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Kudlow’s Money Politics

Larry Kudlow’s daily web log of matters political and financial.

Lower Oil and King Dollar Are Unambiguously Good



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We all know that the American energy revolution, led by the new technologies of hydraulic fracturing and horizontal drilling, has created a flood of new shale-oil and natural-gas production that has overwhelmed world markets and driven prices down by roughly 40 percent. End-of-week crude oil closed near $57 a barrel, and the national average gasoline price finished at $2.60.

No matter what the naysayers are trying to sell, the new energy reality is unambiguously good for the U.S. and global economies. There may be some dislocations among countries, sectors, or companies, but the overwhelming impact is positive.

But there is another important angle to this story: Looming behind the falling price of oil is the return of King Dollar.

Read my full column here.

Tags: Energy , U.S. Dollar

Lower Oil Prices Are a Free-Market Victory



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Seldom has so much good news been portrayed so negatively. Oil prices continue to fall in the U.S. and around the world, but near everyone in the media is grumpy about it. The headlines today are among the silliest I’ve seen: Energy-company stocks are declining, oil deflation is an economic threat, the Fed might raise rates much later than expected, OPEC is dissolving, shale companies are going bankrupt, Russia is going bankrupt(!), and on and on.

Well, most of this is just humbug. Lower oil prices are unambiguously positive.

Read my full column here.

Tags: The Economy , Energy

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What about the Brainiacs?



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Is this immigration game really worth the candle? I think not. And I say this as someone who is an immigration reformer, not a restrictionist.

The free movement of trade, capital, and labor is strongly pro-growth. History shows that legal immigration is good for America, economic growth, entrepreneurship, job creation, and hard-working families. America must remain a city on a hill, attracting the best and brightest from around the world — a beacon of freedom.

The trouble is, Obama’s executive actions not only usurp powers that are not his, they don’t really solve key immigration problems.

Mainly, not even Obama is attempting to increase visas (that are the purview of Congress). Therefore there’s no clear legal immigration process for the most important group: the high-tech brainiacs who are likely to be the entrepreneurial engines of new business start-ups and overall job-creating growth.

Read my full column here.

Tags: Immigration

Marriage Is Pro-Growth



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The greatest economic challenge of our time is how to restore economic growth. Over the past dozen years, average real growth has slowed to 1.8 percent annually, under both Republican and Democratic presidents and congresses. It’s a bipartisan problem.

And it’s a new one. For the past 50 years or so, the American economy grew at just less than 3.5 percent per year. But we’re now experiencing one of the longest slow-growth periods in the past 100 years. Excluding the Great Depression, I bet it is the longest slow-growth period in a century.

There are any number of fiscal and monetary prescriptions for restoring economic growth. As a Reagan supply-sider, I would recommend lower marginal tax rates, lighter regulations, limited government, and a sound dollar.

But I want to add this to the list: marriage. I have come to believe that marriage is a key element of a stronger economy. 

Read my full column here

Prescription for a Stronger Economy: Marriage



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I spoke at the Calvin Coolidge Memorial Foundation dinner last week.  Nationally syndicated columnist Cal Thomas wrote this column about my remarks:

At a dinner sponsored by the Calvin Coolidge Memorial Foundation last Thursday (I am an unpaid national advisory board member), there was a debate about wealth redistribution. A team of Canadian students who think government should “spread the wealth around” faced off against a team of American students who think government has no business doing any such thing.

The theme continued when former Sen. Phil Gramm, Texas Republican, debated Chrystia Freeland, a member of the Canadian Parliament. While all of this was informative, civil, interesting and at times entertaining, the final speaker, CNBC commentator Larry Kudlow, may have uttered the most profound thought of the evening.

While Mr. Kudlow takes the traditional conservative position when it comes to economics, he said what would help individuals as well as the nation the most is for people to “get married.” He said it loudly, and the super-sophisticated New Yorkers in the room fell momentarily silent. When the shock wore off, many heads began to nod. 

Mr. Kudlow’s point was that marriage gives people a reason to work, a home one hopes is stable, and children for whom two parents feel responsible.

Sociologists have reached the same conclusion over many years. In her book “One Marriage Under God: The Campaign To Promote Marriage in America,” sociologist Melanie Heath writes, “Married people” — for whatever reason — “are happier, healthier, and better off financially.”

The point I took from the speakers at the Coolidge dinner was that the real power to influence a life does not lie in or emanate from Washington, D.C., whichever party is in power. Instead, it comes from the millions of personal decisions each person makes for his or her own life.

How many politicians today would dare to admonish people who are living together to get married? Yet for not just economic reasons, doesn’t it seem the wisest course for most to take when one considers the benefits? Cohabiters may look at their divorced parents as an excuse not to marry, but that is an excuse, not a sufficient reason. One might better consider successful marriages, instead of failed ones, and emulate what made the good ones work.

At the Coolidge dinner, the organization’s chairman, Amity Shlaes, passed out buttons that said “Coolidge in ‘16.” Although the 30th president died in 1933, his ideas and philosophy of life are being given new life by events like these. If his ideas worked — and Coolidge’s did because they were born from a Puritan ethic that founded and sustained America well into the 20th century, making the 1920s roar economically — why not reconsider those ideas, updating them as necessary and applying them to solve today’s problems, rather than skipping from one failed policy to another?

