Wednesday, November 20, 2013

Tuesday, October 29, 2013

Congressman Paul Ryan: "Obamacare Not Workable"

Obamacare’s glitches are here to stay according to House Budget Committee Chairman Paul Ryan.
In an exclusive interview with CNBC’s Larry Kudlow, set to air Tuesday night on “The Kudlow Report,” Ryan said the problems with the Affordable Care Act extend far beyond website malfunctions.

“It’s more than the website,” Ryan said. “It’s because this law itself is built from an architecture, a foundation, that’s just not workable.”

Ryan said he sat through several House Committee Oversight meetings in which the administration failed to answer fundamental questions on the rollout of the Affordable Care Act.

“The point is they said ‘everything is fine, the law is going to be OK. We are ready to roll it out. We won’t have any problems.’”

But House Republicans knew better, Ryan said.

“People should know that we tried to prevent this from happening in the first place by fighting a law we did not intend,” Ryan said, referring to the Republican-led House’s 46 attempts to repeal the law.

“Then we tried giving people relief from the law by delaying it until 2013. That was rejected and now we are living with this law.”

Frustrated with the Senate’s rejection of attempts to defund and delay the law, Ryan shifted to the GOP’s most plausible tactic to end the Affordable Care Act: winning elections.

“We owe the American people an alternative,” Ryan said. “We want to win elections by saying this is not working for you and there are better ways in keeping with the country’s principles that puts you in charge of your heath care future.”

Ryan dismissed criticism that the Republican Party is at a “civil war” after failed attempts to delay Obamacare as part of the government shutdown and debt ceiling negotiations.

“We’ve had disagreements with each other on tactics,” he said. “These aren’t principles. I don’t know a Republican that doesn’t support comprehensive reforms to replace Obamacare with patient-centered health care.”

The Wisconsin Congressman said the GOP will have a chance to showcase their common principles in budget negotiations set to begin Wednesday.

He rejected hopes for a “grand bargain” deal, which he said would include pro-growth tax reform, a balanced budget and entitlement reform.

“I don’t think we’ll get a grand bargain, and we’re not talking about getting a grand bargain,” he said. “Because then, one party will require that the other compromise their core principles, and we won’t get anything done.”

The GOP’s key bargaining chip, Ryan said, is the sequestration, the automatic spending cuts Democrats are seeking to repeal.

“If we can’t get anything better than the sequester, then we’ll keep the sequester,” Ryan said. “That’s our base case to begin with.”

Ryan insisted increased tax revenue was out of the question, calling Keynesian stimulus programs “sugar-high economics.”

“We’re not in this business to raise taxes,” he said. “We’ll take the spending cuts we have and work with those.”

Instead, he said he was willing to negotiate on the “smarter” cuts to replace sequestration.

“If we get a down payment on this debt and deficit in exchange for short-term relief, we’ll take it,” he said. “But it has to be on net a positive, meaning we will take the spending cuts right now.”

Ryan said substituting entitlement reform in place of broad spending cuts under sequestration would enable long-term growth in the U.S. economy.

“If smart entitlement reforms could replace this crude across-the-board sequester, it would do a couple things,” Ryan said. “It would show the world that America is getting ahead of its problems. We’re not just going to victims of circumstances. We’re not just going to fall into a debt crisis like Europe, but we’re going to get out of it.”

Entitlement should be at the top of the budget agenda, Ryan said.

“The question is not if we deal with entitlements,” Ryan said. “The question is if we are going to do it before the debt crisis or after the debt crisis. We would like to do it before so that we can shape events in this country instead of having events shape us.”

The Congressman said, ultimately, his job is to find common ground in budget negotiations among Republicans and Democrats.

“I would argue that in this very difficult time that we are in, wouldn’t it be nice to show that this American divided government can at least govern?”

