Columnist.
It's too easy to label President Obama's State of the Union as more tax-the-rich and redistribution. We know that. Rather than name-calling, Republicans must draw a clear line in the sand between their worldview and Obama's. I'd call that line commonsense economics. First, you can't create a new business or sustain an existing one without the seed corn and nourishment of capital investment. Second, only businesses create jobs. You can't have a job without a business. Third, jobs create all incomes, including middle-class incomes.
"Let's be honest here. Islam has a problem." Those are key sentences in an incredibly hard-hitting speech that Louisiana Gov. Bobby Jindal will give in London on Monday. It is the toughest speech I have read on the whole issue of Islamic radicalism and its destructive, murdering, barbarous ways that are upsetting the entire world. Early in the speech Jindal says he's not going to be politically correct. And he uses the term "radical Islamists" without hesitation, placing much of the blame for the Paris murders and all radical Islamist terrorism on a refusal of Muslim leaders to denounce these acts.
What can Sen. Bob Corker be thinking? On his first Sunday-news-show appearance of the year, right at the beginning of a new Republican Senate era, does Corker communicate a new GOP message of growth and reform? Does he talk about business and personal tax reduction that might rejuvenate start-ups, higher wages and job-creation? Does he talk about rolling back Obamacare or regulations in general? Does he discuss sensible immigration reform, including border security? Free-trade promotion that will help consumers and businesses? Education reform? The Keystone pipeline? No. His first Republican message is: Raise the federal gasoline tax. He said this on Fox News Sunday and he repeated it on CNBC the next day.
Politics and the economy are both looking up. President Obama's big-government spending, planning and executive-branch overreach were crushed at the polls. Elections matter. The GOP has been rejuvenated. Republican governors will lead the way. And the Republican majorities in the House and Senate haven't been this big since the 1920s. They know what to do -- develop a positive agenda: Pro-growth tax reform and spending limits. Pro-energy. Pro-King Dollar and Fed monetary reform. Pro-health-care choice. Pro-immigration reform. Pro-marriage. Pro-family. An American renaissance is in the making. Let the GOP put its best policy foot forward. If Obama vetoes the growth reforms, so be it. The 2016 agenda will be set for a Republican presidential victory.
We all know that the American energy revolution, led by the new technologies of hydraulic fracturing and horizontal drilling, has created a flood of new shale-oil and natural-gas production that has overwhelmed world markets and driven prices down by roughly 40 percent. End-of-week crude oil closed near $57 a barrel, and the national average gasoline price finished at $2.60. No matter what the naysayers are trying to sell, the new energy reality is unambiguously good for the U.S. and global economies. There may be some dislocations among countries, sectors or companies, but the overwhelming impact is positive. In fact, the U.S. economy is already getting better. Recent numbers on jobs, retail sales, consumer confidence, small-business confidence, ISM's, and business investment point to a 3 percent growth rate rather than the tepid 2 percent pace of the prior five years.
Seldom has so much good news been portrayed so negatively. Oil prices continue to fall in the U.S. and around the world, but nearly everyone in the media is grumpy about it. The headlines today are among the silliest I've seen: Energy-company stocks are declining, oil deflation is an economic threat, the Fed might raise rates much later than expected, OPEC is dissolving, shale companies are going bankrupt, Russia is going bankrupt(!), and on and on. Well, most of this is just humbug. Lower oil prices are unambiguously positive.
Is this immigration game really worth the candle? I think not. And I say this as someone who is an immigration reformer, not a restrictionist. The free movement of trade, capital and labor is strongly pro-growth. History shows that legal immigration is good for America, economic growth, entrepreneurship, job creation and hard-working families. America must remain a city on a hill, attracting the best and brightest from around the world -- a beacon of freedom. The trouble is, Obama's executive actions not only usurp powers that are not his, they don't really solve key immigration problems.
The greatest economic challenge of our time is how to restore economic growth. Over the past dozen years, average real growth has slowed to 1.8 percent annually, under both Republican and Democratic presidents and congresses. It's a bipartisan problem. And it's a new one. For the past 50 years or so, the American economy grew at just less than 3.5 percent per year. But we're now experiencing one of the longest slow-growth periods in the past 100 years. Excluding the Great Depression, I bet it is the longest slow-growth period in a century.
We all know the Republican midterm landslide was largely a repudiation of President Obama's policies and his handling of the job of chief executive. And of course, we don't know who will succeed him in 2016. But buried deep inside Tuesday's exit polls is a series of numbers on presidential contenders that will blow your mind. It's completely different from most anything you've seen in the newspapers, the Internet or on TV.
Election Day will produce a new Republican Congress, or so the latest polls tell us. If so, the huge losses for the Obama Democrats -- both in 2010 and this year -- will have come in large measure from the economic failures of a party that has moved radically left over the past 20 years. Hillary Clinton just argued that corporations and businesses don't create jobs, and that a higher minimum wage and other government actions do. It showcases just how far the Democrats have moved left since her husband, working with a Republican Congress, launched pro-growth supply-side policies like free trade, welfare reform, lower investment tax rates, limited spending and a strong dollar.
