The economy is a hot issue in any season. In January this year, the Pew Research Institute conducted a survey of Americans’ top political priorities, with 73% of the 5,140 adults surveyed stating the economy was a top priority. This was the only issue that was mentioned by people leaning both Democrat and Republican.
While thousands of people state economy as a hot topic, many don’t fully understand what that means. Ernie Goss is a professor of economics at Creighton University Heider College of Business, where he holds the Jack MacAllister chair in regional economics. He produces monthly reports for The Rural Mainstreet Index, which gleans bankers’ insights about business conditions in 10 regional states, and the Mid-American Economy reports, a monthly index report. Goss also publishes a newsletter titled “Economic Trends,” which boasts more than 11,000 subscribers.
“I think he’s pretty level-headed,” said Chris Robinson, the managing director of agriculture and commodities at TJM Institutional Services. Robinson has worked with Goss as a presenter on the public television show “Market to Market,” most recently in July 2024. “He’s not extreme. He’s not a cheerleader, but he’s not a doom-and-gloom person, either, which is kind of refreshing today.”
B2B Omaha talked to Goss about a few key topics in economics this year and gleaned his thoughts and insights.
On the topic of inflation, Goss opined that both Democrats and Republicans had put forth faulty plans, stating that neither are considering policies and are instead focused on winning elections.
“In both cases, there’s one fairly certain outcome, and that is the national debt increases fairly significantly,” Goss averred.
The Democratic platform will increase the national debt by increasing spending, while the Republican platform will increase the national debt by raising tariffs and trade restrictions.
“Very bad policy, especially in this part of the country that depends heavily on agriculture and manufacturing,” Goss reflected. “We do not need trade barriers; we do not need increased tariffs, which restrict trade.”
On the flip side, the Republicans’ idea of reducing taxes isn’t necessarily a good thing.
“They reduced corporate tax rates, and, as a result, interestingly, corporate tax collections increased,” Goss said. “Keeping those tax rates are a good thing for the economy, but reducing the tax rate is not good. They aren’t trying to win the economy, they’re trying to win the election.”
Goss said that the economy isn’t doing as well as government officials claim. “Small businesses have been hit hard, and they continue to be hit hard,” he said. “The S&P 500 is dominated by about 10 companies, 10 stocks. Those have done well as far as stock prices. Those 490 other companies have not done well. Likewise, other, smaller businesses have not done well. It’s been a tough time. It’s a tough time for business owners. Looking ahead, many of those challenges will continue.”
He said those include overregulation, but that in June, business owners got a bit of relief, noting that the “Chevron case” was smartly decided. In June 2024, the Supreme Court ruled in this case that the courts should rely on their interpretation of ambiguous laws. This overturned the ruling in the 1984 decision that said that if Congress has not directly addressed the question at the center of a dispute, a court must uphold the agency’s interpretation of the statute. The new ruling gives the judges the power to interpret the laws.
Goss also mentioned that inflation would be a challenge to small businesses because of the continual increase of federal debt and overspending, no matter who is in office.
“As long as we accept it, we will get it,” Goss said. “We want more spending, but we want fewer taxes, that doesn’t work.”
Businesses should also be thinking about the lifetime gift state tax exemption that is getting cut in half in 2025. “There are significant tax consequences of leaving your businesses, and you either sell it or your children inherit it. There going to be significant tax issues, and valuation becomes very important. Farm ownership, particularly.”
While the gift taxes were not hugely on Goss’ radar, a different type of tax was of major concern to him.
“The Democrats are talking about a wealth tax,” Goss said. “The idea of taxing wealth and taxing on unrealized gains. Taxing gain that has not been realized is a huge issue. I don’t hear that being talked about right now.”
The issue is a problem, he said, because those people with the majority of the wealth in the nation right now are in the “Baby Boom” generation, the youngest of whom turn 60 this year. The wealth tax would put a 25% tax rate on those with assets over $100M. The accountability of this approach would get convoluted, as it depends on valuations of things such as wine collections and companies.
“There’s a requirement that you have to sell it to tax the gain,” Goss said. “You’ll get to tax the gains, but you don’t get to take the deductions.”
Goss comes across sometimes as anti-government, but he’s worked in several government-run organizations, including NASA, where, in the 1990s, he was working in a burgeoning technology known as artificial intelligence (AI).
“AI is being oversold,” Goss said. “There are going to be some huge job losses coming. Just like with the internet, it was oversold in that people thought it was going to change your life overnight. In businesses, certainly in large companies.”
Goss said the big issue with AI right now is not that it is here and will be used, but how it is going to be used. He said the biggest issue with it is implementation.
“In the short-term, effects will be negative,” Goss said. “Long-term, I see positives.”
He also noted that before investing in many things, from stocks to AI, he would be cautious.
Being cautious seemed to be Goss’ overall economic theme, but Robinson said that’s how and why he’s gotten the career, and reputation, he has.
“He looks at things very objectively,” Robinson said. “He’s pretty well thought of across the board on the political spectrums…As an economist, you want someone who is steady.”
To read more, visit creighton.edu/economicoutlook/newsletter.
This article originally appeared in the October/November 2024 issue of B2B Magazine. To receive the magazine, click here to subscribe.
