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Kudlow’s Money Politics

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

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.

 

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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.

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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

Immigration Reform Is Pro-Growth and Pro-GOP



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If the GOP is to recapture the Senate come November, and move on to retake the presidency in 2016, it must have a strong pro-growth message. Jobs and the economy are going to be key issues. Tax reform, regulatory rollbacks, and a rewriting of Obamacare that ends the mandates and provides real health-care freedom to choose are vital points.

But so is the immigration issue. Not only because it is pro-growth, but because the Republican party must return to its Big Tent roots.

Read my full column here.

Tags: Immigration Reform

Game-Changer Jobs Report?



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Even with all the political slicing and dicing that accompany these big reports, the April employment survey was a lot stronger than virtually anyone expected. But Democrats should stop jumping in the air and clicking their heels. There are too many part-time workers, long-term unemployed, and labor-market dropouts to validate the significance of a 6.3 percent unemployment rate. The newspaper headlines tout falling unemployment, but ordinary folks on Main Street don’t really feel it.

Read my full column here.

Tags: Jobs

Anti-Business Obama Strikes Again



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When President Obama holds back approval of the Keystone pipeline, for the umpteenth time, it’s bad enough that he’s politically pandering to Tom Steyer, the hedge-fund billionaire and manic radical opponent of fossil fuels. If he gives in to Steyer by blocking the pipeline, Steyer gives $100 million to Democratic candidates this fall.

Obama’s transparent political cynicism is incredible. But it’s more than that. It shows his disregard for jobs and economic growth for blue-collar union workers who used to be Democrats. It shows his utter disregard for our loyal Canadian ally up north. And it sends the wrong signal to Vladimir Putin, who probably believes the U.S. will not undermine Russia with energy independence and oil and gas exports while Obama is in office.

But perhaps most of all, Obama’s Keystone veto sends a message to American business that he just doesn’t care.

Read my full column here.

 

Tags: The Economy

Yellen’s Low-flation Nonsense



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Will somebody please explain to me how rising inflation is somehow going to extricate us from the tepid economic recovery? I don’t get it.

It used to be hypothesized that low inflation was the key to high economic growth. For everybody in the economy, low inflation was a tax cut. Conversely, rapidly rising prices were thought to penalize the economy by placing a tax-hike effect on investors, businesses, and families. It was this logic that spurred Paul Volcker (especially) and then Alan Greenspan to labor mightily in the 1980s and 1990s to bring inflation down.

The Fed’s favorite inflation measure — the personal consumption deflator — has risen about 1 percent over the past year, as has the consumer price index. When I grew up professionally in the 1970s, first as a New York Fed staffer and then as a Wall Street economist, no one — and I mean no one in their right mind — would ever have dreamed that double-digit inflation could be brought down to 1 percent. But Janet Yellen is now telling us that low inflation is a sign, and perhaps even a cause, of the weak economy.

Read my full column here

Tags: Monetary Policy

Charles Koch Fights Back



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Is it too farfetched to connect the dots between a brilliant Wall Street Journal op-ed by Charles Koch, the chairman and CEO of Koch Industries, and the continued sluggish recovery in jobs, business investment, and the overall economy? I don’t think so.

In his piece, Mr. Koch seems to make a plea for a big dose of free-market capitalism. He argues, “The central belief and fatal conceit of the current administration is that you are incapable of running your own life, but those in power are capable of running it for you. This is the essence of big government and collectivism.”

Charles Koch and his brother David have been vilified by the left for fighting hard to get political candidates with free-market points of view elected. Protected by U.S. Senate rules against libel, Democratic Majority Leader Harry Reid has called the Kochs virtually every name in the book — including “un-American.” But now the Kochs are fighting back. And I hope they do more of it. 

Read my full column here

Thanks and Gratitude



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The following is an excerpt from the final episode of The Kudlow Report, which aired last Friday. It’s a thank-you note to a great network, wonderful colleagues, and the best audience a person could ask for. I truly am blessed:

Let me just take a moment and say a few words of thanks and gratitude and humility. To all the viewers and well wishers who have e-mailed and tweeted so beautifully and wonderfully, I am humbled . . .

It’s been my honor to host this show for the past nine years; before that with my great pal Jim Cramer for three years. And let me say how wonderful Jimmy was when he came on last night.

Now you know my credo: Free-market capitalism is the best path to prosperity. And let me add to that from our Founding Fathers: Our Creator endowed us with the inalienable rights to life, liberty, and the pursuit of happiness. In other words, freedom. Freedom to work, invest, and take risks, and the freedom to get rewards and incentives that motivate us all. It is freedom that makes this the greatest country in the world. And it is freedom that so frequently keeps me on the optimistic side of life.