The vast majority of political journalists -- and I include some of my conservative colleagues -- are missing a very big story. The Republicans are going to recapture the Senate, picking up more seats than most any forecaster expects. And the House GOP is going to add to its majority. But then comes the big story: The beginning of a new conservative revolution. The idea that nothing much will change if the GOP captures the whole Congress is just plain wrong. The politics and policies in Washington are about to change in a major way.
Steep stock market corrections often create shrouds of pessimism that do bad things to people's brainpower. And one of the absolutely stupidest things I have heard in recent weeks is that the recent drop in oil prices is bad. You heard me right. Serious people on financial television are saying lower oil prices are a signal of worldwide economic collapse. Here at home that translates to recession, deflation, a profits collapse and rising unemployment. I've been around for a while, and I've seldom heard such gibberish. The latest stock market scare stems from a bunch of fears -- such as the possible spread of Ebola, economic slowdowns in Europe and Asia, and deflation worries. And when the stock market decides to correct, any reason will do. We must respect the wisdom of the market.
So President Obama gives a major economics speech toward the end of last week, and the next week stocks get clobbered. It was the worst correction in many months. There's probably no direct cause and effect here. But it's worth noting that the president has been speaking out of all sides of his mouth during the market volatility. In that speech a week ago he swore that he's not anti-business. He said, "I actually believe that capitalism is the greatest force for prosperity and opportunity the world has ever known." You know, that sounds a lot like my opening line on "The Kudlow Report," where for nine years I said "Free-market capitalism is the best path to prosperity." (Hah!)
A couple of weeks ago at New York's Metropolitan Museum of Art, several hundred people went to their feet to applaud a speech delivered by David H. Koch. The occasion was the opening of the Met's new facade on Fifth Avenue. It runs four city blocks, and is complete with new fountains, paving, lighting, landscaping and seating areas for visitors. Mr. Koch contributed the entire $65 million cost of the project, which took years to complete. And the people kept applauding. For several minutes. They wouldn't stop in their gratitude for Koch's generosity toward New York and one of the world's great museums.
Maybe the U.S. economy, a weakling for the last six years, is finally starting to flex some muscle. We're referring to the return of King Dollar.
I know he's made a million mistakes. And I have opposed nearly all his domestic and international policies. But after watching Obama's intense ISIS speech Wednesday night, and reading the text several times, I think the president basically -- finally -- got it right. I support him. My best advice to Republicans and Democrats is to support the president's new ISIS campaign. Noteworthy, as of this writing, House Speaker John Boehner has announced his backing of Obama on this matter. Democratic Senate Majority Leader Harry Reid and Republican Sen. leader Mitch McConnell have also announced their support of the president's ISIS plan. Only Nancy Pelosi is absent.
If the Republican Party adopts a clear, optimistic, growth-and-reform message to turn America around, it can win big in November. It could still be a wave election. But so far it hasn't done it. The party is essentially asking voters to give it control of both houses of Congress. Yet it hasn't told voters what it would do with such a mandate. That's why the GOP must present a true governing agenda. You can't ask for two-house support without telling voters what you're going to do with it.
The $16.65 billion settlement by Bank of America over financial-crisis-era mortgage securities "highlights a pattern of the government extorting the banks," Dick Kovacevich said on CNBC this week. Kovacevich is the former Wells Fargo chairman and CEO. I've known him for years. He ran a great bank. He kept Wells Fargo clean during the credit meltdown. And, unusual for a big-bank CEO, he strongly supports free-market principles. Kovacevich went on to say, "It's definitely politics. It has nothing to do with justice or restitution to the innocent victims. In fact, more of the money is going to the coffers of the states and various departments than the victims." He then concluded, "Why are we charging the stockholders instead of going after the people who did wrong? Corporations don't engage in criminal behavior. People do."
The so-called "abuse of power" indictment of Texas Gov. Rick Perry is not only not going to hurt him in the 2016 GOP sweepstakes but it might actually help him. I say that because Perry immediately fired back at the charges with no hesitation, labeling the indictment the partisan political ploy that it really is. And in terms of threatening to veto legislation that would have funded the state's Public Integrity Unit, run by Travis County district attorney Rosemary Lehmberg, Perry held his Texas constitutional ground. In a number of TV appearances, Perry not only said that he was legally authorized to defund the DA but that he would do it all over again if he had the chance.
John F. Kennedy campaigned for president in 1960 by belittling Dwight Eisenhower's three recessions and declaring, "We can do bettah." He was right. In the 1960s, after the Kennedy tax cuts were implemented, prosperity returned, the economy grew by almost 4 percent annually, unemployment sank to record lows and a gold-linked dollar held down inflation. But today many leading economists are throwing up their arms in frustration and assuring us that 2 percent growth is really the best we can do.
