McCain has called himself a foot soldier in the Reagan revolution. His tax speech clinches it.
Sen. John McCain moved decisively to the supply-side Tuesday in a strong speech to the National Small Business Summit in Washington, D.C. For investors, small-business owner-operators, and the vast majority of middle-class Americans who go to work every day and are concerned about Sen. McCain’s tax vision, this speech is good news. Big Mac is the taxpayer-friendly candidate.
The Republican candidate for president embraced low-tax-rate incentives to grow the economy, promising a combination of pro-growth tax reform and simplification along with significant spending restraint. He has called himself a foot soldier in the Reagan revolution. This tax speech clinches it.
McCain pledged to keep taxes low for families and employers, putting himself squarely in Ronald Reagan’s camp and offering to extend the long prosperity wave started by the Gipper over twenty-five years ago. In contrast, McCain charged Obama — who gave his economic speech on Monday — with proposing the single-biggest tax hike in the entire post-WWII period.
McCain asserted that “no matter which of us wins in November, there will be change in Washington. The question is what kind of change?” Obama says a McCain victory will hand Bush a third term. McCain says an Obama victory gives Jimmy Carter a second term.
I think McCain gets it right.
Getting down to specifics, McCain said he will maintain the low income and investment tax rates put in place by President Bush. He singled out the need to keep the capital-gains tax rate at a low 15 percent, so that businesses will have the investment necessary to expand jobs, productivity, and real wages.
Completely unlike Obama, McCain is saying you can’t have capitalism without capital. And he recognizes that investors must have high after-tax returns in order to take risks and fuel entrepreneurial activity. On this point, think high-risk energy technologies for clean coal, natural gas, oil shale, and nuclear and cellulosic power.
McCain repeated his plan to reduce the corporate tax rate to 25 percent from 35 percent. This could be his single-most-important tax reform. Not only will it enhance America’s global competitiveness, since we have the second highest corporate tax among large countries. But a number of studies show that roughly 70 percent of the benefits from a lower corporate tax will flow to the workforce in the form of higher real wages and more jobs.
McCain also pledged to keep the estate tax low to reward family businesses. Overall, he would seek a flatter and simpler tax system, probably modeled on Rep. Paul Ryan’s idea of two rates of 25 and 15 percent. McCain also discussed several middle-class tax cuts, such as doubling the child tax exemption and phasing out the alternative minimum tax. For businesses, McCain added a first-year cash-expensing provision for the write-off of new equipment and technology.
McCain coupled all this with a pledge to veto earmarks and pork-barrel spending. He held out as an example the outrageous $300 billion farm bill that drew Obama’s vote. McCain would go after corporate welfare and freeze discretionary spending outside of the military. And he made an especially strong case for the free-trade policies that have been so important to U.S. economic growth.
The McCain-Obama contrast couldn’t be more stark. Obama wants to use the tax system to redistribute income and wealth, not to grow the economy. He constantly talks about rewarding work over wealth. This is pure class warfare.
Obama doesn’t seem to understand that our nation was founded on the principle of equality of opportunity, and that private enterprise, not government, is the main economic driver. Obama intensely dislikes businesses. He would repeal all the Bush tax cuts and raise the corporate tax.
Obama talks about the need for bottom-up economic growth. But this is a canard. He’s pure top-down when it comes to big-spending government programs.
Obama singled out the ownership society, calling it a “worn dogma.” In fact he misjudges modern America, which is dominated today by 100 million investors, 25 million small-business owners, nearly 70 million homeowners, and roughly 140 million people who go to work everyday in the corporate world.
Obama opposes free trade. And though he has tried to hedge his bet on this point, it will never sell in this YouTube election.
Earlier in the campaign, Obama became the candidate of 1970’s scarcity and limits when he asserted that “we can’t drive our SUVs and eat as much as we want and keep our homes on, you know, 72 degrees Fahrenheit at all times, and then just expect that every other country is going to say okay.”
Ironically, it’s Sen. McCain who is saying “Yes we can.” We can grow. We can prosper. We can be confident about the future. He’s saying that with the right economic policies, America’s outlook will know no bounds.
Wednesday, June 11, 2008
Tuesday, June 10, 2008
Tuesday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE STOCK MARKET & ECONOMY...Our stock market and economic all-stars will discuss and debate all the latest news, trends, and developments affecting investors.
On board:
*Jerry Bowyer, chief economist, Benchmark Financial
*Joe Battipaglia, market strategist, Stifel Nicolaus
*Jack Gage, Forbes magazine associate editor
*Vince Farrell, managing director, Scotsman Capital
OIL & FOOD PRICES...Our market experts will offer their thoughts and perspective on energy and commodity prices.
On board:
*Shawn Tully, editor at large of Fortune magazine
*Kevin Kerr, president of Kerrtrade.com & editor of MarketWatch's Global Resources
The market panel will also join in the food & energy discussion.
YOUR MONEY, YOUR VOTE...We'll take a look at all the latest McCain/Obama election matchup news and developments with CNBC aces Maria Bartiromo and John Harwood who will be hosting tonight's CNBC election special at 8pm.
THE ECONOMY: MCCAIN VS. OBAMA...Dan Tarullo, economic adviser to Barack Obama will square off against McCain chief economic advisor Douglas Holtz-Eakin on all the key economic issues.
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Monday, June 09, 2008
Voters Say 'Drill'
Neither candidate gets it.
The recent spike in oil prices and unemployment is dramatically changing this presidential campaign -- virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5 percent (the biggest monthly increase in twenty years), and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.
Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Obama nor McCain are dealing with the new political reality.
In fact, it’s all about oil right now. The price has doubled over the past year while the economy has slumped.
