An Open Letter to Tiger Woods

Fess up, clear the air, and seek redemption.

Fess up, Tiger. If you don’t, the tabloids are gonna kill ya.

The storyline so far is that for some reason your apparently furious wife Elin teed you up inside your Florida mansion with one of your Nike golf clubs, and that you sought escape by hot-footing it outside at two-thirty in the morning to your Cadillac Escalade in the driveway. But Elin kept coming at you. So you tried to slam the SUV down the driveway in racecar fashion, something you’ve probably done hundreds of times before. Only this time, for some reason, you hit a fireplug and wrapped the car around a tree.

But Elin still kept coming at you, slammin’ the club into the rear windshield. She must have had a long iron in her hand. Hell hath no fury like a woman scorned.

How you got your face scratched and wound up on the side of the road is still a mystery. But the tabs are saying a woman named Rachel Uchitel is the alleged home-breaker. That you have some kind of relation ship with her. And that story is not going to die until you put it to rest one way or another by fessing up and telling the truth.

Adding fuel to these flames, you have pulled out of your very own tournament, the 2009 Chevron World Challenge, which is scheduled for this week. Tiger, my friend, one thing you need to consider is the business angle to this narrative.

The Daily Beast is running a story about your $100 million car crash. Investigative reporter Gerald Posner estimates that even if you take a 10 percent hit on your endorsement income, this incident could cost you $10 million a year, totaling $100 million over the next decade. At risk could be your contracts with Nike, Gatorade, and AT&T. There’s also Accenture and the EA video-game series.

So, my friend, marital infidelity just doesn’t pay.

South Carolina governor Mark Sanford tried stonewalling, but it didn’t work out too well for him. His career is now finished. Another bad case is that of former North Carolina senator and unsuccessful presidential candidate John Edwards. He really had a bad time of it, with the tabloids literally chasing him into the bathroom. His career is finished, too. On the other hand, Nevada senator John Ensign did fess up -- about one half step ahead of the tabloids -- and he may well live to see another reelection day.

And then there’s Bill Clinton, who stonewalled about his affair with Monica Lewinsky. Woaaah! That caused one heck of a blow up, including impeachment proceedings in the House. Remember when he said that it “depends on what the meaning of the word ‘is’ is”? This was the worldwide sex-cover-up stonewalling attempt to end all marital-infidelity sex-cover-up stonewalling attempts.

Tiger, you don’t want to go there. That could be you. There are lessons to be learned about coming clean as fast as possible.

Even though I personally have only one-ten-thousandth of your media and business impact, perhaps my story will be helpful. Over 15 years ago, after missing a big speech and resigning from my career on Wall Street, the New York Times came after me with a story of serious alcohol and drug abuse. They were right. I believed then as I do now that honesty is a virtue, and I fessed up. I got sober. My saintly wife and I recently celebrated our 22nd marriage anniversary. And today I am fully employed at CNBC (for which I am eternally grateful). People forgave me. God redeemed me.

But in your case, if there is no alcohol, drugs, or infidelity, and if there is a better-sounding, truthful explanation of your events, you’ve gotta get out there and say it. As you know, your clean, serious, sober, near-perfect, golden-boy bloom is already off the rose. And if you insist on stonewalling, from now on it’s damage limitation. And that will be no fun at all. Your bottom will be lower than anything you ever imagined.

Fans love the way you play, and so do I. Sunday afternoons are a treat watching you. But you’re in a heap of trouble right now. Stonewalling, whether in business or politics, seldom pays.

C’mon Tiger. Be a mench. Fess up and clear the air. If you do it soon, you will be forgiven, and this too will pass.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:

TIGER WOODS: THE $100 MILLION CAR CRASH?
CNBC’s Darren Rovell reports.

*Gerald Posner, The Daily Beast
*Mike Paul, MGP & Associates PR President

DUBAI DEBT FALLOUT
What are the numbers at stake? A possible contagion? The Iran Factor

CNBC’s Erin Burnett reports.

WHAT'S THE DUBAI CONTAGION THREAT?

*Zach Karabell, River Twice Research President
*Jack Ablin, Harris Private Bank Chief Investment Officer
*Todd Thiel, McKinley Reserve/Capital Partners
*Robert Froehlich, Chairman of the Investment Committee for the Univ. of Dayton; "A Bull For All Seasons" Author

TIME TO AUDIT THE FED?
Do we need more Fed transparency?

On to debate:

*Rep. Ron Paul (R) Texas, Fmr. Presidential Candidate; House Financial Services Committee
*Peter Morici, Univ of Maryland Business Professor; U.S. International Trade Commission Fmr. Chief Economist

MONEY POLITICS DEBATE

Healthcare/Obama's Jobs Summit/Out of control Big Gov't spending

*Steve Moore, Senior Economics Writer for the Wall Street Journal Editorial Board; "The End of Prosperity" Co-Author
*Robert Reich, Fmr. Labor Secretary; Author, "Supercapitalism"; CNBC Contributor; Univ. of CA., Berkeley, Prof. of Public Policy

Please join us. The Kudlow Report. 7pm ET. CNBC.

