Politics & Policy

The Hillary Recession

Hillary Clinton celebrates at the DNC, August 28, 2016. (Mike Segar/Reuters)
Trump knows you can’t tax your way into prosperity.

This economy may be perilously close to recession. That was the message of the second-quarter real-GDP report and its meager 1.2 percent growth rate.

Over the past year, real GDP has slipped to a paltry 1.2 percent. Business investment continues to fall. Building and factory construction has dropped sharply. Productivity is flat. The profits recession is still in force.

And what’s the Hillary Clinton plan? Tax us into prosperity.

In her own words at the DNC on Thursday night, this is the fix: “Wall Street, corporations, and the super-rich are going to start paying their fair share of taxes.” Why? “Not because we resent success. [!] Because when more than 90 percent of gains have gone to the top 1 percent, that’s where the money is.”

Let me get this right. In order to spur growth, Hillary intends to raise taxes on individuals, businesses, capital gains, stock trading, and firms that move overseas (which they do because the U.S. has the most uncompetitive tax system in the corporate world). In addition, Hillary’s door is open for a carbon tax, higher payroll taxes, and a 25 percent gun tax.  

She also argued in Philadelphia that the economy is not working the way it should because our democracy isn’t working the way it should.

Huh?

What she’s getting at is appointing Supreme Court justices who “will get money out of politics” and passing “a constitutional amendment to overturn Citizens United.”

Citizens United removed spending limits for super-PACs. And yet those mean and nasty super-PACs have thus far benefited from pro-Hillary hedge-fund contributions to the tune of $48.5 million, according to the Wall Street Journal.

Donald Trump, on the other hand, has received only $19,000 from hedge funds.

Get it? Citizens United, according to Hillary, is the source of our weak recovery and must be overturned. Meanwhile, she is the big beneficiary of the Supreme Court decision to allow unlimited political donations.

Next there are the recurring themes of class warfare and inequality, roots of evil according to Hillary. Turns out that the top 1 percent received a big share of income growth during the recovery. Okay, but it also suffered the biggest loss during the Great Recession.

Research from Scott Winship of the Manhattan Institute shows that during the recession, the top 1 percent lost 36 percent of its income while the bottom 90 percent lost 12 percent. And through 2014, the top 1 percent was still poorer by 18 percent than it was in 2000. That’s compared to a 9 percent decline for the rest of us.

According to Winship, income for the top 1 percenters was basically no higher in 2014 than in 2000. Turns out that group bumped into the same income stagnation suffered by the U.S. middle class since 2000.

And according to new studies by Aparna Mathur of AEI, raising top marginal tax rates reduces growth incentives and yields very few revenues. Yet in addition to higher tax rates, Hillary wants $1 trillion in new spending programs.

The numbers also don’t add up for Obama, who defended his so-called recovery at the DNC and even called Hillary, a 30-year member of the establishment, a change-maker.

Obama’s seven-year recovery averaged 2.1 percent real growth at an annualized rate. For historical comparison, after seven years, JFK’s economy increased by 5.4 percent yearly and Reagan’s by 4.5 percent.

Did JFK and Reagan beget long booms by raising taxes? No. They cut tax rates across the board.

Hillary is a combination of Barack Obama 3.0 and Bernie Sanders 2.0. This is not change. This will not yield strong growth, lift jobs and wages, and make America more globally competitive.

#related#A week prior to the DNC Donald Trump offered a different perspective at the RNC: “America is one of the highest-taxed nations in the world. Reducing taxes will cause new companies and new jobs to come roaring back into our country. Then we are going to deal with the issue of regulation, one of the greatest job-killers overall. . . . We are going to lift restrictions on the production of American energy. . . . With these new economic policies, trillions of dollars will start flowing into our country.”

So Trump wants to reduce tax rates and regulations, unleash energy, and make America the most hospitable investment destination in the world. Hillary wants to raise taxes, regulations, and spending, and put the energy sector out of business. (She would abolish coal and oil-and-gas fracking.)

No wonder the blue-collar, hard-hat, Democratic middle class is going for Trump.

Hillary is not an agent of change. Nor does she have any idea how to restore rapid economic growth. Instead, she is a prisoner of the Left. Tax the rich, inequality, redistribution.

If Trump stays on his growth message, he’ll whup her in November.

Larry Kudlow is the author of JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

Most Popular

U.S.

Men Literally Died for That Flag, You Idiots

The American flag’s place in our culture is beginning to look less unassailable. The symbol itself is under attack, as we’ve seen with Nike dumping a shoe design featuring an early American flag, Megan Rapinoe defending her national-anthem protests (she says she will never sing the song again), and ... Read More
Books

The Plot against Kavanaugh

Justice on Trial, by Mollie Hemingway and Carrie Severino (Regnery,  256 pp., $28.99) The nomination and confirmation of Brett Kavanaugh to the Supreme Court was the political event of 2018, though not for the reasons anyone expected. All High Court confirmations these days are fraught with emotion and tumult ... Read More
Politics & Policy

He Just Can’t Help Himself

By Saturday, the long-simmering fight between Nancy Pelosi and her allies on one side and the “squad” associated with Alexandria Ocasio-Cortez on the other had risen to an angrier and more destructive level at the Netroots Nation conference. Representative Ayanna Pressley, an African-American Massachusetts ... Read More
Politics & Policy

Ilhan Omar Is Completely Assimilated

Beto O’Rourke, the losing Texas Senate candidate who bootstrapped his way into becoming a losing presidential candidate, had a message for refugees who had come to America: Your new country is a hellhole. The former congressman told a roundtable of refugees and immigrants in Nashville, Tenn., last week: ... Read More
White House

On Gratitude and Immigration

Like both Rich and David, I consider it flatly inappropriate for the president of the United States to be telling Americans -- rhetorically or otherwise -- to “go back where you came from.” In consequence, you will find no defense of the president from me, either. What Trump tweeted over the weekend was ... Read More
Sports

We All Wanted to Love the Women’s Soccer Team

For the first time in my life, I did not root for an American team. Whatever the sport, I have always rooted American. And if those who called in to my radio show were representative of my audience, many millions of Americans made the same sad choice. It takes a lot for people like me not to root for an ... Read More
U.S.

The ‘Squad’ Gives a Gift to Donald Trump

On Sunday, Donald Trump gave the Democrats a gift -- comments that indicate he thinks native-born congresswomen he detests should “go back” to the countries of their ancestors. On Monday, the four congresswomen handed Trump a gift in return, managing to respond to the president’s insults in some of the most ... Read More