Parties and platforms alternate in terms of who is in power and what the focus is for fiscal policy, but there are a myriad of other factors: monetary policy, world economic events, social media, technology, demographics, etc. The longer-term forces set upon our economy are not those uttered by politicians. However, understanding the consequences of political policies can help us understand longer-term economic probabilities, such as inflation and its impacts or the 2030s Depression.

Finally, politics can be focused on one aspect of society in order to gain power or distract from other issues. When business is poor, leaders can put the blame on someone far away and relatively unreachable, on a socioeconomic group, or on what they deem as “unfair” and absolve themselves of the larger responsibility of the national debt, a degraded power infrastructure, political favors, etc.

Skip the political rhetoric. We will dissect the real data.

An effective course of action for your business is to access your own data, calculate your rates-of-change, identify the leading indicators and market trends that signal the future direction of your business, and then put together a well-informed plan. ITR Economics can help with all of that.

Policies Matter – Not the Party Label

Just because we are apolitical and unbiased does not mean that we ignore the political sphere altogether. In recent years, we analyzed the economic track records of the US’ two major political parties. We did not look at what they said, and we did not even look specifically at what they did. Instead, we looked at the economic data associated with their respective periods of dominance. The result? There was not a huge difference.

Finally, while political rhetoric and intrigue have little impact on the economy, government policies can indeed make a difference. Recent history’s most glaring example would be the COVID-19 shutdowns and the related stimulus. These actions had a direct impact on the economic data, and the impacts are still with us today.

Government action does not have to be of the emergency variety to have an impact. The Infrastructure Investment and Jobs Act of 2021 was analyzed and considered as we reviewed some of our nonresidential construction outlooks.

Follow along with us at ITR Economics; we will help you separate the signal from the noise.

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