TCS Daily


The Economics of a Three-Race GOP Sweep

By Larry Kudlow - November 3, 2009 12:00 AM

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.


This article first appeared on Kudlow's Money Politic$.
Categories:

39 Comments

I'm still spazzed about New Jersey
I mean, for the Messaihcrats losing Tony Soprano Country now is like Stalin losing Moscow to the Wehrmacht in 1944 (when Russian troops were raping eastern Germany with impunity).

Even more amazing is the exit polls. In New Jersey, 55% or so said that Obama wasn't the reason why they voted out Corizine. But that means, 45% DID vote because of the Messiah.

Then last night was the pilot episode of 'V' on ABC. It was totally a parable on the Messiah Takeover. The Obama Alien even offers universal health care to sucker humanity. She also handles the press the same way the real White House does: "You want access? Then you tow the Party Line and never, ever make us look bad."

Freaky Night!

I guess TCS is dead
Nobody posts anymore. Roy is gone.

I guess it's only a matter of time before the site is foreclosed, too.

:(

Life without the Left
It's just not the same without left leaning lunacy provided by Roy and friends. Perhaps one on your postings was too much for him - the straw that broke the camel's back - and he finally saw the light, and converted. Or, perhaps he is in DC, campaigning for the next Czar position - the Blog Czar. (Who knows. Maybe he actually got a job, and can no longer devote 16 hours a day to filling cyberspace with Roy Wisdom. Yeah, right.)

Lefty loons are out there.
Check out the comments on RCP.

The Long March
>"what needs to be done to put a halt to this push for socialism."

Any "push" for socialism will succeed in direct proportion to the amount of citizens who actually believe a more socialistic route is preferable. This is a matter of both ideology and education: A percentage (the exact amount can be argued) of the voting populous is ideologically committed to converting the American governmental landscape into something resembling the socialism prevalent in European countries -- they simply believe it to be a superior system. As committed ideologues they have fundamental, irreconcilable differences with those of us who prefer a free-market, minimal gov't system. Alas, many of them have been taught their beliefs via the Leftist controlled primary and secondary education institutions (the vaunted "Long March" being somewhat complete).

Thus, the best chance at fighting the gradual slide down that Euro-Socialist path is to break the stranglehold on our education system held by the (leftist) teachers unions and begin offering alternative education programs that actually teach solid economic, history, science, math, literature, and writing/debate courses instead of the prevalent touchy-feely, "self-esteem" improvement bullshit and America-and-Capitalism-suck curricula that are unfortunately so prevalent today. How such a change can possibly be instituted is, however, beyond me -- the entrenchment of the unions and their indoctrination agenda is pretty solid. I'd opt for a voucher system where at least some competition to the educational status quo could be implemented, but that option hasn't seemed to gain much traction.

We can fight with libertarians.
I agree with Michael Medved that Libertarians are loosertarians as they don't prioritize their platform.

I think conservatives and libertarians can agree the Constitution should be followed. Let the states fight internally over legislating morality.

Yeah, they had the original on SyFy to run up for the new one
As for blog: http://shrekgrinch.multiply.com/journal

I hope that is what it is...
...not because he cashed in his last Social Security check, if you catch my drift.

And we need to obliterate the unions
...with two simple changes:

1) Make every state a 'right to work' state. Meaning, you can forgo union representation simply by informing your employer and it won't impact your job.

2) Use the tax code! Why not? We all know well that works. Put a 100% tax on union dues -- payable by the union members and withheld in their payroll checks before they even see it. The only want to reduce the tax amount for their members, the union would have to reduce the dues.

Enact both of those immediately (no phase in) and most people will walk from their unions within a month or two.

Let's see how well they pour money into ACORN and beat up people at the Town Halls after that.

I love it
Good for Kudlow to put himself out there on something that can actually be proven. GOP sweep? Two out of three ain't bad. But lets look closer... The two wins were moderate Republicans and the one loss was an example where conservatives tried to strong arm the locality and voila! The demoncrats take the seat for the first time in 120 years. Way to go conservatives! Let the rationalization continue. Lets hear how this was everyone's fault but conservative's.

And I love how Kudlow tries to spin the noise of some right wing conservative crackpots as a public revolt against health care reform. Despite the fact polls show the majority of the public support reform. Ah, if we didn't have reality, conservatives might be right once in a while.