Is It Time to Audit the Fed?

AEI's Vince Reinhart and the WSJ's Steve Moore recently joined me to discuss on CNBC's Kudlow Report.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:


GEITHNER UNDER FIRE


Panel:

*Andrew Ross Sorkin, The New York Times, Deal Book Editor; NYTimes Chief M&A Reporter
*James Pethokoukis, Reuters Money & Politics Columnist
*Lurita Doan, Former GSA Administrator;"Leadership Matters" commentator on FederalNews Radio 1500 AM
*Mark Walsh , "Left Jab" Host (Sirius show); Fmr. Sr. Vice President at America Online; Fmr. Vertical Net CEO; Founding CEO at Air America; Fmr. DNC Advisor

MONEY POLITICS DEBATE
-Investors ask Goldman to be less greedy
-AIG & systemic risk
-Sen. Mary Landrieu: $100m for her healthcare vote?

The panel will debate.

FED TRANSPARENCY?

*Vincent Reinhart, AEI Resident Scholar; Fmr Dir. of the Federal Reserve Board's Division of Monetary Affairs
*Steve Moore, Sr. Economics Writer for the WSJ Editorial Board; "The End of Prosperity" Co-Author

STATUS OF OBAMA-CARE
NBC’s Steve Handelsman will report.

AN INTERVIEW WITH SEN. JON KYL
-Obama-Care
-TARP
-Fed independence

Joining us this evening will be Sen. Jon Kyl (R-Ariz.)

Please join us. The Kudlow Report. 7pm ET. CNBC.

Lou Dobbs...

Longtime CNN anchor and commentator Lou Dobbs joined me on last night's Kudlow Report to discuss Omama-nomics, Tim Geithner, the demise of the dollar, the threat of American declinism, immigration, trade policy and other hot button issues.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:

***SPECIAL***



ONE-ON-ONE WITH LOU DOBBS

The former CNN anchor will be our special guest this evening.

Topics will include:

- Today’s heated Geithner hearings
- Paying Down TARP
- Healthcare (plus a look at the mammography fiasco)
- U.S. Jobs, Economy & Growth
- Obama in China; Schumer's China Bashing
- The Stock Market
- Direction of the Country; Immigration; Afghanistan; Trying 9/11 terrorists in NYC

***Also joining us to discuss healthcare & TARP will be Sen. John Thune (R-SD)

WASHINGTON TO WALL ST. DEBATE
Free Trade; Schumer's China Bashing

*CNBC's Rick Santelli
*Robert Reich, Fmr. Labor Secretary; Author, "Supercapitalism"; CNBC Contributor; Univ. of CA., Berkeley, Prof. of Public Policy

THE STOCK MARKET

Alison Deans, Fmr. CIO Neuberger Berman Private Asset Management

Please join us. The Kudlow Report. 7pm ET. CNBC.

SPECIAL...

Lou Dobbs joining me on Kudlow Report tonight.

7pm ET on CNBC.

On CNBC's Kudlow Report

This evening at 7pm ET:

SENATE DEMS HEALTHCARE BILL
CNBC’s Hampton Pearson reports.

BY THE NUMBER$…THE CBO BREAKDOWN
Rep. Dave Camp (R-MI) will join us.

WILL OBAMA-CARE SACRIFICE STANDARDS?
Sen. Lamar Alexander (R-TN) will join us.

IS INFLATION COMING BACK?
Does the dollar’s decline and surging gold prices show the Fed is fighting the wrong battle?

Panel:

*Judy Shelton, Economist; "Money Meltdown" author
*Vince Reinhart, American Enterprise Institute Resident Scholar; Fmr Dir. of the Federal Reserve Board's Division of Monetary Affairs
*Michael Panzner, Wall Street Trader; "When Giants Fall" Author; Financial Armageddon Blog

TAXES…
-A payroll tax to spur job growth?
-A repeal of Bush’s tax cuts?
-A Wall Street transaction tax?

*Michael Boskin, Fmr. Bush Economic Advisor; Stanford Univ. Prof. of Economics; Hoover Institution
*Steve Moore, WJS Editorial Board; "The End of Prosperity" co-author

CALIFORNIA BANS POWER-HUNGRY TVs
CNBC’s Jane Wells reports.

CARLY'S SUPPLY-SIDE RUN FOR SENATE IN CA
Former HP chairman & CEO Carly Fiorina will be aboard.

Please join us. The Kudlow Report. 7pm ET. CNBC.

An Interview with Tom Coburn

Last night I spoke with one of the Senate’s brightest lights — Sen. Tom Coburn (R., Okla.), who also happens to be one of only two physicians in the chamber. We discussed where the Democrats’ behemoth government health-care takeover bill is heading, as well as his plan to read the 2,000-plus page bill in its entirety on the Senate floor.

