Yesterday, the Senate made their best case in 2017 for term limits. Senate Majority Leader Mitch McConnell couldn’t get the votes to repeal and replace the health care bill, and he had to shelf a repeal-only bill later. Looking at the average age in the House and the Senate, it seems as though the ideal limit would be four House terms and two Senate terms.

This would not only curb the urge to put Washington, D.C. ahead of constituents, but it also could bring fresh and vigorous talent to the U.S. Capitol.  In 1981, the average age in the House was 49 years old compared to 58 years old now; in the Senate; the average is 53 years old versus 62 years old in the current Congress.

We would expect leadership to be older, but their time at leadership is an issue. Senate Majority Leader Mitch McConnell is 75 years old, and arrived at the Senate in 1985; Minority Leader Schumer is only 66 years old, but next year will mark his second decade in the Senate.

The talk of term limits has been a major grassroots issue for a decade that propelled the Tea Party movement to a national force. I don’t know that it ever happened; those folks in power know that even in their 60s and 70s, they could outlast a two-term President Trump.

Let’s face it, we all scream “throw the bums” out, but we somehow think our own representatives are okay, in part because, they’ve brought home the bacon or bridge to nowhere.  I guess if there is ever a true uprising in this nation, those in power will forget about what got them there and focus on how to stay, even when they are not mutually aligned. 

115th  Congress	House	Senate
Average Length in Office	9.4	10.1
Average Age	57.8	61.8

Confidence Fading

This morning, we’ll get the latest on housing starts; yesterday, we learned that Homebuilder Confidence continues to ebb. Spiking after the election, homebuilders loved the idea of looser lending and a growing economy.  Moreover, traffic soared to expansion in December after being mired in contraction since October 2004. 

Now, traffic has moved back to contraction in back-to-back months.

In addition to fading faith that D.C. can pass legislation, it spurs the economy with homebuilders pointing to tariffs on Canadian Soft Lumber for spiking prices (see chart).

Breathing Life Into Coal

I read an article where Sir Richard Branson suggested the shutdown of coal mines and employing those miners in the so-called clean energy sector. Clearly, something is wrong with that statement, including the fact that there aren’t many pure clean energy jobs as the previous administration counted –such as driving a city bus that uses natural gas.

I’m also reminded of the Ivanpah Solar Power Facility in California that got a $1.6 billion government guarantee that forced local power companies and their customers to pay extra for electricity. The project is a bird-killing boondoggle and even by their estimates, it will only provide 80 full-time permanent jobs. Imagine if our government invested that kind of dough into so-called clean coal.

President Trump promised to bring the industry back to life, and we are already seeing job creation on a stronger demand. Exports of steam and metallurgical coal have come on strong (see chart).

The domestic demand is also picking up steam (no pun intended).  According to CSX Corporation (CSX), which posted results after the close on Tuesday, coal volume climbed 7% as revenues rocketed to 27%.  America is blessed with coal, which is great news, and it’s still the number one source of energy in the world. It will be for some time to come, as more nations move away from nuclear and won’t subsidize solar and wind.

We need to revive this industry and keep those great paying jobs in America.

 

Today’s Session

Yesterday, Goldman Sachs derailed the Dow Jones Industrial Average, but the S&P 500 and NASDAQ composites hit fresh all-time highs.  This morning, all three indices are looking to be up in the plus-column, but the Dow faces another anchor with IBM getting slammed after another disappointing earnings report. 

Big Blue (nickname has a different meaning these days) is the fifth highest weighted stock in the Dow at 4.89%, but Goldman is number one at 7.09%.  So, maybe the index holds up today.  By the way, Morgan Stanley is up nicely bucking the trend in big financial but also signaling these names are all oversold.

Housing Data out this morning dovetails nicely with our special homebuilder report which we’ll update.  Make sure you get a copy – email the research desk or contact your representative.

 

Comments

I think the only way to get term limits would be to exempt the current members, they wouldn't vote themselves out of power. Any newly elected would have their term limited, then maybe in about 30 years we can get there. Richard Cronin on 7/19/2017 10:11:08 AM

Why are term limits seen as some kind of magic solution to the problems in Washington? After 8 years in Congress or 12 in the Senate, these guys are just getting experienced enough to become real leaders. The problem is the corruption encouraged by powerful lobbies on one hand and entrenched bureaucracies on the other. Trump's problem at the moment is that he is still somewhat green to the ways of Washington. The voters need to wake up to the need to elect people with wisdom and courage. We get the kind of government we deserve. And right now the electorate is a very confused bunch thanks in large part to the lack of those same qualities in the media. I helped start a daily newspaper when I was 20. Today at 87, I'm ashamed of a large part of my profession. Dennis Howard on 7/19/2017 10:38:54 AM

The US congress is the perfect legacy of the Toxic Boomers: Long on grand schemes but short on practicality and hard work! Scott Manhart on 7/19/2017 11:17:00 AM

Refreshing post Charles - your insight into Hugh Banks loaded by debt such as Morgan Stanley but what about that hedge German Bank with all the derividies Deutche Bundesbank Ramon Espinosa on 7/19/2017 11:25:03 AM

This is a good start but good luck! These people care more about their jobs than whats good for America. On the same subject, different class of employees, we need a constitutional amendment which would remove the life time tenure of federal court judges. Maybe limiting these future appointments to ten years with senate approval. Cannot be reappointed and get full pensions after their terms. tom on 7/19/2017 11:26:19 AM

Longevity does not breed wisdom in politics; it breeds privilege and wealth which is why all these guys and gals once they are in will do anything to remain in as witnessed by their perks, health care, pensions,etc. If they couldn't stay in power maybe the lobbyist would not hold such sway over them because they wouldn't have to raise reelection money as their number one priority. As for DT he has significantly underestimated the entrenched bureaucracy and duplicitous nature of his fellow politicians. That and a naive group of outsiders that he thought could move the needle quickly in DC. Jimmy Carter made the same mistakes! Garro on 7/19/2017 12:41:42 PM

Term Limits may also turn out like Committee Hearings..Know Limited Time ..Grandstanding would be the Norm..Possibly ..thing is we don't know mary Bartlett on 7/19/2017 3:56:50 PM

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