Once again, Bob Jones lies through his teeth
NY-23 was represented more than a dozen times by Democrats over the past 120 years. The last one left in 1993.

And, more people voted against the Democrat than voted for him, when you add up all the votes.

It wasn't the conservatives' fault. It was the Republican Party's fault. Specifically, the local party bosses who picked ScuzzyWuzzy in a smoke-filled room. She wasn't chosen in primary election.

"Despite the fact polls show the majority of the public support reform"

No, they support reforming it health care in principle. They DON'T support the plans the Dems are trying to shove down their throats. Seniors oppose it 2:1.

It gets even worse! Pelosi's MessiahCare Bill: Pay $15k/yr for policy or get 5 years in jail
and $250,000 in fines.

Man, I sure hope the House MessiahCrats vote for this! I really do. Such an act of wanton political suicide would convince even the Bob Joneses of the world that the MessiahCrats have completely lost it.

Even if it passes the House, the Senate will kill it. Thus all those endangered House MessiahCrats right of Barney Frank will have signed their own 2010 death warrants for nothing.

http://republicans.waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=153583

How long will the democrat stay in office?
There is another election next year.
Maybe the Republicans will try to pick a winning candidate this time.

Hoffman would have carried it if the 3rd party RINO didn't leech off votes from him
I sure hope the Rep party hacks get the message. They can be as dense as Messiahcrats at times.

Socialism by default...
The necessities of life in America are fundamentals that are inviolable. Inalienable rights are an entirely different matter and we might argue pointlessly whether Health Care is a right or a privilege...that might reasonably be denied to those who can’t afford to see a doctor or purchase medicine in our free market economy. By this we are mostly referring to undocumented immigrant workers but we hate to think of ourselves as racists or prejudicial.

Nevertheless, chronic dialysis treatments are underwritten 100% by the government and H1N1 vaccines are distributed without charge or checking anyone's birth certificate. This is socialized medicine and we don’t hear anyone from the Right demanding that people without kidney function should simply be left to die or that pregnant women and small children from poor households should be sacrificed to the Swine Flu for ideological reasons.

In the end, health care goods and services are necessities of life and they must default to the government if the industry continues to insist on its anti-trust waivers and its "what the market can bear" pricing strategies with more of us being left without medicine.

This discussion about insurance is fruitless. The underlying problem is that the pharmaceutical industry and the hospital holding companies have been left to regulate themselves (like the banks) and they are taking as much as they can, as fast as possible for as long as we will let them. Because they know this can't last forever.

Unless we correct the industry and prices start dropping like for any other mature business, this foolishness must end in a socialistic solution that will please the liberals, of course, but demonstrate to the libertarians that the invisible hand of Adam Smith was crippled by the Industrial Revolution. In the Supply Side economy, market dominance by multinational corporations trumps market forces if competition is restricted in a consolidated industry. The FDA carries that water for the health care players. And the politicians are on the payroll. PACs and lobbyists are extensions of corporate entities. Legislation and enforcement waivers are priced as bargains for them.

We all mean well. The libertarians sincerely believe we must take our medicine, let the economy collapse back into the Gold Standard and a more sustainable practice of capitalism typical of 1776 when Adam Smith published his Wealth of Nations. That's when we were writing our Constitution after all and America should return to its simpler origins...and an ideology without any of this confusing talk about the modern economy that our heroes like John McCain are actually proud they can't understand.

The liberals also don't grasp capitalism. But they do know they hate the capitalists. So let the economy fail and declare that capitalism is dead already. Everything we really must have will default to the government as entitlements and we will tax this economy ruthlessly to fund our socialism.

The Greens want us to return to the Stone Age so the 0.1% of us who survive that transition (6 million is still a lot of people) will not disturb the animals chasing each other around freely. Gold will be a great currency then too...if we return to such savagery.

The rest of us just want this thing to work again. We had the same problem in 1980 when Ronald Reagan came to power to lead us out of Post-Keynesian Stagflation with our Supply Side practice of capitalism. We need that to happen again. In 2012. And we need another Republican. Because the last Republican was pretty busy doing other things and the Democrats are completely wrong about capitalism.

And the Messiahcrats fulfill Zyndry's Wish!
They passed the Pelosi Crap Sandwich in the House. 39 Messiahcrats said, "no way!" and one Republican -- some yahoo from Louisiana who apparently doesn't want to keep his job - voted with them.