Back to marriage. The Coolidges had an unusual relationship, but it worked for them. Grace was vivacious and outgoing; her husband quite the opposite. And yet there was genuine love.

Few men have ever uttered more noble words about their wives than what Coolidge said of his: “She has borne with my infirmities, and I have rejoiced in her graces.”

Mr. Kudlow seemed to be suggesting — and I would agree with him — that you don’t get that kind of affirmation outside of a committed marital relationship, which also makes for stronger families, economies and nations.

– Cal Thomas is a nationally syndicated columnist. His latest book is What Works: Common Sense Solutions for a Stronger America (Zondervan, 2014).

Tags: marriage

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For 2016, Hillary Had the Worst Night



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We all know the Republican midterm landslide was largely a repudiation of President Obama’s policies and his handling of the job of chief executive. And of course, we don’t know who will succeed him in 2016. But buried deep inside Tuesday’s exit polls is a series of numbers on presidential contenders that will blow your mind. It’s completely different from most anything you’ve seen in the newspapers, the Internet, or on TV.

Get this. Here’s a stunning question and answer from Edison Research, which interviewed 18,000 voters around the country as they left the polls on November 4:

Do you think Hillary Clinton would make a good president?
Yes: 42 percent. No: 52 percent.

Read my full column here

Tags: 2016

A Return to the JFK-Reagan Economic Model



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Election Day will produce a new Republican Congress, or so the latest polls tell us. If so, the huge losses for the Obama Democrats — both in 2010 and this year — will have come in large measure from the economic failures of a party that has moved radically left over the past 20 years.

A Republican victory on Tuesday won’t change this. But the GOP can make an early start on free-market energy reforms, lower corporate tax rates, holding back the regulatory tide, and knocking down some Obamacare tax hikes. Republicans can also continue the war on overspending. Since the GOP landslide in 2010, government spending as a share of GDP plunged from 24.4 percent to 20.3 percent. This has had something of a tax-cut effect, and shows what Congress can do if it has a mind to do it.

But the bigger theme is the need for the U.S. and the world to return to the free-market, free-trade, entrepreneurial, supply-side, tax-incentive model of growth with stable money. That model worked during the Coolidge-Mellon 1920s, the JFK 1960s, the Reagan 1980s, and the Clinton 1990s.

Read my full column here.

Tags: 2014

The Optimistic GOP Story Everyone Is Missing



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The vast majority of political journalists — and I include some of my conservative colleagues — are missing a very big story.

The Republicans are going to recapture the Senate, picking up more seats than most any forecaster expects. And the House GOP is going to add to its majority. But then comes the big story: The beginning of a new conservative revolution. 

Read my full column here

Tags: 2014

Lower Oil Prices Are Unambiguously Good



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Steep stock market corrections often create shrouds of pessimism that do bad things to people’s brainpower. And one of the absolutely stupidest things I have heard in recent weeks is that the recent drop in oil prices is bad. You heard me right. Serious people on financial television are saying lower oil prices are a signal of worldwide economic collapse. Here at home that translates to recession, deflation, a profits collapse, and rising unemployment.

I’ve been around for a while, and I’ve seldom heard such gibberish. 

Read my full column here.

Tags: The Economy , Energy

How about a Little Optimism?



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Stocks are way overdue for a correction. In a volatile week, the Dow lost 466 points and the S&P 500 dropped 3.1 percent. But even with that, the broad index is up 3.1 percent year to date. So it’s not a disaster. Corrections come and go.

And I agree with Warren Buffett — not with his tax-hike wishes, but with his market call that investors should buy the dip. And not just because a Republican Senate is coming. And not just because a new Republican Congress will quickly put a Keystone Pipeline bill and a real corporate tax cut on Obama’s desk. But also because the economic fundamentals look okay. 

Read my full column here

Tags: The Economy

None Can Call It Treason



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Last week, at the People’s Climate March in New York, Robert F. Kennedy, Jr. accused the Koch brothers of polluting our atmosphere. He said, “Do I think the Koch brothers are treasonous? Yes, I do.” He added, “I think they should be enjoying three hots and a cot at The Hague with all the other war criminals.”

Treason? 

Read my full column here.

Tags: People

The Return of King Dollar



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Maybe the U.S. economy, a weakling for the last six years, is finally starting to flex some muscle. We’re referring to the return of King Dollar.

For those who haven’t been paying attention, the greenback is in the midst of a rally not seen since the 1990s. It’s racing past the euro, the yen, and other currencies. Investors worldwide are buying the equivalent of stock in America, Inc.

If the rise in the dollar’s valuation is sustainable, it’s welcome news for the stock market, for fighting inflation, and for U.S. growth prospects. Ronald Reagan said it best: A strong dollar is a sign of a strong America.

Read my full column, authored with Steve Moore, here.

