Leonardo Da Vinci was a curious guy.
Yes, he painted two of the most famous paintings in history — The Last Supper and the Mona Lisa — but he was just as much a man of science and engineering as he was an artist. By combining art with science and engineering, he was the true Renaissance Man before it was cool to be one. In an outstanding biography titled Leonardo Da Vinci, Walter Isaacson uses the 7,200 pages or so of Da Vinci's surviving notebooks to put a spotlight on his insatiable intellectual curiosity. Here are some random entries:
- Get the master of arithmetic to show you how to square a triangle.
- Get a master of hydraulics to tell you how to repair a lock, canal and mill in the Lombard manner.
- Get the measurement of the sun promised me by Maestro Giovanni Francese, the Frenchman.
- The width of the face is equal to the space between the mouth and the roots of the hair and is one-twelfth of the whole height.
- Describe the tongue of the woodpecker.
Who in the heck wants to know what the tongue of a woodpecker looks like? Da Vinci did.
Knowing what a woodpecker's tongue looks like may not help us in our day jobs, but being curious about what may happen in the macroeconomic world around us can.
We have focused a lot of our curiosity recently on the ultimate outcome of President Trump's economic agenda, i.e., lowering taxes and the regulatory burden of the business environment, better known as "Trumponomics." Read our ruminations on the topic here and here.
Our early concerns about getting nothing done proved to be unfounded. In his first year the President lowered taxes (by the way, we still think it is a bad deal, but better than no deal) and substantially reduced the regulatory burden. In fact, the chart below is an extraordinary example of real progress, showing the number of pages in the Federal Register by year. This register is the federal government’s daily journal in which all newly proposed rules are published along with final rules, executive orders and other agency notices. It provides a sense of the flow of new regulations issued during a given period and suggests how the regulatory burden will grow as Americans try to comply with the new mandates.
The number of pages declined by 35% in 2017! That is the biggest annual decline on record!
But again, our curiosity is aimed at the ultimate outcome of Trumponomics. Will it lead to an increase in the economy's potential? It’s impossible to know today, but there are ways to think about the "probable" outcome.
And to do that, we don't need to look any further than the folks creating business today.
The chart below shows that business owners continue to be optimistic about the future, even more so today than right after the election:
It is one thing to be optimistic, but it's another thing to actually spend money and reinvest back into corporate America. The chart below backs up the optimism with big-time intentions to invest in the near future:
Woodpecker tongues aside, it’s with a curious macroeconomic mind that we can think about what the future may look like. And, from our viewpoint, the future is looking pretty good right now.