My friend and frequent Kudlow and Company market guest Jason Trennert wrote a great op-ed in the Financial Times earlier this week (“While America sleeps, Europe is catching up”). Looks like Mr. Trennert and Secretary Paulson are on the same page. Both gentlemen are absolutely right.
Here’s an excerpt:
“…Success, of course, tends to result in complacency and arrogance. America now, sadly, appears ready to take its economic hegemony, and its reliance on free markets, for granted. Quietly, “Old Europe” is in a race to cut corporate tax rates and embrace the spirit of open markets just as Congress seems intent on raising taxes and closing itself off from global competition.
…America’s corporate tax rates are currently among the highest in the developed world, just as Germany, France, Spain and the UK are all rushing to cut taxes. The markets appear to be figuring this out – the MSCI European stock index is up more than 111 per cent in dollar terms over the past five years, while the S&P is up a respectable 54 per cent. In the context of these higher tax rates and a regulatory regime ushered in by Sarbanes-Oxley, it is no small wonder that London is giving New York a run for its money as the world’s financial capital.
…[T]he US appears dangerously close to losing the plot on how it treats capital, just as many European and Asian economies are beginning to embrace the types of policies that contributed to America’s economic strength. One can only hope that the current Congress and the rogues’ gallery of candidates now running for president wake up in time to understand that America’s place in the world economy is not its manifest destiny.”