But here’s an eye opener. Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.
And the candidates remain blind to these shifts.
Obama continues to lambaste oil companies while congressional Democrats push for cap-and-trade. They’re missing the point, big time. The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas pump prices while mounting a Gosplan-type taxing, spending, and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.
Sen. McCain has an opening here. Yet he, like Obama, would have voted for cap-and-trade, which went down to defeat in last week’s Senate vote. And while Mr. McCain favors some off-shore production and has been strong on nuclear development, he is against drilling in ANWR Alaska.
Then there’s the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana, and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia’s biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.
Hat tip to Mark Perry at the Carpe Diem blog site for these figures. Perry also is reporting a Bureau of Land Management study showing 279 million acres under federal management where oil and gas could potentially be extracted. But more than half of this is totally off limits. Off-shore, where another 86 billion barrels lie in wait, is also restricted. Then there’s liquefied natural gas, oil shale, and the various coal-to-liquid carbon-capture and sequestration technologies that would be priced out of the market by cap-and-trade.
The U.S. is the Saudi Arabia of coal, but we can’t produce. We’re still the world’s third-largest oil producer, but we could be the Saudi Arabia of oil if our companies were free to drill. Oil CEOs like Rex Tillerson of ExxonMobil and David O’Reilly of Chevron keep saying this. But politicians aren’t heeding their message.
Israeli saber-rattling against Iran could have accounted for some of last week’s huge oil spike. And the unemployment story may not be as bad as the May jobs report suggests. An unexpected inflow of teenagers probably bloated the jobless figure by a couple tenths of 1 percent. And economist Jerry Bowyer points out that an unprecedented hike in the minimum wage may be derailing students looking for summer work. However, in a sign of future job improvement, the civilian labor force grew by nearly 600,000, meaning that more people looking for work could signal recovery. Weekly jobless claims are near 350,000, not the 500,000 of past recessions. Overall, at 5.5 percent, unemployment continues to be historically low.
But the economy is still in a slump, not a boom. And the fact remains that Americans are very worried about the economic outlook. This could be a recession election. And right now voter economic anxieties are all about oil, even more than the sub-prime housing credit problem.
Sen. McCain has a great pro-growth plan to slash corporate tax rates, a move that would be a strong tonic for jobs and wages. But he must bolster that plan with a new emphasis on deregulated energy markets that can produce a total portfolio of conventional and non-conventional energy, including major new drilling. He should couple that with a strong-dollar message to curb both energy and non-energy inflation, which is shrinking consumer paychecks and damaging corporate profits.
More oil, more jobs, better wages, and low inflation. That’s a winning GOP message this fall. But what if Sen. Obama gets there first? It’s unlikely, but not out of the question. Either way, voters will move to the candidate who connects with their worries. Right now those worries are up for grabs.
The recent spike in oil prices and unemployment is dramatically changing this presidential campaign -- virtually overnight. The near $20 jump in oil to $140 a barrel, the unexpected half-point increase in the jobless rate to 5.5 percent (the biggest monthly increase in twenty years), and the resulting 400-point plunge in stocks has created a new campaign issue right before our eyes.
Public worry number one is now oil, jobs, and the economy, with the inflationary woes of the U.S. dollar right underneath. The candidate who can connect with these issues will win in November. But so far neither Obama nor McCain are dealing with the new political reality.
In fact, it’s all about oil right now. The price has doubled over the past year while the economy has slumped.
But here’s an eye opener. Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.
And the candidates remain blind to these shifts.
Obama continues to lambaste oil companies while congressional Democrats push for cap-and-trade. They’re missing the point, big time. The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas pump prices while mounting a Gosplan-type taxing, spending, and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.
Sen. McCain has an opening here. Yet he, like Obama, would have voted for cap-and-trade, which went down to defeat in last week’s Senate vote. And while Mr. McCain favors some off-shore production and has been strong on nuclear development, he is against drilling in ANWR Alaska.
Then there’s the oil nobody is talking about. The Bakken fields beneath North Dakota, Montana, and Canada hold an estimated 400 billion barrels of oil. In comparison, Saudi Arabia’s biggest field, Gahawar, has an estimated 55 billion barrels, while ANWR has an estimated 10.4 billion barrels.
Hat tip to Mark Perry at the Carpe Diem blog site for these figures. Perry also is reporting a Bureau of Land Management study showing 279 million acres under federal management where oil and gas could potentially be extracted. But more than half of this is totally off limits. Off-shore, where another 86 billion barrels lie in wait, is also restricted. Then there’s liquefied natural gas, oil shale, and the various coal-to-liquid carbon-capture and sequestration technologies that would be priced out of the market by cap-and-trade.
The U.S. is the Saudi Arabia of coal, but we can’t produce. We’re still the world’s third-largest oil producer, but we could be the Saudi Arabia of oil if our companies were free to drill. Oil CEOs like Rex Tillerson of ExxonMobil and David O’Reilly of Chevron keep saying this. But politicians aren’t heeding their message.
Israeli saber-rattling against Iran could have accounted for some of last week’s huge oil spike. And the unemployment story may not be as bad as the May jobs report suggests. An unexpected inflow of teenagers probably bloated the jobless figure by a couple tenths of 1 percent. And economist Jerry Bowyer points out that an unprecedented hike in the minimum wage may be derailing students looking for summer work. However, in a sign of future job improvement, the civilian labor force grew by nearly 600,000, meaning that more people looking for work could signal recovery. Weekly jobless claims are near 350,000, not the 500,000 of past recessions. Overall, at 5.5 percent, unemployment continues to be historically low.
But the economy is still in a slump, not a boom. And the fact remains that Americans are very worried about the economic outlook. This could be a recession election. And right now voter economic anxieties are all about oil, even more than the sub-prime housing credit problem.
Sen. McCain has a great pro-growth plan to slash corporate tax rates, a move that would be a strong tonic for jobs and wages. But he must bolster that plan with a new emphasis on deregulated energy markets that can produce a total portfolio of conventional and non-conventional energy, including major new drilling. He should couple that with a strong-dollar message to curb both energy and non-energy inflation, which is shrinking consumer paychecks and damaging corporate profits.
More oil, more jobs, better wages, and low inflation. That’s a winning GOP message this fall. But what if Sen. Obama gets there first? It’s unlikely, but not out of the question. Either way, voters will move to the candidate who connects with their worries. Right now those worries are up for grabs.
Oil/Dollar Updates
Skyrocketing oil and gas pump prices have become public enemy number one on the economics front, and politically priority number one out on the campaign trail. (Though neither Obama nor McCain have really connected with the public’s desire to drill and produce more oil as a way of getting gas prices down.)
Interestingly, President Bush’s remarks today, ahead of his European tour, were right on message. He said that the U.S. has an opportunity to increase oil supplies and take pressure off gasoline prices. He specifically singled out opening up ANWR and the continental shelf. He also emphasized a strong dollar. Although he did not change the rhetoric of a strong dollar being in the nation’s interest, he did mention how a strong dollar was in the interest of the global economy. And generally he just seemed to be drilling down on this very important King Dollar topic.
Noteworthy is Treasury-man Paulson’s CNBC interview where he did not rule out dollar intervention. Intervention won’t work in the long run. But it could have a positive shock value in the short term. Robert Rubin did this for President Clinton. If Paulson intervened now he could close down all those dollar shorts — a move that would help the greenback and undoubtedly contribute to lower oil prices on the open market.
Meanwhile Barack Obama put out his economic thoughts today, and had nothing to say about drilling for more oil or a stronger dollar. Obama railed on about tax breaks for big corporations and permanent occupation of Iraq. He also talked about a renewable energy policy that ends our addiction to foreign oil and brings relief from high fuel costs and builds a green economy that would create 5 million jobs. Nobody believes this. Then he went on to talk about rewarding wealth over work — in other words, more class warfare and redistributionism.
Oh, and did I forget to mention a windfall profits tax on Exxon? Yup. Still there in the Obama speech.
Interestingly, President Bush’s remarks today, ahead of his European tour, were right on message. He said that the U.S. has an opportunity to increase oil supplies and take pressure off gasoline prices. He specifically singled out opening up ANWR and the continental shelf. He also emphasized a strong dollar. Although he did not change the rhetoric of a strong dollar being in the nation’s interest, he did mention how a strong dollar was in the interest of the global economy. And generally he just seemed to be drilling down on this very important King Dollar topic.
Noteworthy is Treasury-man Paulson’s CNBC interview where he did not rule out dollar intervention. Intervention won’t work in the long run. But it could have a positive shock value in the short term. Robert Rubin did this for President Clinton. If Paulson intervened now he could close down all those dollar shorts — a move that would help the greenback and undoubtedly contribute to lower oil prices on the open market.
Meanwhile Barack Obama put out his economic thoughts today, and had nothing to say about drilling for more oil or a stronger dollar. Obama railed on about tax breaks for big corporations and permanent occupation of Iraq. He also talked about a renewable energy policy that ends our addiction to foreign oil and brings relief from high fuel costs and builds a green economy that would create 5 million jobs. Nobody believes this. Then he went on to talk about rewarding wealth over work — in other words, more class warfare and redistributionism.
Oh, and did I forget to mention a windfall profits tax on Exxon? Yup. Still there in the Obama speech.
Monday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE MARKETS, OIL & MORE...Our stock market all-stars will discuss and debate all the latest news, trends, and developments affecting investors.
On board:
*Dennis Gartman, economist and editor of the Gartman Letter
*Jeffrey Gundlach, chief investment officer, The TCW Group, Inc.
*Jim Lacamp, portfolio manager at RBC Dain Rauscher
*Jason Trennert, chief investment strategist and managing partner at Strategas Research Partners
BANKS, HOUSING & THE CREDIT MARKETS...Tom Brown of Second Curve Capital and www.bankstocks.com will join the market panel with his take on all the latest developments.
MONEY POLITICS & THE POLLS...Frank Newport, editor-in-chief of the Gallup Poll, will deliver all the latest insight on what Americans are saying about high gasoline prices and the state of the economy.
OIL RECESSION ELECTION...Our money politics panel of experts will weigh in with their perspective on oil, the economy, and more as the general election battle between McCain and Obama heats up.
On board:
*Steve Moore, senior economics writer, Wall Street Journal
*Jared Bernstein, senior economist, Economic Policy Institute
*John Avlon, author of Independent Nation: How Centrists Can Change American Politics and former chief speechwriter for Rudy Giuliani
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Friday, June 06, 2008
Friday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE STOCK MARKET, OIL, ECONOMY & MORE...Our stock market panel will debate all the news, trends and developments affecting investors including today's big oil spike and stock market drop.
On board:
*Don Luskin, chief investment officer, Trend Macro
*Joe Battipaglia, market strategist, Stifel Nicolaus
*David Kotok, co-founder & CIO, Cumberland Advisors
*Vince Farrell, managing director, Scotsman Capital
Also...Chris Edmonds, managing principal of FIG Partners Energy Research & Capital Group, will offer his insight on the run-up in oil prices.
MORE ON THE MARKETS, ECONOMY & MONEY POLITICS...Our Washington to Wall Street all-stars will weigh in with their perspective on all the latest news and developments.
On board:
*Greg Valliere, Washington strategist, Stanford Policy Research
*Jerry Bowyer, chief economist, Benchmark Financial Network
*Brian Wesbury, chief economist, First Trust Advisors
*Mark Skousen, financial economist, author, editor of the financial advice newsletter Forecasts & Strategies
PRIMARY POLITICS...Pollster Scott Rasmussen of Rasmussen Reports will deliver fresh perspective on all the latest polling data.
LOOKING AHEAD AT THE GENERAL ELECTION...Our political guests will offer their insight and debate all the latest election news.
On board:
*Ben Ginsberg, partner and lobbyist for Patton Boggs LLP
*Julian Epstein, Democratic strategist
*Rich Masters, Democratic strategist
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Thursday, June 05, 2008
A Command Performance by McConnell
Republican Senate leader Mitch McConnell, on the show last night, illuminated his unyielding opposition to the cap-and-trade bill now being debated in the Senate. He hit all the right notes. Overtax. Overspend. Over-regulate. Central planning. Command-and-control of the U.S. economy. All in the name of a dubious global-warming theory. A bill that would wind up costing consumers and businesses a small fortune. A bill that would drive up electricity prices and gas prices at the pump, reducing American competitiveness and damaging the economy.
It was a very impressive presentation of the conservative opposition to this crazy bill.
Right now Sen. McConnell is trying to put forward a bunch of amendments that would be poison pills to Democratic leader Harry Reid — including a provision to allow large-scale off-shore drilling for oil and gas. I might add that Mr. McConnell was heavily armed with facts and figures for this most impressive presentation on the program. If there’s any tougher conservative in the Senate, I don’t know who that is.
We also talked some about the importance of 41 Republican votes to stymie Democratic plans in a number of areas. Of course, Mr. McConnell’s crystal ball for November is not perfect. But he made a strong case for electing Republicans to stop the threat of a three-house Democratic sweep.
He also talked about stopping the union agenda — which is very much a part of Obama’s campaign. Especially the card-check bill, which would end the secret ballot for union organizing in businesses. This bill was stopped once last year, but it will come up again if Obama wins.
I also asked McConnell how he would deal with John McCain’s support of cap-and-trade. McConnell said he had no idea if McCain supported the current Democratic bill. But he said his Republican members are opposed to this bill.
Steve Moore of the WSJ editorial board called in this morning to remind me that both Obama and McCain have critical cap-and-trade votes in front of them. I call it carbon politics. Think Kentucky. West Virginia. Pennsylvania. Ohio. These could be very important states in November.
John McCain has an out by citing India and China, countries that of course will not be subjected to a U.S. congressional bill. That dodges the bigger points about the flaws of cap-and-trade, but it could give McCain an excuse to vote nay.
Obama also comes from a coal state, so carbon politics are in play for him too. The fact that these coal states went for Hillary (not Illinois, of course) in the primaries doesn’t mean they’ll stay in the Democratic column come November. The public is totally against paying anything more in energy costs. And the Senate Democrats are making a huge mistake forcing this vote. I don’t think the stock market wants cap-and-trade either.
But circling back to McConnell, let me repeat: He is one smart savvy conservative leader. A very impressive man.
It was a very impressive presentation of the conservative opposition to this crazy bill.
Right now Sen. McConnell is trying to put forward a bunch of amendments that would be poison pills to Democratic leader Harry Reid — including a provision to allow large-scale off-shore drilling for oil and gas. I might add that Mr. McConnell was heavily armed with facts and figures for this most impressive presentation on the program. If there’s any tougher conservative in the Senate, I don’t know who that is.
We also talked some about the importance of 41 Republican votes to stymie Democratic plans in a number of areas. Of course, Mr. McConnell’s crystal ball for November is not perfect. But he made a strong case for electing Republicans to stop the threat of a three-house Democratic sweep.
He also talked about stopping the union agenda — which is very much a part of Obama’s campaign. Especially the card-check bill, which would end the secret ballot for union organizing in businesses. This bill was stopped once last year, but it will come up again if Obama wins.
I also asked McConnell how he would deal with John McCain’s support of cap-and-trade. McConnell said he had no idea if McCain supported the current Democratic bill. But he said his Republican members are opposed to this bill.
Steve Moore of the WSJ editorial board called in this morning to remind me that both Obama and McCain have critical cap-and-trade votes in front of them. I call it carbon politics. Think Kentucky. West Virginia. Pennsylvania. Ohio. These could be very important states in November.
John McCain has an out by citing India and China, countries that of course will not be subjected to a U.S. congressional bill. That dodges the bigger points about the flaws of cap-and-trade, but it could give McCain an excuse to vote nay.
Obama also comes from a coal state, so carbon politics are in play for him too. The fact that these coal states went for Hillary (not Illinois, of course) in the primaries doesn’t mean they’ll stay in the Democratic column come November. The public is totally against paying anything more in energy costs. And the Senate Democrats are making a huge mistake forcing this vote. I don’t think the stock market wants cap-and-trade either.
But circling back to McConnell, let me repeat: He is one smart savvy conservative leader. A very impressive man.
Thursday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE MARKETS, DOLLAR, OIL, ECONOMY & MORE...Our stock market and economic all-stars will discuss and debate all the latest news, trends and developments affecting investors.
On board:
*Art Laffer, economist and chairman of Laffer Associates
*Mike Ozanian, Forbes Magazine Senior Editor
*Andy Busch, global FX strategist at BMO Capital Markets
*Stefan Abrams, Bryden-Abrams Investment Management managing partner
IS FOOD THE NEW GOLD?...(Click here to read today's New York Times story on this subject.) On to discuss are Brad Cole, president of Cole Partners Asset Management and Kevin Kerr, president of Kerrtrade.com & editor of MarketWatch's Global Resources.
The market panel will also weigh in on this topic.
DEBATE: THE CLIMATE CHANGE BILL...Squaring off this evening on this controversial bill will be Senator Bernie Sanders (I-VT) and Senator Kit Bond (R-MO).
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Worth Reading
McCain Should Pick Sarah Palin for VP – Jack Kelly in RealClearPolitics
At 44, Sarah Louise Heath Palin is both the youngest and the first female governor in Alaska's relatively brief history as a state. She's also the most popular governor in America, with an approval rating that has bounced around 90 percent.Click here to read.
This is due partly to her personal qualities. When she was leading her underdog Wasilla high school basketball team to the state championship in 1982, her teammates called her "Sarah Barracuda" because of her fierce competitiveness.
Two years later, when she won the "Miss Wasilla" beauty pageant, she was also voted "Miss Congeniality" by the other contestants.
Sarah Barracuda. Miss Congeniality. Fire and nice. A happily married mother of five who is still drop dead gorgeous. And smart to boot.
But it's mostly because she's been a crackerjack governor, a strong fiscal conservative and a ferocious fighter of corruption, especially in her own party . . .
Wednesday, June 04, 2008
Wednesday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE MARKETS, BERNANKE, ECONOMY & MORE...Our stock market all-stars will weigh in with their perspective on all the news, trends and developments affecting investors including inflation and the dollar.
On board:
*Don Luskin, chief investment officer at Trend Macro
*Jared Bernstein, senior economist, Economic Policy Institute
*Jimmy Pethokoukis, senior writer, U.S. News & World Report
*Herb Greenberg, principal at GreenbergMeritz Research & Analytics
Also...New York Times chief mergers & acquisitions reporter Andrew Ross Sorkin will be joining us with his take on Lehman Brothers and other related news.
DEBATE: PRIMARY POLITICS...Leon Panetta, former Clinton White House chief-of-staff will square off with the Wall Street Journal's Steve Moore on a number of issues including whether Hillary is positioning herself as Obama's vice president.
POSSIBLE MCCAIN VEEP?...Gov. Tim Pawlenty of Minnesota will join us for a one-on-one interview on a host of subjects including speculation that he's on McCain's veep short list.
GLOBAL WARMING BILL...Senate Minority Leader Mitch McConnell (R-KY) will be aboard to offer his thoughts on this controversial bill.
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Stocks Still Don't Like Obama
Last night on Kudlow & Company we discussed the theory suggesting the stock market sold off a hundred points earlier in the day -- despite Fed head Ben Bernanke's bullish King Dollar statement -- because of the AP headline announcing Obama's impending nomination.
As the chart above clearly illustrates, the market nosedived mere moments after the AP story broke.
My friend Bill Griffeth also mentioned this interesting coincidence earlier today on CNBC's Power Lunch:
We couldn’t help but notice yesterday, around 1:25 pm ET, when the Associated Press came out and announced that it had done the math and figured that Obama truly had virtually clinched the nomination, it was at that precise moment, when the stock market started to fall. And the Dow, which had been slightly positive, virtually unchanged, suddenly had a 100-point decline…Is it possible that Wall Street is indeed rattled by [Obama’s] policies as it pertains to taxes? And, most especially, his desire to increase - almost double - the capital gains tax?
Sure makes you wonder, doesn't it?
Hard-Dollar Addendum
Whenever I create lists of friends and colleagues for anything I always forget a few important names. So let me amend yesterday’s Bernanke dollar blog with some supply-side friends who also have been calling for hard money for a long time.
Namely, my friend Steve Forbes, the editor and publisher of Forbes magazine. Steve has been indefatigable in writing editorial after editorial for years about the need for a hard dollar. Because of my senior memory, not only did I forget Steve in yesterday’s blog, but also the fact that he is a McCain economic advisor, having first counseled Rudy Giuliani earlier in the year. And that brings me to Jack Kemp, who is also a McCain advisor and who also has been tireless in his advocacy of a strong dollar.
Forgetting these two names is my bad. I apologize to them and I hope they and readers will forgive me.
And two more names: the tireless husband-and-wife team of Seth Lipsky, editor of the New York Sun, and his bride Amity Shlaes. In fact, the editorial page of the Sun is always reminding us of the declining gold value of the U.S. dollar, just in case we forget. Seth and Amity are of course graduates of the Robert Bartley Wall Street Journal hard-money school. (As, in effect, we all are.)
Ben Bernanke didn’t solve the dollar problem yesterday. But the Fed head’s speech was a very large and important first step toward recognizing that dollar neglect is associated with higher inflation. The greenback has been broken and needs to be fixed. Let’s see what happens from here.
Namely, my friend Steve Forbes, the editor and publisher of Forbes magazine. Steve has been indefatigable in writing editorial after editorial for years about the need for a hard dollar. Because of my senior memory, not only did I forget Steve in yesterday’s blog, but also the fact that he is a McCain economic advisor, having first counseled Rudy Giuliani earlier in the year. And that brings me to Jack Kemp, who is also a McCain advisor and who also has been tireless in his advocacy of a strong dollar.
Forgetting these two names is my bad. I apologize to them and I hope they and readers will forgive me.
And two more names: the tireless husband-and-wife team of Seth Lipsky, editor of the New York Sun, and his bride Amity Shlaes. In fact, the editorial page of the Sun is always reminding us of the declining gold value of the U.S. dollar, just in case we forget. Seth and Amity are of course graduates of the Robert Bartley Wall Street Journal hard-money school. (As, in effect, we all are.)
Ben Bernanke didn’t solve the dollar problem yesterday. But the Fed head’s speech was a very large and important first step toward recognizing that dollar neglect is associated with higher inflation. The greenback has been broken and needs to be fixed. Let’s see what happens from here.
Tuesday, June 03, 2008
Special Tuesday Night Primary Politics Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:PRIMARY POLITICS: HILLARY'S FINAL HOUR?...Joining us to discuss all the latest Hill-Bama and McCain election news and developments are Lanny Davis, former Special Counsel to President Clinton and Ben Ginsberg, partner and lobbyist for Patton Boggs LLP. We'll also feature minute-by-minute coverage of the final primary returns.
KING DOLLAR, THE MARKETS, ECONOMY & MORE...Our stock market all-stars will discuss and debate all the latest news, trends and developments affecting investors including Fed Chair Bernanke's strong dollar comments earlier today.
On board:
*Quentin Hardy, Forbes Silicon Valley bureau chief
*Jerry Bowyer, chief economist, Benchmark Financial Network
*Dennis Kneale, CNBC media & technology editor
*Vince Farrell, managing director, Scotsman Capital
OIL, ENERGY & MORE...Democratic Governor Brian Schweitzer from Montana will join the market panel in a discussion on energy and his belief that Montana is sitting on as much as 40 billion barrels of untapped oil.
POSSIBLE MCCAIN VEEP?...Gov. Tim Pawlenty of Minnesota will join us in a one-on-one interview on a host of subjects including speculation that he's on McCain's veep short list.
PRIMARY POLITICS DEBATE...Dick Armey, former GOP House Majority Leader and chairman of FreedomWorks will square off against David Mixner, author and political strategist.
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Big News for King Dollar
Supply-siders have been warning of cheap-dollar inflation for quite some time. Think David Malpass, John Ryding, Brian Wesbury, Mike Darda, Don Luskin, John Tamny, Wayne Angell, Jerry Bowyer, and myself. I’ve even taken to calling the weak dollar the U.S. peso. There’s also Paul Gigot and Steve Moore over at the Wall Street Journal editorial page, both prominent leaders in the movement to resurrect King Dollar.
And today we received some great news on this front.
Fed head Ben Bernanke, finally figuring out that the weak dollar is driving up inflation, has signaled a major policy shift toward a strong dollar. In fact, Bernanke has not only acknowledged that the cheap dollar has caused “the unwelcome rise in import prices and consumer price inflation” -- as booming oil and commodity prices have leaked into U.S. inflation through the cheap dollar -- he may well have set a floor underneath the greenback. This is big news.
Now, isn’t it about time Sen. McCain made a beeline for a strong dollar? That’s my take. You can read about it here in my column for National Review Online.
And today we received some great news on this front.
Fed head Ben Bernanke, finally figuring out that the weak dollar is driving up inflation, has signaled a major policy shift toward a strong dollar. In fact, Bernanke has not only acknowledged that the cheap dollar has caused “the unwelcome rise in import prices and consumer price inflation” -- as booming oil and commodity prices have leaked into U.S. inflation through the cheap dollar -- he may well have set a floor underneath the greenback. This is big news.
Now, isn’t it about time Sen. McCain made a beeline for a strong dollar? That’s my take. You can read about it here in my column for National Review Online.
Monday, June 02, 2008
Monday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE MARKETS, ECONOMY, FINANCIAL DOWNGRADES & MORE...Our stock market all-stars will discuss and debate all the latest news, trends and developments affecting investors.
On board:
*Joe Battipaglia, market strategist at Stifel Nicolaus
*Rich Karlgaard, publisher of Forbes magazine
*Zachary Karabell, President of River Twice Research
*Fritz Meyer, senior investment officer with A I M Advisors
POLITICAL RUNDOWN...Our political panel will discuss and debate whether Hillary Clinton really is a better candidate than Obama, the ongoing internal Democratic divide, and we'll also take a look ahead at tomorrow's primaries.
On board:
*Lanny Davis, former Special Counsel to President Clinton
*Ben Ginsberg, partner and lobbyist for Patton Boggs LLP
*Keith Boykin, New York Times bestselling author and former Clinton White House aide
PRIMARY POLITICS...Pollster Scott Rasmussen from Rasmussen Reports will offer up all the latest election perspective.
WASHINGTON TO WALL STREET: RECESSION ELECTION, CAP & TRADE & MORE...The Dynamic Duo will be squaring off tonight. Battling it out are former Clinton labor secretary and author Robert Reich and The Wall Street Journal's Steve Moore.
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Cap-and-Trade Craziness
From the Editors over at NRO:
It is difficult to believe that at a time when the U.S. economy is struggling to adjust to record-high energy prices, the Senate is debating a bill that would make prices even higher. If you want to know why a group of responsible politicians would support such an idea, look no further than an analysis of the revenues the federal government stands to gain from a cap-and-trade program. The EIA estimates that by 2030 the federal government will be auctioning 84 percent of the program’s carbon allowances, with total revenues of anywhere from $326 billion to $853 billion. If you think that money will go toward deficit-reduction, dream on.
Click here to continue reading.
As I asked in my latest column, why do we need a planned economy for energy or anything else? Why not a fully deregulated free market for energy where prices allocate production and consumption?
Why not allow higher oil prices to open the door to a full portfolio of energy resources, including offshore drilling, Alaska, nuclear power, oil shale, conversion of coal and natural gas to liquid fuel, and the development of so-called alternative-energy sources such as solar, wind, and various cellulosic investments (although this latter group may never contribute more than 10 percent to our energy needs)?
A true free-market approach wouldn’t pick winners and losers with heavy subsidies or penalties.
K&C Quotables
Some notable quotes from Friday night's Kudlow & Company:
The Smart Investor This is one of those times when you have to be very discriminating when you talk about the “economy.” Because the “economy” includes things that are in outright depression like housing, and it includes things that are in an outright boom like technology. For instance, high-tech industrial production is at all-time highs, and going at roaring growth rates, even as overall industrial production has flattened out a little bit in the slowdown. So, just as people say, ‘It’s not a stock market, it’s a market of stocks,’ it’s not an “economy.” It’s a portfolio of micro-economies. And the smart investor looks at these sectors, one at a time, and figures out the winners and the losers. [The smart investor] steps aside from some of this falsely macro analysis where you try to make one size fits all. We are in a diversified situation.
-Don Luskin, chief investment officer at Trend Macro
Washington’s Attack on Coal I think cap-and-trade is just crazy. Because most of the coal use increase in the world, about 97 percent, is outside the United States. So if we’re really concerned about climate change, it won’t matter what we do. And all these new rules effectively just increase carbon emissions around the world, they don’t do anything to truly decrease carbon emissions…We’re fortunate at Massey to benefit from the coal use around the world because we export a lot of coal. But as far as getting free of imported energy in this country, the policies are exactly the reverse of what they ought to be…It just doesn’t make any sense at all because the world is going to use coal. And if the U.S. doesn’t use it, we’re going to be disadvantaged.
-Don Blankenship, chairman/CEO of Massey Energy
Global Warming Hoax Manmade global warming is increasingly found to be a hoax, that it is not true. And our responses to this [hoax] through cap-and-trade is going to raise the price of energy. It’s going to make Americans less competitive. And then guess what’s going to happen? Congress is going to come in and try to correct a problem that it created. And the so-called solutions to the problems that they create will create other problems…Americans need to be aware that this whole global warming argument is a way for the government to come in and control our lives. That’s the whole agenda behind these environmentalists. They want government to have greater power to control our lives.
-Walt Williams, professor of economics at George Mason University
More on Mac Let’s remember that [John McCain is] the only candidate running for president who stood up and said the Farm Bill – which just passed – is an abomination. It’s an abomination because it subsidizes American agriculture at a time when, as you point out, food prices are at record highs. And it is also a bill laden with pork—absolutely laden with pork.
-Carly Fiorina, RNC Victory Chair, former CEO of Hewlett-Packard
The Smart Investor This is one of those times when you have to be very discriminating when you talk about the “economy.” Because the “economy” includes things that are in outright depression like housing, and it includes things that are in an outright boom like technology. For instance, high-tech industrial production is at all-time highs, and going at roaring growth rates, even as overall industrial production has flattened out a little bit in the slowdown. So, just as people say, ‘It’s not a stock market, it’s a market of stocks,’ it’s not an “economy.” It’s a portfolio of micro-economies. And the smart investor looks at these sectors, one at a time, and figures out the winners and the losers. [The smart investor] steps aside from some of this falsely macro analysis where you try to make one size fits all. We are in a diversified situation.
-Don Luskin, chief investment officer at Trend Macro
Washington’s Attack on Coal I think cap-and-trade is just crazy. Because most of the coal use increase in the world, about 97 percent, is outside the United States. So if we’re really concerned about climate change, it won’t matter what we do. And all these new rules effectively just increase carbon emissions around the world, they don’t do anything to truly decrease carbon emissions…We’re fortunate at Massey to benefit from the coal use around the world because we export a lot of coal. But as far as getting free of imported energy in this country, the policies are exactly the reverse of what they ought to be…It just doesn’t make any sense at all because the world is going to use coal. And if the U.S. doesn’t use it, we’re going to be disadvantaged.
-Don Blankenship, chairman/CEO of Massey Energy
Global Warming Hoax Manmade global warming is increasingly found to be a hoax, that it is not true. And our responses to this [hoax] through cap-and-trade is going to raise the price of energy. It’s going to make Americans less competitive. And then guess what’s going to happen? Congress is going to come in and try to correct a problem that it created. And the so-called solutions to the problems that they create will create other problems…Americans need to be aware that this whole global warming argument is a way for the government to come in and control our lives. That’s the whole agenda behind these environmentalists. They want government to have greater power to control our lives.
-Walt Williams, professor of economics at George Mason University
More on Mac Let’s remember that [John McCain is] the only candidate running for president who stood up and said the Farm Bill – which just passed – is an abomination. It’s an abomination because it subsidizes American agriculture at a time when, as you point out, food prices are at record highs. And it is also a bill laden with pork—absolutely laden with pork.
-Carly Fiorina, RNC Victory Chair, former CEO of Hewlett-Packard
Friday, May 30, 2008
Friday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE STOCK MARKET AND ECONOMY...Our stock market and economic all-stars will discuss and debate all the latest news, issues, trends and developments affecting investors.
On board:
*Don Luskin, chief investment officer at Trend Macro
*Michael Pento, Delta Global Advisors, senior market strategist
*Jerry Bowyer, chief economist at BenchMark Financial Network
*Jared Bernstein, senior economist, Economic Policy Institute
THE PUSH FOR CLEAN COAL...Our panel will weigh in with its perspective on the push for clean coal and the obstacles standing in its way.
On board:
*Don Blankenship, CEO of Massey Energy
*Jerry Bowyer, chief economist at BenchMark Financial Network
*Jared Bernstein, senior economist, Economic Policy Institute
*Walt Williams, economics professor at George Mason University
MCCAIN...Carly Fiorina, former CEO of Hewlett-Packard and economic adviser to John McCain will join us in a one-on-one discussion.
MONEY POLITICS...Squaring off on a host of Washington to Wall Street topics this evening will be Walt Williams, economics professor at George Mason University and Jared Bernstein, senior economist, Economic Policy Institute.
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
Thursday, May 29, 2008
Good News for Goldilocks
To recoin U.S. News blogger Jimmy Pethokoukis, “No Recession. No Bear Market. Bears Weep.” Today’s revised report on first-quarter GDP moved the number up to 0.9 percent at an annual rate versus a previous 0.6 percent. Year-over-year real GDP is 2.5 percent. Incidentally, brand new numbers on profits show a much-stronger-than-expected gain. Profits are the mother’s milk of stocks and the economy. So this is very positive.
Also noteworthy is a low 2.1 percent core inflation rate, with the headline rate coming in at 3.5 percent. Look for these numbers to rise as a consequence of the cheap dollar and the commodities boom in energy and elsewhere.
However, markets are smarter than GDP reports. And stocks are up over 100 today, continuing their gains of Tuesday and Wednesday. Even more significant, Treasury market rates are rising a lot, with the 10-year bond now all the way up to 4.11 percent. This is important because almost all the interest-rate gain comes from rising real rates, a signal of increased credit risk-taking and an end to the banking-crisis run for safety.
Rising real rates also foreshadow a stronger economy in the future. And they are adding support to the beleaguered U.S. dollar. So gold is plummeting and oil prices are retreating. This is exactly what goldilocks wants to see.
Instead of safe-harboring in commodities, investors are going back to stocks because the fundamental U.S. economic picture and the banking-credit picture are getting better. The combination of a rise in rates, a stabilizing dollar, and plunging commodities could be a tectonic sea change — and a very positive one at that.
Think of it this way: Investors now seem to want to loan money to job-creating businesses rather than Uncle Sam. Bravo for that.
Meanwhile, money-market futures are predicting Fed rate hikes next year and maybe beginning later this year. That would lend strength to the dollar. And that in turn would contain inflation. Anticipating this, the plunge in gold could well be a leading indicator of a big decline in oil. Now if only Treasury man Paulson would call for an appreciating dollar.
Of course, hovering over this good news is the threat of a three-house Democratic sweep in November. The mere thought of Barack Obama, Harry Reid, and Nancy Pelosi all at once is a potential suppressant for the economy’s improving animal spirits. But let’s cross that bridge when we get to it.
John McCain is running even with Obama, and that’s good. Hopefully Sen. McCain will talk tax cuts rather than cap-and-trade. That would be very good indeed.
Also noteworthy is a low 2.1 percent core inflation rate, with the headline rate coming in at 3.5 percent. Look for these numbers to rise as a consequence of the cheap dollar and the commodities boom in energy and elsewhere.
However, markets are smarter than GDP reports. And stocks are up over 100 today, continuing their gains of Tuesday and Wednesday. Even more significant, Treasury market rates are rising a lot, with the 10-year bond now all the way up to 4.11 percent. This is important because almost all the interest-rate gain comes from rising real rates, a signal of increased credit risk-taking and an end to the banking-crisis run for safety.
Rising real rates also foreshadow a stronger economy in the future. And they are adding support to the beleaguered U.S. dollar. So gold is plummeting and oil prices are retreating. This is exactly what goldilocks wants to see.
Instead of safe-harboring in commodities, investors are going back to stocks because the fundamental U.S. economic picture and the banking-credit picture are getting better. The combination of a rise in rates, a stabilizing dollar, and plunging commodities could be a tectonic sea change — and a very positive one at that.
Think of it this way: Investors now seem to want to loan money to job-creating businesses rather than Uncle Sam. Bravo for that.
Meanwhile, money-market futures are predicting Fed rate hikes next year and maybe beginning later this year. That would lend strength to the dollar. And that in turn would contain inflation. Anticipating this, the plunge in gold could well be a leading indicator of a big decline in oil. Now if only Treasury man Paulson would call for an appreciating dollar.
Of course, hovering over this good news is the threat of a three-house Democratic sweep in November. The mere thought of Barack Obama, Harry Reid, and Nancy Pelosi all at once is a potential suppressant for the economy’s improving animal spirits. But let’s cross that bridge when we get to it.
John McCain is running even with Obama, and that’s good. Hopefully Sen. McCain will talk tax cuts rather than cap-and-trade. That would be very good indeed.
Thursday Night Lineup
On CNBC's Kudlow & Company at 7pm ET tonight:THE STOCK MARKET, ECONOMY, OIL & MORE...Our stock market all-stars will weigh in with their perspective on all the latest news, trends and developments affecting investors.
On board:
*Jack Gage, Forbes magazine associate editor
*Vince Farrell, managing director, Scotsman Capital
*John Browne, senior market strategist at Euro Pacific Capital
ENERGY, THE COAL INDUSTRY & THE MARKETS...Brett Harvey, CEO of CONSOL Energy, will join us for a one-one-one interview then join our market panel for further discussion.
Also on board:
*Joe Battipaglia, market strategist at Stifel Nicolaus
*Andy Busch, global FX strategist at BMO Capital Markets
*Jack Gage, Forbes magazine associate editor
PRIMARY POLITICS...Frank Newport, editor-in-chief of the Gallup Poll, will deliver all the latest insight on the race for the White House as well as other election perspective.
WASHINGTON TO WALL STREET DEBATE...Squaring off this evening will be Ben Ginsberg, partner and lobbyist for Patton Boggs LLP and Democratic strategist Julian Epstein.
Please join us at 7pm ET on CNBC for another free market edition of Kudlow & Company.
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