Free Dartmouth
 
  home  
  join
4/16/2003 11:54:00 PM | sam

More NRO Bashing

Former cokehead Larry Kudlow's latest is the same lame pro-tax cut article he always writes.

I am a big fan of Kudlow and his CNBC show, Kudlow & Cramer (although I liked its previous name "America Now" for is added drama). Something about Cramer's maniacal energy and Kudlow's combination of unbridled arrogance and oh-so-tasteful Paul Stuart suits made for very fresh, entertaining television.

That said, nobody spews more hot air on fiscal policy than Kudlow and his Club for Growth cronies. Reading his columns, I don't think he realizes that the stock market's perfomance between 1995-2000 was a bubble. In this installment, Larry is so crass as to debase patriotism further (if that's possible anymore) with lame comparisions to the "economic battleground."

Kudlow tries to argue that the post-bubble bear market is responsible for the lack of capital spending. Thus, cutting dividend taxes would make dividend-paying shares more attractive to investors, sending their stock prices up and restoring capital spending. This is flawed thinking. Share prices are a reflection, not the cause of the dearth in captial spending. The reluctance for firms to make capital expenditures is caused by the uncertainty in the current geopolitical environment, the new economic reality in terms of making their quarterly numbers, and the fact that something like half of capital spending is related to IT investments. Much as intel would like you to believe otherwise, the pentium 4 isn't going to let you do anything your pentium 3's can't.

If anything, we need a flat, stable stock market more than a bullish one. We need to reset the expectations that got so terribly out of line in the nineties. S&P 500 corporations cannot be expected to grow earnings fifteen percent a year sustainably. If anything, long term large cap growth should track productivity gains, which are in the low single digits.

If the Bush administration wanted to cut dividend tax cuts, they should have at least done it the right way: on the corporate side, where the money would go directly into free cash flow where it could be used for capital spending. And the likes of Ron Perelman wouldn't get a multi-million dollar handout.



Links to this post:

Create a Link

0 Comments:

Post a Comment

Dartmouth
The Free Press

Alums for Social Change
The Green Magazine
The Dartmouth
Dartmouth Observer
Dartmouth Review
Dartlog
Inner Office
The Little Green Blog
Welton Chang's Blog
Vox in Sox
MN Publius (Matthew Martin)
Netblitz
Dartmouth Official News

Other Blogs
Ampersand

Atrios
Arts & Letters
Altercation
Body and Soul
Blog For America
Brad DeLong
Brad Plumer
CalPundit
Campus Nonsense
Clarksphere
Crooked Timber
Cursor
Daily Kos
Dean Nation
Dan Drezner
The Front Line
Instapundit
Interesting Times
Is That Legal?
Talking Points Memo
Lady-Likely
Lawrence Lessig
Lean Left
Left2Right
Legal Theory
Matthew Yglesias
Ms. Musings
MWO
Nathan Newman
New Republic's &c.
Not Geniuses
Ornicus
Oxblog
Pandagon
Political State Report
Political Theory Daily Review
Queer Day
Roger Ailes
SCOTUS blog
Talk Left
TAPPED
Tacitus
This Modern World
Tough Democrat
Untelevised
Volokh Conspiracy
Washington Note
X. & Overboard

Magazines, Newspapers and Journals
Boston Globe Ideas
Boston Review
Chronicle of Higher Education
Common Dreams
Dissent
In These Times
Mother Jones
New York Review of Books
New York Times
Salon
Slate
The American Prospect
The Nation
The New Republic
The Progressive
Tikkun
Tom Paine
Village Voice
Washington Monthly

Capitol Hill Media
ABC's The Note
American Journalism Review
Columbia Journalism Review
CQ
Daily Howler
Donkey Rising
The Hill
Medianews
National Journal
NJ Hotline
NJ Wake-up call
NJ Early Bird
NJ Weekly
Political Wire
Roll Call
Spinsanity

Search
Search the DFP

www.blogwise.com
Powered by Blogger

The opinions expressed here are not necessarily those of Dartmouth College or the Dartmouth Free Press.