President Zero Sum Goes to Asia

Obama declinism on King Dollar and U.S. economic leadership.

President Obama took his declining dollar to the Asia-Pacific economic conference, and he added to it a declinist opinion of America’s economy. His big message? Don’t count on American consumers to lead the world from recession to recovery and beyond. His second big message? In the U.S., we must save more and spend less.

Huh? This is the same limits-to-growth, central-planning wisdom we hear so often these days at home. It’s also tone deaf, to say the least. Despite a sinking greenback that is wreaking havoc among the Asian economies, and in the face of repeated currency warnings by Asian officials, Obama brought no King Dollar stabilization message to the conference.

Before getting into the currency question, let me say this: I think more saving (and investment) by U.S. citizens is a great idea. But this need not come at the expense of consumption. In a prosperous free economy, people should be able to save, invest, work, and spend as much as they like. More is better than less in each case. Grow the pie larger.

Of course, if the president and his team want more saving and investment, they should end the multiple taxation of saving and investment. Unfortunately, our system taxes saving as income, capital gains, dividends, and inheritance.

Team Obama also intends to tax wealth more by raising the top personal tax rate from 35 to 40 percent. And they apparently don’t object to Nancy Pelosi’s plan to slap another 5.4 percent tax on the incomes and capital-gains of successful earners in order to finance a government takeover of health care.

Wealth is a crucial form of saving. And the investment that comes from extra saving is used to finance the entrepreneurial start-ups that create the jobs and incomes that allow families to spend. However, by creating a zero-sum game between saving and spending, the Obama planners are falling into an austerity trap -- one that would hand the American economy a second-place finish in the global race for capital and growth.

At the same time, Obama has no plan to stabilize King Dollar, and the Asian economies don’t like it. China’s top banking regulator said the Federal Reserve’s money-creating binge was the main cause of “massive speculation.” Similar sentiments came from top officials in Hong Kong, Singapore, and Japan.

And while Ben Bernanke tried to calm dollar worries during his recent speech at the New York Economics Club, it was clear that the greenback’s value ranks low on his priority list. Nothing but dollar lip service from the Fed head.

Because of the slumping dollar, U.S. import prices have jumped 10 percent at an annual rate over the past three months, and nearly 6 percent excluding energy. This is a tax hike on consumers and businesses, and it could depress holiday sales. It’s reminiscent of the gigantic energy shock of 2008 that was caused by the dollar’s collapse.

And what’s the current U.S solution to the dollar problem? Blame China, and call for a revaluation of the yuan. But beggar-thy-neighbor protectionism never works, and it causes bad blood between the countries involved.

The powerful Asian economies actually have a better idea. They want to move toward a free-trade currency-cooperation zone -- much like the euro zone, fathered by Nobel economist Robert Mundell. This makes more sense in terms of world price stability and free capital flows. But the U.S. refuses to play.

So Japan, Singapore, South Korea, Taiwan, and others are forced to desperately buy sinking dollars in order to protect their export industries. But this only creates inflationary money expansion. The beleaguered U.S. dollar is in effect exporting U.S. inflation overseas.

President Obama did talk about entering free-trade discussions. But his Commerce secretary, Gary Locke, threw cold water on the idea in a Singapore speech. He said trade agreements have to wait because of a crowded U.S. legislative agenda. (Hat tip: James Pethokoukis.) He may have a point: The South Korean free-trade bill has been languishing for several years in the Democratic Congress.

Then there’s the massive U.S. health-care takeover plan, which is now estimated at $3trillion. This additional dollar depressant will tax the patience of China, Japan, and other would-be buyers of our massive debt creation.

We cannot spend, tax, or devalue our way into prosperity. Nor can we command the respect of other nations by telling them our economy cannot grow as rapidly in the future as it has in the past.

Ironically, these same Asian countries -- with their accelerated growth rates -- have borrowed a page from American free-market capitalism. Yet Obama makes no defense of our free-market system, and provides no leadership on the leading economic questions.

In terms of global leadership, Ronald Reagan would say, “If not us, who? If not now, when?” It’s a pity that President Obama doesn’t share the Gipper’s commitment to American leadership.

On CNBC's Kudlow Report

This evening at 7pm ET:

OBAMA'S CHINA VISIT
CNBC chief Washington correspondent John Harwood will join us live from China.

THE DOLLAR
Obama gets an earful on easy money.

Panel:

*David Malpass, president of Encima Global LLC
*CNBC’s Rick Santelli
*Peter Navarro, author of "The Coming China Wars,"

WILL A CHEAP DOLLAR HURT HOLIDAY SALES?

*Kellyanne Conway, president and CEO of the Polling Company
*Vince Veneziani, writer at Business Insider

IS GOV’T HEALTHCARE GOING TO PASS?

Senator Tom Coburn (R-Okla) will be aboard.