Won't stand a chance in the Senate as is, either.

Amazing.

Scozzafava would have carried it if the conservative interloper didn't try to steal the whole thing
Thats golden Z. Its one thing to be unhappy about the R candidate and all that, but you're stupid if you think the message sent was a warning to Rep hacks and not conservative hacks. Who won the election? In a solidly Republican District. But whatever, you already know everything so reality means nothing to you. And therein lies the gold, you doom yourself. Blaming everyone else won't help you in the end. It only perpetuates your weakness.

Cowardly? More like smart politics
Neither side will notice he waited til the end to cast his vote. It will be no more than a campaign talking point when the time comes, he'll tell his constituents how he pandered them and thats all they'll know.

I'm so tired of this issue, I don't care what they do, as long it works. Single-payer? Do it if it works. The craziness and lies and stupidity from the right is nauseating. The cowardly way the Demoncrats are handling it is sickening. All I know is, you can't believe a darn thing you hear from a conservative republican and what you hear from a democrat will change in a couple days so don't bother believing that either. Worst of all, thats exactly how the corporations want it so they can continue to screw us for the dinero.

So, what would have been the difference?
She would have only helped the wicked witch of the west claim bi-partisan support.
The opposition party needs to be an opposition party.

Why do you care?
You claimed to be a libertarian.

Quit pretending your not a liberal, Troll
Who won the presidential election in a solidly right-of-center nation in 1992 even though he got less votes than all those who voted against him because the opposition was split between Ross Perot and Daddy Bush?

http://en.wikipedia.org/wiki/Duverger%27s_Law#How_and_why_it_occurs

What weakness? That conservatives are sticking it to the RINO hacks that control the Republican party? Do you even know what SOP for Conservatives is in these types of situations? Well, here it is:

"If the winner is a liberal, he/she HAD BETTER be a Democrat"

So, we got exactly what we wanted. No weakness there.

Cao was toast anyway
60% of this voters are black. It was a total fluke he was elected (see the William Jefferson scandal) and he sold out for 'unspecified' commitments from Obama.

And we all know how good an Obama 'commitment' is. ZILCH

He could get an African skin transplant and STILL be un-relectable. Smart politics my ass.

And, like Arlen Specter, he's a treasonous sellout. Nobody likes a traitor. The Dems will stab him in the back and support his opponent to the hilt in 2010.

Even switching parties won't save him, although I bet he'll try that too anyway.

You got exactly what you wanted?
Two moderate Republican governors and an additional Democrat in the House...

Thats what you wanted, huh?

This is exactly my point. How can you grow and learn and change if you always win and you're always right? Thats weakness. You can't rationalize that away.

You even took us in the time machine back to 1992. We could just go back to 2000 instead, when moderates gave the election to W (before he used activist judges to take it) because Gore was an idiot and no one knew how awful W would turn out to be. But wait, how does that serve to circumvent your weakness anyway? You a fan of Daddy Bush? You did say- "If the winner is a liberal, he/she HAD BETTER be a Democrat". Ha, you were right that time. :)

Yes, the conservative hacks are sticking it to the RINO hacks... and Democrats get elected. Nice work conservatives. Did you get your gratuity from Pelosi yet?

Bottom line: you will have a very hard time electing the brand of extreme conservatives that you prefer. They will never win the Executive office, because the middle picks the winner in that national race, the middle will never go for the teabagger social-ist conservative. You'll win very few Senate seats, mostly in the south, state elections are local enough you could pull it off once in a while. And you'll win a few House seats, because those really are local elections, and as long as you don't try to strongarm the locals' pick for the nomination (again), you'll get a few through.

I'm helping you way too much, but I'm confident in the density of your head, so I know these words will only spur further rationalization for your tender ego/perspective.

So what was it you wanted again...? Oh yeah, more Democrats and moderate Republicans to get elected. Check. Nice work.

Nonetheless, he was elected
We'l see if he's toast. It just might be crazy enough the bayou folk like his vote for reform so much they might re-elect him. That would be crazy.

Stab him in the back? He's a Republican, of course the Dems will support his opponent. Do you really need that explained to you?


No one likes an a-hole either, Z. You call Arlen Specter a "treasonous sellout" because he doesn't share your views. Case in point why conservatives are doomed to purgatory. You just roam around acting crazy (teabaggers), trying to find someone who will give you attention, trying to find a home since you're well on the way to destroying the Republican party.

