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Kudlow’s Money Politics

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

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

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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

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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.

 

Obama Is Crushing the Reagan Link, and Putin Knows It



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Across his remarkably successful presidency, Ronald Reagan repeatedly made the link between the U.S. economy and U.S. international security and defense. He consistently argued that weakness at home leads to weakness abroad.

Reagan was aiming at the dismal Carter years. But he understood for all times that economic strength at home sends a powerful signal for international security overseas.

Read my full column here.

 

Under the Good Jobs-Report Hood



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Good news for the American worker: Employment in June surged 288,000, with a 262,000 gain in the private sector, easily beating the consensus forecast of 215,000 new payrolls. This marks the fifth consecutive monthly increase of 200,000 or more jobs, the best five-month stretch since early 2006. As for the unemployment rate, it dropped from 6.3 to 6.1 percent.

But there were some important glitches in this good-news report.

Read my full column here.

Tags: Jobs

GOP: Just Say No to Ex-Im



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Why in the world would Congress want to reauthorize the Export-Import Bank? Known as “Bank of Boeing,” Ex-Im is the perfect example of corporate welfare, crony capitalism, fraud, and corruption.  

Get rid of it. It’s a government-sponsored menace that actually damages American business competitiveness and reduces jobs at home. Voting against Ex-Im should be a no-brainier.

Read my full column here.

Tags: Ex-Im

Steve Scalise, a Rising Conservative Star



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‘Reinvigorating the leadership” is how one senior House staffer described the ascendency of Steve Scalise, the Louisiana Republican who won a first-ballot victory for the position of GOP whip. The staffer went on to portray Scalise as not a member of the Washington establishment. Indeed, Scalise is a former chair of the Republican Study Committee (RSC), the conservative caucus in the U.S. House. He has had a meteoric rise, and he is someone to be reckoned with.

Scalise’s win follows Kevin McCarthy’s first-ballot victory for the GOP majority-leader slot. And here’s something I did not know: As whip, Scalise gets to appoint his chief deputy whip, a leadership position most recently held by Illinois Republican Peter Roskam (who lost out to Scalise for majority whip). So it could be, when all is said and done, that two conservative RSC members are part of the GOP leadership.

Read my full column here.

David Brat, Right on Free-Market Economics



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Listening to David Brat on election night, following his upset win over Eric Cantor in Virginia’s seventh congressional district, I heard a principled, free-market, pro-growth individual who is going to make an excellent Republican House member.

Mr. Brat, the Randolph-Macon economics professor, talked about pro-growth tax reform, spending limits, and entitlement reform. He wants to end the congressional bailout of Fannie Mae and Freddie Mac and return them to the private sector. He opposes corporate cronyism in Washington. He’ll have no more special favors for the K Street crowd. He emphasizes the importance of the rule of law and property rights, which are so essential to our free-market system.

In other words, Brat seems to be saying that free-market capitalism is the best path to prosperity. My kinda guy.

However, during the late stages of his primary campaign, Brat railed against immigration reform and hammered Cantor on the issue. On this subject, he’s not my kinda guy. He is violating his free-market economic principles.

Read my full column here.

Tags: 2014 , Immigration Reform

Reclaiming Reagan’s Economic Voice



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It was a positive May jobs report. And it’s good to see more Americans working. But there are still some serious warts in the jobs story. And overall economic growth is still trapped in a sub-par growth zone.

But what of the Republicans? Where are their growth policies? Alas, with some notable individual exceptions, I fail to see a united GOP growth message.

Read my full column here.

Tags: The Economy , GOP

Bernanke’s Loose Lips



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Are Ben Bernanke’s loose lips the real cause of surging stocks and plunging interest rates? Yes,he may have been the catalyst for the recent market rally. 

Read my full column here.

Blame Socialism, Not Shinseki



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The VA problem is not Shinseki, it’s socialism. The Veterans Affairs health-care system is completely government run. It is a pure single-payer program. National Review editor Rich Lowry calls it “an island of socialism in American health care.” He is right. I’ve been arguing this all week.

So perhaps Democrats and Republicans will get together to sack VA secretary Eric Shinseki. But that won’t change a thing. In fact, it’s a distraction.

Read my full column here

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