Thursday, October 10, 2013

Larry Kudlow & Robert Reich on CNN's "Piers Morgan Live"

With the government shutdown handicapping the nation, and the debt ceiling deadline rapidly approaching, Piers Morgan asked Robert Reich and Larry Kudlow to offer their vast insight and perspective.

Tuesday, September 24, 2013

Kudlow's Lament: Is capital on strike in the U.S.? (written by Marc Wiersum of the Market Realist)

Investment in the United States
The below graph reflects the capital strike in fixed domestic investment in the United States. The “strike” of U.S. capital is the notion raised by CNBC commentator Larry Kudlow that despite record profits at U.S. companies, profits and capital aren’t recycling back into the U.S. economy as investment. As displayed below, U.S. corporate profits (the red line) were approximately 45% of total investment in the United States during the Reagan era in the 1980s. However, corporate profits now represent 85% of total investment in the United States—or nearly twice the historical levels. The most disturbing part of this trend is that despite the dramatic recovery in corporate profits post–2008 crisis, there hasn’t been an offsetting growth in investment in the United States.
What is fixed investment and why is it important?
“Fixed investment” refers to fixed capital investment, including the replacement of depreciated fixed capital. Fixed investment doesn’t include financial assets such as bonds. Fixed investment, from an accounting perspective, includes physical assets held one year or more. Fixed investment is important because the level of fixed investment indicates potential longer-term economic growth and future productivity gains. The more fixed capital available per worker, the more each worker can produce. When fixed capital growth rates decline, productivity and economic growth rates are more likely to slow in the future. Fixed investments include items such as machinery, land, buildings, installations, vehicles, and technology. In the 1980s, fixed investment stood at approximately 20% of U.S. dross domestic product, or GDP, though it’s now closer to 15% of U.S. GDP.

To continue . . . 

Tuesday, July 09, 2013

Roger Stone's Sixth Annual Ten Best and Worst Dressed Men and Women in the World in 2012

In his fourth year on the StoneZone best dressed list, Kudlow, the supply-side apostle and pro-growth advocate who chews up the business news and lays down the Reaganite creed at CNBC has an uncanny sense of the "right" shirt and tie combinations for TV.  The good taste of Turnbull & Asser, where Sean Connery got his shirts to be 007 is Kudlow's haberdasher of choice.  Master Tailor Leonard Logsdail make his suits, somber, impeccable and quiet -- a canvas for his bold shirt and neckwear combinations.

Tuesday, April 09, 2013

Thatcher, Freedom, and Free Markets

Many profound and detailed admiration pieces will be written about the late Margaret Thatcher, and they’ll be much deeper than this one. 

But I want to get on record with my own esteem for Mrs. Thatcher, whose character, philosophy, and achievements made her one of Britain’s greatest prime ministers.

Way back in the early 1990s, at a National Review conference on the eastern shore of Maryland, had the great honor to serve on an economics panel that Mrs. Thatcher moderated. (Craig Roberts was also on that panel, although I can’t remember the name of the third panelist.) The topic was free markets and freedom, areas in which Margaret Thatcher made huge contributions, so I had a lot to live up to. And how did it go? Well, following the discussion, I got to sit next to Mrs. Thatcher during the luncheon. And she told me, “You know, Kudlow, you did rather well in that talk.” Naturally, I was thrilled. 

Margaret Thatcher fought socialism in England and unyieldingly promoted the free-market views of Nobelists Milton Friedman and Friedrich Hayek. She stopped the destructive British labor unions dead in their tracks. With every bone in her body she attempted to limit government by lowering spending and taxation. She opted for big-bang financial deregulation. And she put London back on the map as a world banking center.

“Freedom” was always her watchword.

She also adored Ronald Reagan. And the two of them formed an extraordinary partnership for freedom and free markets. Working together they helped bring down the Soviet communist system. And it was a peaceful bring-down at that.

Thatcher saw Gorbachev first, and she reported to Reagan, “We can do business with him.” Reagan did, although he refused to back down on SDI. And as the American economy roared in response to Reagan’s own free-market supply-side policies, the Soviets were out-produced and eventually folded.