FINANCIAL FRAUD TASK FORCE

Mark Calabria, director of financial regulation studies at the Cato Institute

SARA PALIN, POPULISM & THE GOP

Panel:

*BigGovernment.com’s Andrew Breitbart
*Craig Shirley, Republican consultant and author of "Rendevous with Destiny"
*National Review's Jim Geraghty
*Kellyanne Conway, president and CEO of the Polling Company

Please join us. The Kudlow Report. 7pm ET. CNBC.

Is Government-Run Health Care Going to Pass?

Is big government, command-and-control of health care and the economy going to pass the Senate, and then the entire Congress, to become law? Last night I spoke with terribly smart Republican Sen. Judd Gregg of New Hampshire. Gregg’s a budget expert and member of the Senate Health Committee. He isn’t too optimistic right now. He thinks the House version will basically become law. Very scary stuff.

On CNBC's Kudlow Report

This evening at 7pm ET:

BEN BERNANKE’S SPEECH:
An eye on the Fed, dollar & gold

Panel:

*Steve Liesman, CNBC senior economics reporter
*Peter Morici, University of Maryland Robert H. Smith School of Business Professor; U.S. International Trade Commission Fmr. Chief Economist
*Andy Busch, BMO Capital Markets; CNBC Contributor
*David Goldman, Associate Editor First Things Blog

OBAMA IN CHINA
The China challenge & currency buzz

CNBC chief Washington correspondent John Harwood will join us from Beijing.

CHINA CURRENCY DEBATE
Yuan a strong dollar?

The aforementioned panel will debate.

"HEALTHCARE WILL PASS THE SENATE"
Sen. Judd Gregg (R-NH) will join us with his perspective.

BULL/BEAR DEBATE

*(bull) Jack Ablin, Harris Private Bank Chief Investment Officer
*(bear) Joe Battipaglia, Stifel Nicolaus Market Strategist

Please join us. The Kudlow Report. 7pm ET. CNBC.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:

OBAMA GOES TO CHINA
NBC’s Steve Handelsman reports.


IS THE U.S. MESSING UP THE WORLD'S MONETARY SYSTEM?
An in-depth look at the message of the dollar, gold prices and stocks.

Panel:

*Zachary Karabell, CNBC Contributor/River Twice Research President
*Andy Busch, BMO Capital Markets; CNBC Contributor
*Steve Moore, Sr Economics Writer for the Wall Street Journal Editorial Board; "The End of Prosperity" Co-Author

IS OBAMA REALLY GOING TO LOWER DEFICIT?

*Keith Boykin, CNBC Contributor; Former Clinton White House Aide
*Tony Fratto, CNBC Contributor; Fmr. White House Deputy Press Secretary

MADOFF PROGRAMMERS ARRESTED
CNBC’s Scott Cohn reports.

9/11 MASTERMIND TO BE TRIED IN NYC
Tim Brown, 9/11 Firefighter Survivor will join us.

SHOULD GITMO BE CLOSED?

*Ann Coulter, Syndicated Columnist; "Guilty" Author
*Christopher Amolsch, Criminal Defense Lawyer

Please join us. The Kudlow Report. 7pm ET. CNBC.

Kudlow Jobs Summit

We debated President Obama's jobs summit plans on last night's Kudlow Report. Joining me were Robert Reich, former Labor Secretary and Casey Mulligan, University of Chicago economics professor.

The Congressional Assault on Fed Independence

Investors and political analysts should keep a sharp eye on the congressional assault on Federal Reserve independence. This is a transparent effort by members of Congress to use the financial-reregulation bills as a means of applying political leverage to stop the Fed from any 2010 midterm-election-year exit strategies that might raise the federal funds target rate, stop the purchases of mortgage-backed bonds, and drain cash from the economy.

The Chris Dodd bill unveiled this week spells it all out. The White House would appoint the chairmen of the regional Federal Reserve banks (New York, Dallas, Richmond, etc.), subject to confirmation by the Senate. In addition, the Federal Reserve Board in Washington would appoint all the directors of these regional Fed banks. Right now, the local member banks appoint two-thirds of the directors, with the remaining one-third appointed by the Fed board in Washington.

These would be the biggest changes to the unique public-private composition of the Federal Reserve System since 1913, when the Fed was created under Woodrow Wilson.

Remember, the local Fed boards now appoint the reserve-bank presidents, who then vote on policy at Federal Open Market Committee (FOMC) meetings. So this is a transparent effort to influence Fed policy through the FOMC voting members by changing the people who vote on these members. Think of Barney Frank. The House Financial Committee chairman has often remarked that the hawks on the FOMC always seem to be the reserve-bank presidents. He wants doves.

Now, I’m not going to defend the Fed’s actual policy. As I have written many times, the Fed should be targeting financial and commodity-price indicators, which today are all signaling that the Fed is too loose and that it is creating far too many new dollars. Gold keeps hitting new record highs in nominal terms. The greenback has become the U.S. peso. Instead, the Fed has been targeting the unemployment rate and GDP. In terms of preventing any new bubbles, this really is the biggest problem.

