Kudlow’s Money Politics

A Lot of Spirit, Not A Lot of Specifics

Spirits were high with a lot of good sound bites at the GOP debate last night. Attacking Hillary is great fun. And I guess attacking each other is the new sport. But there wasn’t much economic policy content.

I didn’t hear anything about what the candidates would do if the economy succumbs to recession. Nor did I hear anything about the subprime credit crunch, or how to help middle or lower middle income working folks who are threatened with mortgages they can’t afford. There are a lot of Reagan Democrats and Perot Independents in this group.

There were stirrings of an interesting Social Security debate, but there were no specific references to balancing the budget and solving long-term fiscal problems.

I still believe the candidates have to be more specific, particularly with the Ross Perot independent voters that walked away from the GOP last November. And I still don’t hear them reaching out to the investor class. This is a core GOP constituency shunned by Hillary.

Surprisingly, I didn’t hear much about pro-growth tax reform. Mike Huckabee and Duncan Hunter did briefly talk about jobs and wage inequality’”but both with a protectionist trade tilt that is troubling.

Hillary’s running an ad in Iowa and New Hampshire entitled, ‘Trap Door,’ stoking middle class anxieties on wages and healthcare. Rebuilding the middle class is her theme. She’s saying that widening income inequality has reached levels not seen since 1929, and that typical taxpayers have found their real income drop 2 percent between 2000 and 2005. Nonsense. This 1929 stuff is right out of Bill Clinton’s 1992 campaign playbook. And it’s just as ludicrous today as it was fifteen years ago. But Hillary is striking a raw nerve.

The GOP needs to rebut the phony statistics and respond to middle class anxiety. I do think part of Mike Huckabee’s rise in the polls can be attributed to him talking about this stuff, but so far I don’t like his solutions. They sound a lot like protectionism. His national sales tax, which he didn’t mention last night, is intriguing, though I am not persuaded. I still favor flat tax reform that would collapse and reduce middle income tax brackets to around 15 percent.

So, while I applaud the energy and wit on display during last night’s debate, I’m not sure the Republican candidates are making the sale. National Review’s Byron York is absolutely right, the GOP race is wide open.

Larry Kudlow — Larry Kudlow is CNBC’s senior contributor. His new book is JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

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