Lawrence Kudlow is probably my favorite celebrity economists, possibly because of his realistic optimism. He comes to us now with a piece titled As Critics Sneer, Trump Is Maneuvering to Unmuzzle Economy.
President Obama made lofty projections of economic growth. But the real rate was anemic during his whole eight years. Here's Kudlow:
And what’s really interesting is that the Obama policy didn’t include a single economic-growth incentive. Not one. Instead, there was a massive $850 billion so-called spending stimulus (Whatever became of those spending multipliers?), a bunch of public-works programs that never got off the ground, and finally Obamacare, which really was one giant tax increase.
He cites Stanford University economics professor John Taylor:
In his widely read blog, Economics One, Taylor writes, “Take off the muzzle and the economy will roar.” He notes that bad economic policy leads to slumping productivity, living standards, real wages, and growth.
“Huge swings in productivity growth in recent years,” Taylor writes, “are closely related to shifts in economic policy, and economic theory indicates that the relationship is causal.”
He concludes, “To turn the economy around we need to take the muzzle off, and that means regulatory reform, tax reform, budget reform, and monetary reform.”
That's Trump's blueprint. No wonder Janet Yellen is talking up interest rate hikes.
Aside: During his administration President Obama made bold predictions about the economy as if that's what he wanted. But his policies actually worked to hinder it. Why? That's the mystery.
12:56 PM 2/25/2017