Co-authored with Stephen Moore, an economist at the Heritage Foundation.
Larry Kudlow | All Articles
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Larry Kudlow is a senior contributor on CNBC
Donald Trump’s landslide victory in the New York GOP primary was a game-changer. It ended his Wisconsin slump and set the stage for an across-the-board sweep next Tuesday in Pennsylvania, Maryland, Delaware, Connecticut, and Rhode Island.
Does the U.S. government want to help American business or not? Does the administration want to help middle-income wage earners or not? Does team Obama want to grow the American economy at its historic 3.5 percent long-term trend or not? Apparently, President Obama’s answer to all three questions is “no.”
Speaking before a packed audience at the prestigious Economic Club of New York, Fed chair Janet Yellen basically announced that there would be no rate hikes for quite some time -- maybe once before year end, maybe not. Her key point was that the global economy is worse today than it was in December, back when the Fed took its target rate up a quarter point. I think she’s right.
My friend Jonah Goldberg has written a column entitled “Conservative Purists Are Capitulating with Support of Trump.” In this piece, Jonah goes after me and Stephen Moore for allegedly giving up our free-market principles for what he calls “purely consequentialist reasons.” I am not sure of the full meaning of this phrase, but it sounds like we’ve changed our beliefs because Trump is the leading candidate in the GOP presidential race.
The good news is that the economy is growing at 2 percent and that there’s no recession in sight (barring a complete collapse of profits). The bad news is that the economy is growing at 2 percent. It’s been doing so for nearly 15 years under Democratic and Republican administrations.
In the week leading up to the New Hampshire primary, a few GOP candidates put forth a strong, positive, optimistic message of economic growth. Donald Trump did it, and it contributed to his landslide. John Kasich did it, and he surged to second place. Jeb Bush put his best growth foot forward, and he nearly took third place. Others, not so much, and their numbers sagged.
Most political reporters are fixated on the presidential horserace rather than the message candidates are sending to voters. Message wins all the time. Message moves polls. Message raises money. Message determines elections.
Early in the new year, on Sunday, January 3, Federal Reserve vice chair Stanley Fischer delivered a hawkish speech to the American Economic Association. Completely misreading the economy, which is woefully weak while inflation is virtually nil, Fischer strongly hinted that the Fed would be raising its target rate by a quarter of a percent every quarter for the next three years.
The speed of the news cycle and the media obsession with the presidential horseraces have crowded out a crucial development in the war on ISIS and related Islamic jihadist groups.
GE’s decision to leave Fairfield for Boston is another sad marker in the downhill slide brought about by Connecticut’s high-tax, high-regulation, anti-business policies of the last 25 years.
The Dow Jones lost over 1,000 points last week. It’s down 9 percent over the past year. The broader S&P 500 also got clobbered, and is down 7 percent in the past year.
By all accounts, ISIS is the wealthiest terrorist organization in the world. By far. In round numbers, ISIS is said to have a $2 billion stash, which is keeping it afloat. Most of it comes from oil sales. Much of it comes from plundered banking funds. And the rest of it comes from taxing locals, selling stolen antiquities, and kidnapping ransoms.
I know this is not my usual position. But this is a war. Therefore I have come to believe there should be no immigration or visa waivers until the U.S. adopts a completely new system to stop radical Islamic terrorists from entering the country. A wartime lockdown. And a big change in my thinking.
A 211,000 jobs increase for November will finally push the Fed over the line and into a quarter-of-a-point rate hike later this month. The question is, how much and how fast will the central bank raise its target rates?
If we want to destroy ISIS, we can destroy ISIS. Perhaps I am stating the obvious, but I want to state it anyway. Why? Because I am not hearing it enough.
The singular economic issue of our time is the quest for more rapid economic growth. In the past century the American economy grew at roughly 3.5 percent per year. That included huge booms and even worse busts, such as the Great Depression.
The Democratic presidential debate ironically took place the same week that a Princeton University professor was awarded the Nobel Prize for economics. Why ironic? Because Professor Angus Deaton is a strong advocate of economic growth. Today’s Democrats are not.
As of this writing House Ways and Means chairman Paul Ryan has not decided whether to run for speaker. He has been bombarded by all the Republican factions. Even Mitt Romney says the Wisconsinite can unify the Republican conference and take the job.