However, I will defend Fed independence. If the Congress, backed by the White House, runs monetary policy, the inflationary tilt will be even greater.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:

A DOLLAR & GOLD MARKET REBELLION?
Can the Dollar & Gold vigilantes force the Fed to raise rates?

- James DiGeorgia, "The New Bull Market in Gold" Author; GoldAndEnergyAdvisor.com Editor
- Jeff Kleintop, LPL Financial Chief Market Strategist
- Andrew Kanaly, Kanaly Trust Co. Chairman

ATTACK ON THE FED?
CNBC’s Hampton Pearson reports.

BERNANKE POWER-STRIP?
Is the govt about to end the Fed's monetary independence & regulatory authority?

Panel

-John Taylor, Stanford University Economics Prof; Hoover Institute; "Getting Off Track: How Government Actions and Interventions Caused, Prolonged and Worsened the Financial Crisis" Author
-Thomas Woods , "Meltdown" Author; Ludwig von Mises Institute Senior Fellow
-Bill Galston, Fmr. Clinton Official; Brookings Institute
-Robert McTeer, Fmr. Dallas Fed President

WHITACRE - HARD TO ATTRACT TALENT CAUSE OF PAY RESTRICTIONS
CNBC’s Phil Lebeau reports.

BENMOSCHE & AIG PAY
CNBC’s Mary Thompson reports.

FREE BENMOSCHE, SAVE CAPITALISM?

John Carney, BusinessInsider.com Managing Editor will join us with his take.

FORBES MOST POWERFUL PEOPLE
Forbes’ Bruce Upbin, will join us.

Please join us. The Kudlow Report. 7pm ET. CNBC.

Addicted to Easy Money?

In an interview with CNBC’s Maria Bartiromo yesterday, Richmond Fed president Jeffrey Lacker refused to offer any clear sign as to when the central bank might finally end its zero-bound policy and begin raising rates. When asked whether he was worried about future inflation, Lacker said he thinks “we’re in a good place with inflation right now.” And when asked whether the U.S. would move to lift rates in 2010, he said, “It could take longer than that.”

Look, I would have asked Lacker if the Fed will tighten policy in my lifetime. He wouldn’t even commit to 2010.

Meanwhile, Lacker never once mentioned the dollar, which continues its decline virtually on a daily basis. Nor did he mention record gold prices. Nor did he mention rising commodity prices, including oil. Even the Treasury bond-market TIPS inflation spread has moved from zero to 220 basis points this year.

Lacker instead seems to be focused exclusively on GDP. But GDP is a lagging indicator. Lacker and Fed policymakers should be focusing on forward-looking leading indicators, like inflation-sensitive market prices.

Unfortunately, all of this sounds eerily familiar to the Fed’s big mistake seven years ago — the one that unleashed an inflationary bubble that eventually destroyed the economy.

Here’s something worth considering: What happens if the economy recovers faster and sooner than the Fed thinks? What happens if the unemployment rate comes down faster and sooner than the Fed thinks? If the Fed suddenly turns the spigot off because the economy is more V-shaped — raising rates and withdrawing cash — the stock market may very well get walloped.

Or what if the dollar- and gold-market vigilantes force the Fed to take action? Bernanke & Co. cannot ignore the currency- and gold-market rebellion forever.

What’s the bottom line here? If you use the wrong model of inflation as your guide, you’re going to get the wrong results.

On CNBC's Kudlow Report

This evening at 7pm ET:

DODD’S PLAN
CNBC chief Washington correspondent John Harwood reports from Washington.

DOES TOO BIG TO FAIL MEAN TOO BIG?

*Charlie Gasparino, CNBC on-air editor; "The Sellout" author
*Rob Nichols, president of the Financial Services Forum
*Cam Fine President & CEO Independent Community Bankers of America

CIOFFI & TANNIN: NOT GUILTY!

The aforementioned panel will debate.

WALL ST. PERVERSION?
Do markets like the 10-percent-plus unemployment?
Are markets all about easy-money?

Panel:

*Steve Liesman, CNBC senior economics reporter
*Michael Pento, Delta Global Advisors, Inc. Senior Market Strategist
*Rich Karlgaard, Forbes Publisher

IS A 2ND WAVE OF FORECLOSURES COMING?
CNBC’s Diana Olick reports.

GOOGLE VS. MURDOCH
CNBC’s Julia Boorstin reports.

Plus Forbes' Rich Karlgaard will offer his perspective.

Please join us. The Kudlow Report. 7pm ET. CNBC.

A Red-Ink Train Wreck: The Real Fiscal Cost of Government-Run Healthcare

My friend Dan Mitchell explains in this CF&P Foundation video why Washington's healthcare proposals will result in bloated government and higher deficits. It exposes the pervasive inaccuracy of congressional forecasts and lists 12 reasons why Obamacare will be a budget buster.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:

10.2% UNEMPLOYMENT…
Has Obama’s plan failed?
How do we get America working again?