Who said the Dem governors are 'moderate'?
The Messiah ran as a moderate. So did Clinton. They proved otherwise.

"How can you grow and learn and change if you always win and you're always right? Thats weakness. You can't rationalize that away."

Who says we always win? Clearly, we don't.

One additional congresscritter in the House won't make a difference. So yes, we got more truck from using the election to send a message to the Rep RINOs as well as any skittish Messiahcrats having to face re-election in not-so-friendly districts.

"Yes, the conservative hacks are sticking it to the RINO hacks... and Democrats get elected"

What PART of "If the winner is a liberal, he/she HAD BETTER be a Democrat" did you not conceptually grasp?

"you will have a very hard time electing the brand of extreme conservatives that you prefer. They will never win the Executive office, because the middle picks the winner in that national race, the middle will never go for the teabagger social-ist conservative"

That's patently untrue because the Dems got an extremely liberal President in office. The key is to use toned down language that moderates relate to. That's straight out of Saul Alinksy's book, btw.

The new Virginia Governor-Elect had a college thesis that was just left of the Old Testament but that didn't stop him from winning by close to 20 pts, did it? Why? Because he stuck on messages and themes moderates wanted to hear, that's why.

Moderates, by definition, aren't passionate about politics, remember. They gloss over the details they don't want to burden their mushy-washy minds with. The Dems are learned this very, very well. Bush knew it, too. Ditto with McCain.

Bush and McCain's ultimate problems were the same: You can't **** off your base, either.

At least Obama understands that.

"Oh yeah, more Democrats and moderate Republicans to get elected"

What moderate Reps? District 29's 'moderate' Rep got less than 5% of the vote. Wow! What a 'win' for RINOs.

The Dems themselves have declared him to be toast, dude
Stop trolling your propaganda. You're not fooling anyone.

"He's a Republican, of course the Dems will support his opponent. Do you really need that explained to you?"

Because he is Nazi Pelosi's cell ***** now, that's why. But he'll still get shanked.

"You call Arlen Specter a "treasonous sellout" because he doesn't share your views"

No, I called him a treasonous sellout because that is exactly what he is. Before, he was a Democrat who sold out to the Reps for re-electability. When it became painfully obvious that Toomey would clean his clock in the upcoming primaries, the did the same thing. Ideology or even 'views' has nothing to do with it. He's only in it for the power.

Which is why the Dem activists are all roiled up to challenge him in the Dem primary anyway. They hate him too.

"Case in point why conservatives are doomed to purgatory. You just roam around acting crazy (teabaggers), trying to find someone who will give you attention, trying to find a home since you're well on the way to destroying the Republican party."

So, how are the teabaggers acting any more crazy than the environmentalists and code pink freaks do? Answer: They don't. But clearly the activism works. We wouldn't be on the path of Goring ourselves with Crap & Tax otherwise.

The Republican Party is not being destroyed. The elections last week proves that. Instead, it is being renewed.

Why? He's just trolling a reaction out of us. That's all.
:)

Sculpture of the Week: Burning Man
http://news.yahoo.com/nphotos/Obama/photo//091111/ids_photos_wl/r1535946046.jpg/print;_ylt=An0eM6Pe9jFhtm8wTvADjAuaK8MA

"A sculpture by Chinese artist Liu Bolin titled "Burning Man Obama" is tested at a workshop in Beijing November 11, 2009. The sculpture represents U.S. President Barack Obama's impact on the world."

No one. Nobody said anything about Dem governors
Obama and Clinton are moderates. Of course you would disagree, I doubt you recognize any Dems as moderates. You hardly recognize any Republicans as moderates either. Thats just your ideological blindness - two teams, two sides, with us or against us.

"Who says we always win? Clearly, we don't."

Sure, its clear to me. You're the one spinning a Democrat victory over a conservative in a conservative District as a warning shot to moderates. Even when you lose you just spin it into what you want, rather than make an honest assessment of it. Its your weakness.

I'm all for **** Armey and conservatives paradropping their litmus-positive candidates into Districts all over the country.

"That's patently untrue because the Dems got an extremely liberal President in office. The key is to use toned down language that moderates relate to. That's straight out of Saul Alinksy's book, btw."