Mrs. Thatcher famously said, “The trouble with socialists is that they always run out of other people’s money.” That dictum really stands the test of time, doesn’t it? Running out of other people’s money? Today?

The age of big government has once again, at least temporarily, reared its ugly head. It’s a great battle for all the economies around the world. That’s one of many reasons why we will miss Margaret Thatcher. She did not go wobbly.

Wednesday, March 27, 2013

Kudlow's Radio Interview with Jimmy Kemp

Kudlow: I was talking about Jack Kemp my mentor, the late Jack Kemp, the great Jack Kemp, my friend and mentor, and his great message of economic growth and opportunity for all.  I want to emphasize those last two words- for all.  Nobody, in my lifetime, in either party, has reached out with a message of hope, growth and opportunity to minorities better than Jack Kemp. And I want to bring in my pal, Jimmy Kemp, who runs the Jack Kemp Foundation because, Jimmy is now the keeper of the scrolls and he is also a great friend.  Jim, how are you buddy?

Kemp: I’m great Larry, how are you?

I’m okay uh you know, there’s some scattered, you see some scattered columns and websites that talk about where’s the Jack Kemp, the new Jack Kemp in the Republican Party but, it was Jack’s message- I gave a talk, it was very funny, I gave a talk to the Wall people, the Manhattan, New York Republican Party and I’ve done this a little bit on the Kudlow Report, we had a whole Jack Kemp segment two nights ago-

I saw it.

Alright, what I remember, let’s put the tax cuts aside for a minute, as important as they are, what I remember, particularly when Jack was the Secretary of HUD, because I was one of his volunteer kitchen cabinet there; Jack wanted Empowerment Zones-

Enterprise Zones.

Enterprise Zones, tax free Enterprise Zones-

Not tax credits, but tax free, you’re right.

and as much home ownership as possible for minority groups.  Jack went to the projects, he actually went to the projects in Detroit, Chicago, L.A., and New York.  He worked with Charlie Rangel, the great, black Congressman in New York City and we developed what became Empowerment Zones here in New York City.  My wife’s art studio is in one, I mean am I wrong here?  Is my memory betraying me?

No, no of course not and part of what Dad understood is that- good policy, as great as Kemp-Roth was at cutting tax rates at that time, which was, reflecting on it, it was obvious tax rates were confiscatory. You couldn’t have them that high and have a growing economy. But he also knew at the same time, back in the 70’s, way before he was at H.U.D., but in order to have good policy it can only be policy that can be passed and in order to pass it he had to get Democrats. Larry, he was a Republican in a Democrat controlled House of Representatives and yet they had President Reagan in 1980, but he had to convince people, like Charlie Rangel, that he really did care. And that these policies that were “conservative,” he liked to call them liberal, because they were intended to free people to provide equal opportunity and knew that tax rates went along with providing that equality of opportunity in the housing sector, for people starting businesses in ghettos or barrios or poor urban areas, wherever they were. He knew that capitalism without capital is nothing but an ism, as Jesse Jackson had said and you had to get capital to people who would do something with it. He trusted people, and, as you pointed out, all people, not just rich folks who went to good schools.

See that’s the thing. Now the Republican Party is, some people in the Republican Party are trying to open up immigration reform. I’m all for it. Your dad believed that immigrants were a positive force.

E pluribus unum.