Panel:

*Joseph LaVorgna, Deutsche Bank Chief U.S. Economist
*Steve Moore, WSJ senior economics writer; "End of Prosperity" co-author
*Matt Miller, Center for American Progress
*Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression"

Also…Rep. Paul Ryan (R-Wisconsin) will join us to discuss the latest jobs number and what lies ahead in the healthcare debate.

THE RETURN OF THE INFLATION TAX?

The aforementioned panel will debate.

WHAT DOES FED SUPER-EASE MEAN?
An eye on the dollar, gold, commodities, oil, & stocks

*Jerry Bowyer, CNBC Contributor/Syndicated Columnist will join Messrs. Moore and LaVorgna.

WHAT DOES BIG GOV'T TAKEOVER MEAN FOR AMERICA?
American author, journalist and satirist P.J. O'Rourke will be aboard.

SUPPLY-SIDE SOLUTIONS

The panel will debate.

Please join us. The Kudlow Report. 7pm ET. CNBC.

A Short-Sighted Cheer for Easy Money

Wall Street loves easy money. That’s what I conclude from today’s 200-point stock market rally, which started early and gathered force, pushing the Dow back over 10,000 at the close of trading.

Oddly enough, stocks roared at yesterday’s opening by nearly 150 points, a response to the GOP sweep in New Jersey and Virginia. The government’s health-insurance takeover plan looks dead after the elections. Nancy Pelosi is walking off a cliff with her Saturday vote in the House. I don’t think she’s got the numbers. Post-election, Blue Dog Democrats are going to have a hard time voting for big tax hikes, big spending, big government, and a $500 billion Medicare cut. Independents, seniors, and affluent suburbanites all moved to the GOP column on Tuesday, a negative referendum on the Democrats’ big-government scheme.

For whatever reason, stocks sold off yesterday afternoon -- right after the Fed signaled easy money for as far as the eye can see. To quote the Fed: “exceptionally low levels of the federal funds rate for an extended period.” Today, however, it looks like stocks took another read of the zero interest rate and the exploding Fed balance sheet and decided that there will be at least another six months of pump-priming and dollar-creation from the central bank.

Of course, gold keeps rising. It’s now $1,090. But the Fed doesn’t care about gold -- or the declining dollar, or rising commodity prices, or even the higher inflation expectations that are being built into the Treasury bond market.

Fed head Ben Bernanke is targeting the unemployment rate and something called “substantial resource slack.” He is ignoring the financial and commodity-price indicators which are all signaling that the target rate is too low and the rate of money-creation is too high.

Back in mid-2008, after the dollar plunged and oil prices exploded, the CPI inflation rate peaked at nearly 6 percent -- this, despite the fact that the U.S. economy was already in recession and slack resources were by then suffering from recessionary underutilization. Oil prices already have jumped to $80 a barrel in response to today’s cheap dollar, and retail gas prices at the pump have moved up nationwide from $1.80 to close to $2.70. That’s a tax hike on consumers and the rest of the economy. It’s one of the many consequences of dollar neglect.

So while the stock market is cheering easy money, the cheering is very short-sighted. I wouldn’t buck the tape, but I regard the Fed’s policy as a storm cloud over stocks and the future economy. The financial-market emergency and deep recession are over, but you wouldn’t know it from the Fed’s behavior. Even a 2 percent fed funds rate would be accommodative today, as Andrew Bary of Barron’s has written. But the Fed will have to hit the breaks a lot harder in the future if it continues its bubble headed policy at present.

One more thought. The highly volatile go-stop-go-stop Fed policy of the last ten years is exactly what has wreaked so much havoc. The Volcker-Greenspan Fed of the early 1980s to the late 1990s was much more stable and pro-growth. But over the last decade the Fed’s pillar-to-post policies and Phillips Curve obsession with unemployment rather than inflation has caused nothing but trouble.

This is one of many reasons why I think the Republican party should return to its Reagan roots as the hard-money party. Hard money will protect consumers and businesses, and would complement a low-tax-rate fiscal approach. A steady King Dollar is a strong incentive for investment, production, and employment, and of course price stability.

But in the meantime, investors are riding the easy money wave to higher share prices.

An Interview with Bob Corker

Last night I spoke with Tennessee Republican Sen. Bob Corker to get his thoughts on the key takeaways from Tuesday's elections. According to Corker, "Americans are recoiling from the policies that are being debated in Washington, there's just no question about that."

Click below to watch the entire interview.

On CNBC's Kudlow Report Tonight

This evening at 7pm ET:

SURGING GOLD & A PLUNGING DOLLAR
Should the Fed just pull the trigger on rates?

Panel:

*CNBC’s Rick Santelli
*David Goldman, Associate Editor First Things Blog
*CNBC senior economics reporter Steve Liesman

IS GOLD HEADING TO $2,500?

