Opinion

The GOP needs a bolder growth message

Photo of Larry Kudlow
Larry Kudlow
Senior Contributor, CNBC

How about this? Get rid of special tax deductions, corporate welfare subsidies and cronyism. Overthrow the political establishment in Washington.

What’s really driving today’s better economy is the resilience of America’s free-market capitalist system. In spite of the future threats from excess tax and regulatory actions coming out of Washington, the self-correcting American economy is in fact improving.

And that’s going to make defeating Obama tougher. Face it. That’s the reality.

Here’s another point: With better jobs, consumer incomes and spending power are actually rising about 5 percent annually right now. Corporate profits at 13 percent of GDP are the highest since 1950. And both companies and households have deleveraged substantially. So the economy could grow by 3 percent in 2012. And if Europe ever settles down, that could turn out to be a 4 percent growth rate with 2 percent or less inflation.

So just complaining about the economy is not a good GOP message. Better to focus more on a re-elected Obama who will raise tax rates on entrepreneurs and successful earners and regulate businesses more heavily (that’s what the NLRB and Consumer Financial Protection Bureau flap is really about). Argue against redistribution, and in favor of opportunity and growth.

The GOP message has to be “We can do this better.” Growth at 2.5 percent with 8 percent unemployment should be replaced with 5 percent growth and 5 percent unemployment. Say that. And then say: Here’s how we will do it.

Larry Kudlow is the host of CNBC’s “The Kudlow Report.”