Right. He would have been on the right side of that issue today. But, you know, Jimmy, It’s just like reaching out and saying okay we’re going to give you a green card, that’s not really the answer. I mean what I’m saying is Jack Kemp had a set of policies, besides low tax rates, he had ownership policies, he had empowerment policies, he had, let’s see, no capital gains tax if you moved a business into an Empowerment  Zone, which would attract capital and people. There was human capital and financial capital. Kemp visited the projects, I want to emphasize it, Kemp met with La Raza Hispanics. Kemp visited the projects. When we were negotiating back in , I don’t know when this was Jimmy, 1991, Jack sent me to a couple of meetings with La Raza with his Rep. to try to figure out how to get a zero capital gains tax and La Raza backed it. They actually backed it. Now, Republicans don’t do that anymore. They don’t show up in the projects, they don’t go to a La Raza meeting, they don’t get photographed with Hispanic leaders and black leaders anymore. That was stuff Kemp did, it was great stuff. Why doesn’t anybody do that now, follow his example

Well, the greatest example and a guy we all love and respect, Paul Ryan, who worked for Dad. H made the calculated decision to focus on our incredible budget deficit and the spending that was out of control in the entitlement programs and led, Larry as you know, it took him away from the main thrust of Dad’s career. And there isn’t anybody who has jumped into that, really opportunity, the way that Dad took the reins, and there are a lot of great leaders today. I’m not discouraged. Part of our purpose at the Kemp Foundation is to help support or political leaders and we’re certainly not pessimistic because we certainly couldn’t have the name Kemp associated with us if we were. You’ve got governors who are doing the right thing, you’ve got plenty of congressmen and senators, but we do need a more robust discussion of the components of an economic policy because there should never be any discussion of a new normal, I know you hate that phrase. This country has too much capability and abilities, not only in the board rooms, but in classrooms around the country.

Growth should be unlimited. Just to reset the table, we’re talking to Jimmy
Kemp who is the president of the Jack Kemp Foundation. I am holding up, you see these stories about Jack Kemp, one story was written, “We need entrepreneurs like Jack Kemp.” Okay, I’m fine with that, but I don’t want to miss the essential point here, the essential point; Jack’s goal was growth, in other words, if you grew the economy rapidly through lower tax rates, less regulation and sound money, if you grew the economy that was a weapon to shrink the budget deficit and the debt. That was Jack’s way out. That didn’t mean he’d vote for spending bills that were unnecessary, but he understood that debt to GDP, that Republicans obsess about all the time, you solve that, in some sense, by growing the GDP.

Sure, you want a bigger pie.

Bigger pie! And secondly, with the debate about so called Republican outreach to minorities look at what Kemp did. Kemp didn’t do it just to win votes, he had a program. Let’s go through it again, it was home ownership, it was enterprise zones, it was tax-free enterprise zones. He would go to the meetings and the rallies and meet with the leadership. He already showed the way. What we need is a Kemp biography here to let people read this stuff and that’s what he did, he was a one-man band. Some Republicans made fun of him, the country club crowd made fun of him, Jimmy, but we should follow his lead now.

Well, yeah, the Kemp Foundation has a biography in the works and then we’re also releasing, in 2013, all of his speeches, which were previously released in a volume called the American Idea. And American Renaissance, we’re going to put out as well. The American Idea will have all of the speeches that were in it previously, but a bunch added to it.

Who’s doing the biography Jimmy? We only have 25 seconds. Who’s doing the Biography Jimmy?

We’ve got Mort Kondracke and Fred Barnes working on it.

I did the oral history. I want to see that. I want to work on that biography.


Jimmy Kemp, president of the Jack Kemp Foundation. That was Jack Kemp’s message, hope and opportunity for everybody, including minorities. I’m Larry Kudlow and we’ll be back with some budget talk on the other side of the break.

Tuesday, March 26, 2013

Thursday, March 07, 2013

Speaker Boehner Wants Budget Deals 'Out In The Open'

House Speaker John Boehner told me on Wednesday that a long-term deal on entitlements is possible, and also that there's no good reason for Team Obama to shut down the White House tour.  As the mandatory budget cuts continue to take effect, Boehner said he believes the American people still know that Washington primarily has a spending problem.

The speaker insisted that the president still doesn't understand that spending is the real issue, although he was more optimistic about Obama's offers to reform entitlements.  He also said he believes talk of limiting Social Security benefit increases and "means testing" Medicare to disqualify the wealthiest senior is for real, and that these items could be a basis for a grand bargain with the president.