Toned down language is right, good job. But not even skilled rhetoric placates the seething teabaggers. They want to be pandered ad nauseum. We have yet to see any Republican use the right language to appeal to moderates.

"Moderates, by definition, aren't passionate about politics, remember. They gloss over the details they don't want to burden their mushy-washy minds with. The Dems are learned this very, very well. Bush knew it, too. Ditto with McCain."

True, moderates don't tend to be passionate about politics. Rather, they don't need their passion stirred by heated, divisive rhetoric to make their passion boil. Good citizens want details, they want dispassionate facts and multiple perspectives, regardless of being moderate or extreme. The largest bloc of the country is moderate, but good citizens in this regard are much more rare. People at the extremes don't matter, they're already sold to their chosen ideology (read: stupidity).

All politicians gloss over details, it is a way to appeal to moderates. Yes, Bush was good at it, he didn't know any details anyway. But McCain got tripped up by his lateral veering. He used to be a moderate, a maverick - you hated him for it. Then in the campaign, he veered HARD right, he had to to even have a chance to win the nomination. That was successful, but he failed to come back to the center for the general election, thats why he lost. He could've gone into center-left territory even, given that Palin had the idiot base in tight formation and ready to march.

"Bush and McCain's ultimate problems were the same: You can't **** off your base, either."

Huh? Bush didn't lose an election, he most certainly had the base wrapped up and fired up at election time. Fear is a good motivator. Losing the base wasn't McCain's biggest issue. He lost some base because of his old maverick ways, his pandering just wasn't enough for them to swallow the maverick, not even the Palin pill. But Palin got most of those kooks ready to swallow whatever she wanted, so its hard to say McCain alienated the base either. McCain had them wrapped up less than Bush, but it wasn't his ultimate problem. The base doesn't win the general election anyway.

"What moderate Reps? District 29's 'moderate' Rep got less than 5% of the vote. Wow! What a 'win' for RINOs."

You mean the moderate Rep that dropped out of the race a week before the election? Are you stupid or dumb? You can't pull that asininery on me. First, it was a win for Democrats. Second, it was a message to national conservatives they shouldn't stick their nose where it doesn't belong. It was a loss for Republicans any way you look at it, thanks to conservatives. And you clearly stated that is how you want it. Like I said, you always win (in your mind), even when you get beat.

No duh he'll get shanked, he has an R and not a D

"No, I called him a treasonous sellout because that is exactly what he is. Before, he was a Democrat who sold out to the Reps for re-electability. When it became painfully obvious that Toomey would clean his clock in the upcoming primaries, the did the same thing. Ideology or even 'views' has nothing to do with it. He's only in it for the power."

And who won the election between Toomey and Specter? So Specter wasn't extreme enough to please the kooky base, but he is a better representation of the populace, as evidenced by his re-election. Does that tell you anything? Please, you whine that he is in it for the power only because he doesn't share your views. If it were Toomey switching from D to R you would hail him as a hero.

The Dems should challenge him in the primary. I've lost faith in Specter too. He really is just in it for the power, even though we agree on many issues, its time for him to go. And even it it means Toomey gets elected. Toomey will last one term and get voted out for his extreme views.


Teabaggers are similar to whacky enviros and code pink freaks in how they act. They are all the most extreme, kooky lot of activists. Agreed.

"The Republican Party is not being destroyed. The elections last week proves that. Instead, it is being renewed."

You know what, I hope you are right. I hope we're able to push social conservatives to the sideline and renew the party with moderate views and economic conservatism. Its not how things are playing so far, but I hope it changes to that. Destruction is more prevalent right now than renewal.

You and I see he is spineless
but the masses won't. He'll have a good narrative to use come campaign time. It would have passed anyway, why not pander to politics to try and get re-elected. Obviously the bill wasn't distasteful enough for him to feel the need to vote on principle.

Besides, its the House, they are a model for low expectations.

Not just BobJones...
A whole bunch of democrats spread that lie that the seat had pretty much always been Republican (espeically Pelosi). When they don't have the facts to back them up, the libs just make them up!

-Bob

Forest and socialism
On the one hand you say we need another Republican, and that dems are completely wrong about capitalism. That doesn't even make sense because the Reps also don'e want captialism(if we mean its main component;free markets). Republicans also like big government manipulation of the economy, and work to increase it.

The government controls about 30% or so of the economy already, how much of it do you want them to control?

TCS Daily Archives