A Worrisome 100

From Larry Kudlow at National Review:
President Obama’s first 100 days are nearly over and his supporters are already suggesting that he is the greatest president of all time. Hmm. Of course, only history will tell. But my single-greatest concern remains the fact that Mr. Obama is moving the country away from democratic free-market capitalism and toward a big-government, command-and-control vision of our nation’s economy. What we are witnessing is a triumph of government bureaucrats over entrepreneurs, investors, and small businesses.
President Obama has spent more money in his first 100 days than any president in U.S. history. In fact, the Pelosi-Reid budget Congress just passed with Obama’s blessing doubles the debt in five years, and triples it in ten. To give some perspective, that debt level is higher than the combined debt levels generated under every president from George Washington to George W. Bush. This will almost certainly lead to much higher tax rates down the road. Incidentally, all this talk of raising tax rates on investors and businesses, especially offshore companies, robs the incentive power from entrepreneurship.
Over on the banking front, Team Obama is using TARP as a bullying club to force government control on the country’s financial institutions. There is no exit strategy; no endgame in sight. TARP itself is riddled with criminal-enterprise undertones. According to Special Inspector General Neil Barofsky’s report released earlier this week, the $700 billion program is “inherently vulnerable to fraud, waste and abuse.” The proof is in the pudding: Barofsky says he has already opened up 20 separate criminal investigations and six audits into whether taxpayer dollars are being stolen or wasted. Rest assured that they are, and that more will be revealed on that front.
As for President Obama’s cap-and-trade-and-tax proposal, it represents perhaps the most massive big-government restructuring of our economy in American history. It is a radical, regulatory, command-and-control nightmare. If this tax experiment passes, it will choke and kill the economy.
Universal health care is another illustration of big-government intrusion, and it potentially could result in a government takeover of 16 percent of the economy. It would give government unprecedented power to set prices and allocate resources. And yes, the threat of rationing would be very real.
All of these are worrisome threats to our long-run economic future.

Obama's 'War On Growth'

From Larry Kudlow at CNBC:
Let me be very clear on the economics of President Obama’s State of the Union speech and his budget.
He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.
That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all — either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.
Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.
This is nearly double the government-spending low-point reached during the late 1990s by the Gingrich Congress and the Clinton administration. While not quite as high as spending levels in Western Europe, we regrettably will be gaining on this statist-planning approach.
Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.
And as far as middle-class tax cuts are concerned, Obama’s cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.
The tax hikes will generate lower growth and fewer revenues. Yes, the economy will recover. But Obama’s rosy scenario of 4 percent recovery growth in the out years of his budget is not likely to occur. The combination of easy money from the Fed and below-potential economic growth is a prescription for stagflation. That’s one of the messages of the falling stock market. Essentially, the Obama economic policies represent a major Democratic party relapse into Great Society social spending and taxing. It is a return to the LBJ/Nixon era, and a move away from the Reagan/Clinton period. House Republicans, fortunately, are 90 days sober, as they are putting up a valiant fight to stop the big-government onslaught and move the GOP back to first principles.
Noteworthy up here on Wall Street, a great many Obama supporters — especially hedge-fund types who voted for “change” — are becoming disillusioned with the performances of Obama and Treasury man Geithner.
There is a growing sense of buyer’s remorse.
Well then, do conservatives dare say: We told you so?