Frank Holmes, U.S. Global Investors CEO & CIO; U.S. Global Investors Global Resources Fund (PSPFX) will offer his bullish take on gold prices.

THE MARKET

*Mike Ozanian, Forbes National Editor
*John Lekas, CEO & Portfolio Manager Leader Capital

CHYRSLER'S NEW BUSINESS PLAN
CNBC’S Phil LeBeau reports from Chrysler headquarters in Auburn Hills, MI.

"THE SELLOUT"
CNBC on-air editor Charlie Gasparino discusses his new book chronicling what led to the global financial crisis.

WERE GOP WINS A SMACK DOWN OF OBAMANOMICS?

Panel:

*Noam Scheiber, Sr. Editor, The New Republic
*Chris Hayes, The Nation Washington Editor
*Peter Morici, University of Maryland Business prof
*Charlie Gasparino, CNBC On-Air-Editor

Please join us. The Kudlow Report. 7pm ET. CNBC.

Stocks and Voters Show GOP the Way

Stocks loved last night’s election returns. President Obama and Nancy Pelosi got their ears pounded back over big spending, taxes, the health-care takeover, cap-and-trade, and well, the fact that government is getting too darned big under this crowd in Washington.

The health-care insurance companies roared right up from the open. Investors are making a bet that the government-insurance option is in even bigger trouble after last night’s Republican victories. A Wall Street Journal news story also suggests that the big health-care bill won’t get done this year, and that it will be pushed into next year’s midterm calendar. Blue Dogs everywhere (and especially in Virginia) can read the election returns as accurately as any pundit. And they are not going to vote to jack up taxes, slash Medicare, and launch even more government spending and deficits.

While it’s true that the GOP didn’t take all three races last night, NY-23 was darn close for an outsider like Doug Hoffman. Jon Corzine lost in New Jersey despite multiple Obama trips to the state, and Virginia’s Bob McDonnell is emerging as a new Republican star.

But these big state races were about economic and fiscal discontent among the voters. That’s a theme that will last a long time — especially if Team Obama and Nancy Pelosi are stubborn in pressing forward with their government-control agenda. The investor class doesn’t like government interference, and neither does the stock market.

So the GOP now has an opportunity to rebuild and rebirth Reagan-like libertarianism with a strong free-market message that Washington should just leave us alone. Social issues didn’t play a role in New Jersey and Virginia. It was all about the threat of socialism lite. The social issues will emerge next year in certain districts, and as a pro-lifer I’m glad of it. But the overarching theme to rebuild the Republican party right now has to be about free-market economics and hopefully a supply-side message of lower tax rates to spur jobs and strong economic growth.

And it would be a shame if the GOP doesn’t take up the issue of the declining dollar. This is becoming an economic symbol of America’s decline. Rabid big-government spending and borrowing is a principal cause of the greenback’s fall. And the policy statement from today’s Federal Reserve meeting shows that the doves won again, while the hawks lost big-time. This speaks to continued dollar decline and new record highs in the nominal gold price.

A few weeks ago, Barron’s columnist Andrew Bary had it exactly right: The financial-meltdown emergency is over. Yet the Fed persists in running an emergency money-creating policy with a zero target rate that is completely inappropriate as the economy moves into a mild recovery. The Fed seems to think that too many people working is inflationary, and that with today’s high unemployment it’s okay to keep priming the money pump. This is nuts.

Inflation is caused by bad money as the result of excess money-creation — that is, the creation of dollars that the global markets do not want, just as we’re creating government bonds that the same markets don’t want. Financial, currency, and commodity-price signals are telling the Fed that they are way off course. But Bernanke won’t listen.

The weakening fate of the dollar is a good political issue, and Republican’s should not overlook it. It links back to big-government overspending. Reagan knew this. Today’s GOP should relearn it.

Special Edition of The Kudlow Report: "Your Money, Your Vote" Tonight at 7pm ET on CNBC

Please join us live from Washington, D.C. at 7pm ET tonight for a special 2-hour election night edition of The Kudlow Report. Our eyes and ears will be on the key election matchups in New Jersey, Virginia, and New York.

Tonight's all-star roster includes:

*Ed Gillespie, strategist and former RNC chairman
*MSNBC's Joe Scarborough
*Lanny Davis, Fmr. Special Counsel to Pres. Clinton
*Dick Armey, Former House Majority Leader; Chairman of FreedomWorks.org
*John Harwood, CNBC chief Washington correspondent
*Mother Jones' David Corn,
*Ben Ginsberg, Fmr. Bush/Cheney Counsel
*Mike Flynn, BigGovernment.com Editor
*Kelly Ann Conway, The Polling Company President & CEO
*Larry Sabato, Director, University of Virginia Center for Politics; "A More Perfect Constitution" author
*Peter Beinart, "The Daily Beast"
*John Fund, WSJ OpinionJounal.com Columnist
*Steve Moore, Senior Economics Writer for the Wall Street Journal Editorial Board; "The End of Prosperity" Co-Author

Please join us. 7PM ET on CNBC.

