Larry Kudlow’s Advice to President Romney
Despite the fact he appears on one of the NBC alphabet soup networks, Larry Kudlow is a smart man.
He’s smart enough to offer a devastating one paragraph take down of President Obama’s economic programs:
Real GDP in the second quarter stalled at 2.2 percent. There were a paltry 115,000 new jobs in April. The labor force shrank by 342,000 for the month, and the 63.6 percent labor-force participation rate is now the lowest since 1981. There are roughly 23 million people classified as either unemployed, underemployed, or no-longer-looking. And median household income has dropped by $4,300 during Obama’s time in office. This all adds up to a tough indictment of the administration’s economic policies.
So how does a condemnation of the failed Obama policies translate to advice for Mitt Romney? It’s easy: don’t do what Obama did.
What the Obama Administration did was to try and pick winners and losers an extent unobserved since the central planners of the former Soviet Union. Forward!
Such picks all ended up being boat anchors on the U.S. economy and when combined with growth and proliferation in transfer programs like “Medicaid, Social Security, disability, food stamps, and extended unemployment benefits,” helped bring about the worst recovery ever. (Kudlow actually assigns credit for the transfer program observation to professors Casey Mulligan and Ed Lazear, but the advice to candidate Romney remains the same: don’t to what Obama did.)
There’s also a bit of to-do advice:
So while Mr. Romney is out there campaigning on free-enterprise principles to grow the economy, he might pay some attention to specific investor-related issues. In particular, he should pledge to keep the same low 15 percent tax rates on capital gains (which Obama wants to double) and dividends (which Obama wants to triple). Also, tax rates on estates and inheritances will go up if Obama is reelected. Romney might want to mention that, too.
The fundamental difference should be framed as this: the Obama White House needs money to pick winners and losers. A Romney White House would allow America to pick its winners and losers.
Or for the investment class, how about this: it’s your money and you need to keep it now.