Tags: The Economy

Support Obama’s New ISIS Plan



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I know he’s made a million mistakes. And I have opposed nearly all his domestic and international policies. But after watching Obama’s intense ISIS speech Wednesday night, and reading the text several times, I think the president basically — finally — got it right.

I support him. My best advice to Republicans and Democrats is to support the president’s new ISIS campaign.

Read my full column here.

Tags: Islamic State

A Bold and Optimistic GOP Can Create a Wave Election



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If the Republican party adopts a clear, optimistic, growth-and-reform message to turn America around, it can win big in November. It could still be a wave election.

But so far it hasn’t done it. The party is essentially asking voters to give it control of both houses of Congress. Yet it hasn’t told voters what it would do with such a mandate.

That’s why the GOP must present a true governing agenda. You can’t ask for two-house support without telling voters what you’re going to do with it. 

Read my full column here

Tags: 2014

The Obama Bank Shakedown



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The $16.65 billion settlement by Bank of America over financial-crisis-era mortgage securities “highlights a pattern of the government extorting the banks,” Dick Kovacevich said on CNBC this week. (Italics mine.) Kovacevich is the former Wells Fargo chairman and CEO. I’ve known him for years. He ran a great bank. He kept Wells Fargo clean during the credit meltdown. And unusual for a big-bank CEO, he strongly supports free-market principles.  

Kovacevich went on to say, “It’s definitely politics. It has nothing to do with justice or restitution to the innocent victims. In fact, more of the money is going to the coffers of the states and various departments than the victims.” He then concluded, “Why are we charging the stockholders instead of going after the people who did wrong? Corporations don’t engage in criminal behavior. People do.”

Kovacevich is right on target. These huge bank settlements are election-year ATMs for the Obama administration. It was $12 billion for JP Morgan, another $7 billion for Citigroup, and on and on. It’s a real shakedown.

Read my full column here

Tags: Financial Crisis

Governor Perry Still Looks Strong



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The so-called “abuse of power” indictment of Texas governor Rick Perry is not only not going to hurt him in the 2016 GOP sweepstakes, it might actually help him. I say that because Perry immediately fired back at the charges with no hesitation, labeling the indictment the partisan political ploy that it really is. And in terms of threatening to veto legislation that would have funded the state’s Public Integrity Unit, run by Travis County district attorney Rosemary Lehmberg, Perry held his Texas constitutional ground. In a number of TV appearances, Perry not only said that he was legally authorized to defund the DA, but that he would do it all over again if he had the chance.

Read my full column here.

Tags: 2016

Secular Stagnation Is a Cover-Up



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John F. Kennedy campaigned for president in 1960 by belittling Dwight Eisenhower’s three recessions and declaring, “We can do bettah.” He was right. In the 1960s, after the Kennedy tax cuts were implemented, prosperity returned, the economy grew by almost 4 percent annually, unemployment sank to record lows, and a gold-linked dollar held down inflation.

But today many leading economists are throwing up their arms in frustration and assuring us that 2 percent growth is really the best we can do.

Barack Obama’s former chief economist Larry Summers began this chant of “secular stagnation.” Don’t buy it.

Read my full column, authored with Stephen Moore, here.

Tags: The Economy

Lower Benefits, Higher Jobs



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Neel Kashkari, the Republican candidate for governor of California, just recounted in the Wall Street Journal his week on the streets of Fresno posing as a homeless man looking for work. At the end of his op-ed, Kashkari lamented that he didn’t need a higher minimum wage, paid sick leave, or a health-care plan. What he needed was a job.

And Kashkari made the important point that all those government benefits, especially extended unemployment benefits, are work disincentives that may actually block job creation.

Read my full column here

Tags: The Economy

Where Is the GOP’s Better Deal?



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Businesses created over 200,000 new jobs for the sixth straight month. Second-quarter GDP rebounded by 4 percent from the winter-weather doldrums. And the ISM manufacturing report exceeded all expectations, with big gains in new orders and employment.

So on the surface the economy is looking better. And as a result, the Federal Reserve is on the cusp of a new and less-stimulative policy cycle — which is a big reason why stocks sold off this week. A lot of investors are wondering what happens when the Fed takes its foot off the accelerator. Will burdensome tax and regulatory policies prevent any sort of economic breakout?

But let me throw in another uncertainty: politics. What is the Republican response to all this?

Yes, the GOP is favored to win the Senate. But I wouldn’t be so confident. Polling shows many key races are up for grabs. The numbers are close.

And here’s what I see as a big part of the problem: Instead of putting forth a clear growth message — like a new Contract with America — congressional Republicans this week voted for a lawsuit challenging President Obama’s abuse of executive power.

Read my full column here.

What if Obama Defended American Business?



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Just for once, wouldn’t it be great if President Obama actually defended American business, instead of attacking it?

Just once?

Wouldn’t it be great if Obama acknowledged that U.S. firms are overburdened by the highest corporate tax rate among developed countries, and as a result are becoming less and less competitive?

Wouldn’t it be great if he said he wants to fix this tax imbalance in order to grow the economy faster and give U.S. businesses a leg up on the global scene?

Couldn’t he just say that?

Read my full column here.

 

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