But the Republican speaker made it clear that he wants to move budget negotiations out of the back rooms and in front of the broader congress and the American people.

"The top-down deals haven't worked out too well," he said during the exclusive Kudlow Report interview, adding that the process needs to be "more out in the open."  And while he noted that he gets along well with Obama on a personal level, he said the budget process shouldn't be about their relationship anymore.

The speaker also stepped into the controversy now swirling in Washington over the decision to shut down White House tours because of the sequester cuts.  Boehner said, "The president is trying to make it tough on members of Congress.  It's just silly.  I want to know who is being laid off at the White House.  The Capitol is open for tours.   We've been planning for this for months."

Boehner closed the interview by telling me that he's "still on a mission," and that he intends to stick around as speaker for a while.  He also me announced that he is launching a new comment feature on that offers average Americans a chance to weight in on government spending.

View our two-part interview below:

More One-on-One with Speaker Boehner

One-on-One with Speaker John Boehner

Thursday, January 31, 2013

The Spending Sequester Will Grow the Private Economy

Today’s report of a 0.1 percent GDP decline for the fourth quarter came as a surprise to most forecasters. But it actually masks considerable strength in the private economy. Namely, housing investment in the fourth quarter jumped 15.3 percent annually, business equipment and software spiked 12.4 percent, and real private final sales rose 2.6 percent. All in, the domestic private sector of the economy increased 3.4 percent annually -- a very respectable gain.

And here’s one for the record books: Working ahead of year-end tax hikes, individuals shifted so much money to the fourth quarter at the 35 percent top rate that personal income grew by 7.9 percent annually -- a huge number. And there’s more: In order to beat the tax man, dividend income rose 85.2 percent annually. You think tax incentives don’t matter? Guess again.

Now, all this private-sector strength occurred despite the fact that government spending -- namely military spending -- dropped 6.6 percent. Inventories also lost ground and the trade deficit widened.

But here’s a key point: Military spending has now fallen virtually to its lower sequester-spending-cut baseline. It did so in one quarter by about $40 billion. So the brunt of the impact over the coming years has already been felt. (Normally, as of recent years, military spending has been virtually flat.)

Which leads me to another key point: Even with the fourth-quarter contraction, the latest GDP report shows that falling government spending can coexist with rising private economic activity. This is an important point in terms of the upcoming spending sequester. Lower federal spending, limited government, and a smaller spending-to-GDP ratio will be good for growth. The military spending plunge will not likely be repeated. But by keeping resources in private hands, rather than transferring them to the inefficient government sector, the spending sequester is actually pro-growth.

Big-government Keynesians think big spending provides big growth. They are wrong. This has been a 2 percent recovery -- the worst in modern times -- dating back to 1947. So let’s try something different. Let’s shrink government. Let’s let the private sector breathe and generate entrepreneurship and risk-taking.

Spending is the true tax measure of the economy, according to Milton Friedman, Friedrich Hayek, and others. Even a modest sequester spending cut of maybe $60 billion in 2013, and perhaps more than $1 trillion over ten years (most of which will come from a slower spending growth rate, not real reductions), will be the best thing to inspire business and market confidence as well as international credibility. And it maybe even shave a point or two off the spending share of GDP.

On March 1 the spending sequester is supposed to kick in by law. If Congress wants to help the U.S. economy, the best thing it can do right now is implement this sequester. Then it can round out an even larger growth package, including large- and small-business tax reform and adjustments to stop entitlements from going bankrupt.

Monday, January 07, 2013

One-on-One with Senator Ted Cruz

Last week on "The Kudlow Report", I asked Republican Senator Ted Cruz if he'd go with a government shutdown if it came to it on the debt-ceiling debate.  His answer: "I think we have to be prepared to go so far as to shut the government down -- if we don't get some serious policies to stop the out-of-control spending, to tackle the debt, and to get economic growth."

It was a bold statement.  Watch the full video here: