LARRY KUDLOW: Big government socialism is a failure
Holistically, big government socialism is a failure and that's the subject of the riff. No matter what she may say, Kamala Harris is a big government socialist, whose alleged economic plan is a classic example of big government socialism.
Noteworthy, a TIPP/Insights poll of 1,488 adults shows that 54% say Kamala Harris' ideas lean toward socialism. 38% of Democrats, 53% of Republicans, 49% of independents. So, it’s across the board and, as I've said many, many times, the TIPP poll has been scored as the most accurate in recent presidential elections.
Indeed, the subtitle of the article from TIPP/Insights is: "Her holistic socialism exposes deep economic ignorance and total unpreparedness." So, take a listen to Kamala's holistic word salad yesterday in Pittsburgh:
KAMALA HARRIS: "You know, homeownership for too many people in our country now is elusive. You know, gone is the day of everyone thinking they could actually live the American dream. // And looking holistically at the connection between that and housing, and looking holistically at the incentives // to actually engage in planning in a holistic manner." // PITTSBURGH, PA, WEDNESDAY: "Let us be inspired by what is possible. // Let it always inspire us. // And let that then inspire us by helping us to be inspired to solve the problems that so many face."
Yesterday, she unveiled her third economic plan in her two-month long candidacy. It was basically just a repeat of her price controls, $25,000 free money that will boost home prices even more, a $6,000 refundable child tax credit that lacks work requirements and costs over $1 trillion.
Plus, of course, repealing the highly successful Trump tax cuts, which boosted blue-collar wages, brought down the poverty rate, and produced record-low minority unemployment. Of course, Kamala keeps saying it only benefited the rich, which has been disproven time and again. Real wages went up 7.7% under Mr. Trump, but they fell 2.1% under Biden-Harris.
The only sort of new policy is $100 billion in tax credits, aimed at favored industries, but targeted tax credits never work. Better to let people and businesses keep their own money. They will spend it more wisely than federal bureaucrats ever could.
Biden-Harris spent trillions of dollars on targeted tax credits, subsidies, and grants and it – holistically – came to nothing. Please see the WSJ editorial dated September 23, 2024: "The Biden manufacturing boom that isn’t" and the subheading: "US industry output has been flat for two years, despite huge subsidies."
They note that spending on construction of new factories has doubled from the subsidies and rich tax credits – the misnamed Inflation Reduction Act cost $1.2 trillion – but the ISM purchasing managers index for manufacturing has been declining for two years right after the IRA and CHIPS Act. Investment in new industrial equipment has been noticeably weaker under Mr. Biden than Mr. Trump.
Biden-Harris like to boast about creating 800,000 new manufacturing jobs, but, actually, virtually all of them were bounce-backs from the pandemic. Factually, though, manufacturing job growth has since been flat for two years – even with all the Biden-Harris spending. Under Trump, about 450,000 manufacturing jobs were created and key targeted industries like semiconductors and batteries have experienced significant job losses, while real average weekly wages for manufacturing workers are 2.7% lower than in January 2021 when Biden-Harris came into office.
This is why state directed assistance, whether spending or tax credits, never works. The free market, however, does work. Donald Trump will lower the corporate tax rate across the board from 21% to 15% for domestic producers, but he’s not going to tell them how to spend their money, or on what products or innovations or equipment.
Trump, by the way, would provide 100% full expensing for depreciation write-offs – Harris would end this. Of course, she wants to raise the top corporate rate to 28%, making the U.S. uncompetitive in the global race for business and capital and she would abolish the 199A deduction, which would destroy the roughly 26 million small businesses who could no longer deduct 20% of their income from taxation.
Holistically, this is all insanity. Yes, she worked hand in glove with Joe Biden for nearly four years, and, yes, all that really happened was they spent a fortune to bankrupt federal finances, and got virtually nothing for it – in terms of private sector investment, jobs, and wages. It has all gone nowhere.
Oh, did I forget, the inflation rate in the past three and a half years has averaged 5.7% annually, compared to only 1.9% under Mr. Trump. Cumulatively, the cost of living went up over 20% under Biden-Harris, and much more for daily consumer essentials and, of course, the peak inflation rate of 9.1% was the highest in 40 years.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Well, it’s true that radical Federal Reserve tightening has brought inflation down to just under 3%, but that is still well above the Fed’s 2% target, even at this late date.
So, you know what, folks? Holistic big government socialism doesn’t work and you know what else? There’s a real capitalist free-enterpriser out there who is campaigning to overturn it. That’s the riff.
This article is adapted from Larry Kudlow’s opening commentary on the Sept. 26, 2024, edition of "Kudlow."