The Economics of a Three-Race GOP Sweep

Against the backdrop of high unemployment and a public revolt against a Democratic health-care bill -- which would significantly increase taxes, slash Medicare spending, and massively raise health-care spending elsewhere in a government takeover of our leading growth sector -- a three-race sweep by Republicans is very much in play this Election Day.

The Intrade pay-to-play betting/investment parlor shows big wins for Bob McDonnell in Virginia and Doug Hoffman in upstate New York’s 23rd congressional district. The New Jersey race for governor is too close to call, with the probabilities swinging wildly. Late last night, Chris Christie’s victory probability was 56-46 over Jon Corzine, a 16-point gain for the Republican. This morning, Christie showed a 55 percent chance of victory, with Corzine at 47.

It’s interesting that early signs of economic recovery are not helping the Obama Democrats. This is largely because of the 9.8 percent unemployment rate, which is expected to move higher. Even the crazy jobs-saved-or-created campaign is having no discernable impact while the Obamacons try to fight the unemployment rate.

If you go to recovery.gov, the official stimulus website, you’ll find that there has been $207 billion in stimulus spending through October 30, 2009 -- including $84 billion in tax benefits, $52 billion in contract grants and loans, and $71 billion in entitlements. So even if we give my friend Jared Bernstein his highly flawed “one million jobs saved or created,” that’s $207,000 per job in an economy where the average wage is about $46,000. Not good. Wasteful and ineffectual spending. (In reality, tax credits are spending. For incentivizing, you need marginal tax-rate cuts.)

Mike Flynn of Breitbart’s biggovernment.com notes that the government pumped $170 billion into the third-quarter economy. But GDP grew by only $150 billion. As I said, ineffectual spending.

That doesn’t mean the economy isn’t rebounding. It is. Glitches and all, third-quarter GDP popped up 3.5 percent at an annual rate after inflation. Statistically, the recession is over. That’s good. And it corroborates the big stock market rally over the past seven months. This is going to be a business-led recovery as self-correcting firms build profits on top of huge cash flows.

Yesterday’s ISM manufacturing report for October also confirms the growth trend with a recovery reading of 55.7, the strongest since April 2006. And this morning’s factory orders for September also show a stronger-than-expected gain. Even car sales are expected to rise in October by more than ten million, at least one million better than September. Ford, which refused to take TARP bailout money, reported a surprise increase in profits.

But the depreciating dollar remains a storm cloud over recovery. So are scheduled tax-rate increases and health-care legislation that will slam individuals and firms with higher tax burdens and higher tax costs for job creation.

And then there’s the Federal Reserve. With gold up another $25 -- setting a new nominal record of $1,079 -- the Fed will release a policy statement tomorrow, one that is likely to continue a program of massive money-pumping and a zero interest rate.

This whole Obama policy mix of huge government spending and a depreciating greenback is all wrong. It’s pro-inflation, not pro-growth. For a true economic recovery, we need a stable King Dollar and lower marginal tax rates to incentivize job creation.

Jimmy Pethokoukis and others have noted that the first recovery quarter under Reagan was better than 8 percent, not 3.5 percent. In fact, the average real GDP growth rate for the first quarter of the ten post-war recoveries is 7.3 percent.

So the economic-recovery story, and even the stock market rally, won’t bail out the Obamacons today, although it remains to be seen whether a free-market, anti-tax-and-spend message will emerge from a three-election sweep by the GOP. If so, it could doom the so-called health-care reform that has become a symbol of the leftward-tilting, big-government, economic-control policies emanating from Washington.

Is the Obama Bubble About to Burst?

Here's former Massachusetts Governor Mitt Romney's take on last night's Kudlow Report discussing President Obama's handling of the economy, stimulus programs, healthcare and much more.

Interview begins at the 3:38 mark.

On Tonight's Kudlow Report

This evening at 7pm ET:

AN INTERVIEW WITH FORMER FED CHIEF PAUL VOLCKER
CNBC’s Maria Bartiromo reports.

HAS THE TIME COME FOR THE FED TO JUST DO IT?

*CNBC’s Maria Bartiromo
*John Carney, BusinessInsider.com Managing Editor
*David Goldman, Associate Editor First Things Blog

FORD'S FABULOUS BILLION DOLLAR EARNINGS
CNBC’s Phil LeBeau reports.

THE LATEST ON BERNIE MADOFF
CNBC’s Scott Cohn will join us.

A CONSERVATIVE REVOLUTION IN NY’S DISTRICT 23?
Is a supply-side revolution at hand?

Chris Chocola, Club for Growth President & CEO will be aboard.

HAS OBAMA SPENT ALL OF HIS POLITICAL CAPITAL?
Former Massachusetts Governor and Republican Presidential candidate Mitt Romney will join us.

Please join us. The Kudlow Report. 7pm ET. CNBC.