Down through the years we’ve always tried to represent all points of view on this show. Left, right, and center. And in what I hope was a civil and respectful way, I have tried to listen and learn and debate both my liberal and my conservative friends. Civil discourse on the issues of the day is what we always tried to do — and salted with some financial-market advice, which I sometimes got right and sometimes got wrong.

I’m also proud to have recruited some of the best minds to be our expert guests. Many of them had never been seen on television before. Now they are going on to their own bright careers, and it makes me proud.

And finally, I want to thank this network — not only for the privilege of hosting this show, but for giving me a second chance in life that resulted in a new career. This from a guy who nearly 20 years ago was completely shipwrecked on a sea of hopeless alcohol and drug abuse. I went away for a long time. And with the help of many people I learned to replace addiction with faith. And it is that faith that guides me every day.

Again, let me thank all the viewers who have stayed with me down through the years, and all who have wished me well. I am truly grateful. And I will be beginning a new chapter as a senior contributor here at CNBC. It is the place where I call home.

And to all of you out there, as always, thank you, and God bless you. . . . I am a blessed person.

Deflating Russia Can Be Done



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President Obama has ramped up his second round of economic and financial sanctions on Russia, and on Vladimir Putin in particular. Some of this is already working. But if anybody believes it will be easy to financially deflate Russia, they better think again. 

Read my full column here

Republicans Hammer Away on the Growth Theme



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Sizing up last week’s unexpected congressional win by Florida Republican David Jolly, Kim Strassel of the Wall Street Journal wrote, “The Republicans who win this fall will be those who have serious answers to the attacks leveled on them — about Obamacare, the economy, women’s and seniors’ issues.” Sound advice.

A few weeks earlier, pollsters John and Jim McLaughlin argued that to win big in November, the GOP cannot rely on Obamacare alone, unpopular as it is. More sound advice.

In particular, there must be a growth platform, aimed especially at the middle class, which continues to suffer in the fifth year of the so-called recovery with real median income dropping by 4 percent and broad-based unemployment measured at roughly 12.5 percent. Believe it or not, a new Wall Street Journal poll shows that a large majority of Americans still think we’re in a recession.

So the challenge for the GOP is to drill home the old Ronald Reagan point that Republicans can increase take-home pay, or after-tax income. 

Read my full column here.

Tags: The Economy , 2014 Midterms

Bitcoin Is Not Real Money



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Just before the bankruptcy of the Mt. Gox bitcoin digital-money (or virtual-currency) exchange, Japanese finance minister Taro Aso predicted the inevitable failure. “No one recognizes them as a real currency,” he told reporters. “I expected such a thing to collapse.”

I totally agree with Mr. Aso. For weeks and weeks I have been tweeting and broadcasting that bitcoin is not real money. It is not a reliable medium of exchange, nor is it a reliable store of value. It has no central-bank regulation, network operations, or even centralized issuance. And because of its wild price fluctuations, bitcoin can never be a reliable payment system. 

Read my full column here

Tags: Economics

A Three-Year Obamacare Moratorium



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Slowly but surely President Obama is unwinding, rolling back, and even cancelling his very own Obamacare. A couple of years ago he told Republicans not to mess with his plan. He said he’d veto any changes. But now, in substantial ways, he’s messing with his own plan.

By various counts, the president has made 25 to 30 key changes to the Affordable Care Act. They all violate the legislation passed in 2010. Many believe Obama’s executive actions are unlawful or unconstitutional. Whatever the case, at this rate, there may not be much if any Obamacare in the next couple of years.

So why don’t the Republicans make this official?

Read my full column here

Janet Yellen’s Problem



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Stock markets cheered Janet Yellen’s maiden congressional testimony this past week, as the new Fed chair emphasized the word “continuity” and offered no boat-rocking surprises. Continuity? I assume she means a steady diet of tapered bond purchases that will lead to the end of QE3 this autumn. In other words, investors seemed to think QE has run its course, probably overstayed its welcome, and that it’s time the Fed got out of the bond-buying business, since that policy isn’t doing much good and may be doing harm.

Ever the Keynesian who subscribes to the non-existent, long-term trade-off between employment and inflation, Ms. Yellen did express worries about long-term layoffs and the shrinking size of the labor-participation rate. She’s right about that. The labor situation is subpar.

The employment-to-population ratio is only 58.5 percent, way below its year-2000 peak of 65 percent. The participation rate is a low 62.8 percent, way below its modern average. The Joint Economic Committee estimates that jobs are 4.5 million below the employment trend line since 1960, and 7 million below Ronald Reagan’s recovery rate. And average monthly private-payroll increases are only 178,000 in Obama’s recovery. Compare that with the Reagan monthly rate of 330,000.

So Yellen is right to be worried about jobs. But she’s wrong to think the Fed can do much about this. 

Read my full column here

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