Prosperity Is Not Enough

PART I

The Case for American Prosperity

Now, look, the key to American prosperity is not socialism. It’s not communism. It’s not some bizarre big government statist combination that generates weird, un-American values. Those folks are dead wrong.

Right now the economy is booming. More people are working than ever before. Working, investing, producing. We are the envy of the world. 

We don’t need to emulate the Chinese Communist Party or the old Soviet Union, or North Korea, or Iran or any of the other places that these Democratic socialist crazies are in bed with.

Take today’s job report — private sector payrolls were up, and government payrolls were down. In a sense that’s all you need to know.

Actually, since Donald Trump became president, private sector jobs have exploded upwards by 877,000. While federal jobs have fallen by 327,000. It is a reordering of the economy from President Biden’s socialism to Mr. Trump’s free enterprise. 

Even more important, for the first time in many years, manufacturing is booming. 

Not only were the Institute for Supply Managers’ surveys up for the seventh straight month, but July marks the fifth straight month of goods-producing job growth. 

As Treasury Secretary Scott Bessent has written, by creating 105,000 jobs so far this year, goods-producing employment has had the best seven-month start since 2023. 

On top of that, productivity growth has more than doubled the expected rate, and is now 2.2 percent above a year ago. 

As a result, cost push inflation is negligible, unit labor costs are rising only 1.2 percent, and that allows profits to be growing by an extraordinary 25 percent year on year. 

So today, the broad based S&P 500 index hit a new record high.

The Atlanta Federal Reserve is now predicting near 6 percent economic growth in the third quarter. Productivity growth is surging at more than 2 percent. 

Goods producing jobs like manufacturing and construction are up 105,000 so far this year. The stock market is roaring. There’s more than 160 million Americans at work that shows you we are as strong as we have ever been.

The unemployment rate is at a historically low 4.1 percent. Employee wages are rising across the income distribution. Noteworthy is that the lower earnings percentiles are rising faster than the top earners.

Median weekly wages up 4.6 percent, while the bottom quartile is up 5.5 percent. This shows we don’t need socialist government regulators to redistribute income. 

Instead as Mr. Trump cut taxes across the board last year in the One, Big, Beautiful Bill, the labor force has responded to the age-old incentive that when you tax something less, like work, you get more of it. 

Or simply, when you let people keep more of what they earn, they respond with hard work. The big government socialism of the Biden years produced a 21 percent inflation increase, as it tried to centrally plan the economy. 

Yet their high taxes and enormous government spending, completely back-fired. And that’s why when these new even further extreme socialists talk about affordability in a state-run economy, they have no credibility at all. 

They were proven badly wrong during the Biden years, but the whole issue of a socialist planned economy has been proven badly wrong every place it has ever been tried. 

No doubt, the Republicans would do themselves a favor if they adopted a new budget of pro-growth tax cuts and spending restraint to end the Biden-esque waste fraud and corruption. 

The GOP promised to drain the swamp and add some powerful supply-side stimulus. Politically, that’s their missing link right now. 

Yet to think that some Democratic Party socialism or even communism, is gonna replace the prosperity from free market enterprise, is pure folly. 

PART II

The Political Battle Republicans Could Still Lose

Now look, it may wind up being a huge gift to the GOP come November. But the far-left socialist, antisemitic, anti-American Democrats had a field day yesterday in carrying these Michigan primaries.

Of course, the leader is this Dr. Abdul El-Sayed, who won his Senate race by a cat’s whisker, but he won it. He didn’t get any black votes, I don’t think. He didn’t get any brown votes. 

He didn’t get any working-class votes. Yet he beat a regular Democrat who was backed by Senator Chuck Schumer and Governor Gretchen Whitmer.

So the El-Sayed Democrats, they’re really no different than the Mamdani Democrats or the Bernie Sanders Democrats or the AOC Democrats. 

It is interesting politically how fast the socialists have taken over in the last couple of years. And the issues are very familiar and very bad for America. 

It’s big government socialism. It’s this Medicare for all, which is really a euphemism, not simply for government control of healthcare, but frankly for government control of the entire economy. 

Hence the flirtation, not just with socialism, but really with communism.

To be sure, it means vast tax increases, the destruction and liquidation of wealth. The destruction of success, the end to individual initiative, the end-to-work incentives, open borders, anti-cops, anti-ICE. 

This crowd, by the way, would raise taxes beyond your wildest dreams. They have no family values. There’s no community, there’s no tradition. 

Some of them want to abolish the Thanksgiving Day holiday. All they can talk about is transgenderism, and then there’s Palestine.

Oh, Palestine. Antisemitism is perhaps the driving animating force behind this entire socialist movement. 

The biggest issue in the Michigan Senate race seems to be the hatred of Israel, which levers off the anti-semitism of Mayor Zohran Mamdani of New York, and it is catching on with all the socialists.

Our friend Ben Domenech now calls the Democrats the party of Commie ISIS. Well put. 

Now, on the other hand, this is a great Republican opportunity if the GOP can seize it. The problem here is we’re in a booming economy. 

All cylinders, manufacturing, technology, consumers, businesses, a roaring stock market today, another record. Trump Accounts are the most popular thing going, but no one seems to know it according to the best polls.

I’m talking about likely voters here, from ace Republican pollster, John McLaughlin, among the best in the business, not registered, not adults, actual likely voters who participated in the last elections. 

For the McLaughin poll he asked, is the economy worse or better? Are you listening? Some 56 percent say worse, 37 percent say better.

And then he goes on. Are the Trump tax cuts of last year good enough to improve the economy? Only 26 percent said yes. Boy, that sounds like a messaging problem, but you know what, it’s a policy problem too.

Today, in the paper, an old Reagan hand, my pal, Bruce Thompson — and this was copied by the Committee to Unleash Prosperity Hotline — he notes that Americans pay more in taxes than they spend on food.

Clothing and housing, that’s right. As of last year, Americans paid $8.192 trillion in federal, state, and local taxes, and spent $7.388 trillion on food, clothes and housing.

All right, that is not affordability. And I think that’s got people down. They should be up, but they’re not. 

Yet, the Republican Congress… Has completely bungled the budget. There’s just a couple of days left. No pro-growth tax cuts, no strong communication of the economic successes and the boom, no reform of the spending cuts.

To help solve the affordability issue, people want more money in their pockets. It’s an old Republican theme and for some reason Republicans in Congress and the White House have forgotten it

Today, I just saw the vice president talked about $56 billion of waste fraud. Why isn’t that in the budget? Times 10 years, that would be $560 billion of spending cuts from waste, fraud and corruption. 

Why isn’t that in the budget? Anyway, if the GOP doesn’t wake up, if the GOP doesn’t start to develop some policies, and if the GOP doesn’t start to develop some significant messaging, then they may bungle not just the midterm election, but they may bungle the whole battle with this Democratic Socialism. 

And I can’t think of anything worse for America.

Lawrence Kudlow is a Fox News Media contributor and host of both “Kudlow” on weekdays and the nationally syndicated “Larry Kudlow Show” each Saturday. This column is adapted from his monologues on “Kudlow.”

Congratulations to Dr. S.P. Kothari

S.P. Kothari was confirmed by the Senate on Friday as Assistant Secretary of the Treasury for Economic Policy. He comes to the role after a distinguished career that includes serving as Deputy Dean of the MIT Sloan School of Management and as Chief Economist at the Securities and Exchange Commission during President Trump's first term. In 2020 he received the Padma Shri, a national civilian honor conferred by the President of India.

On a personal note, S.P. and I attended BITS Pilani together, Class of 1979, and have been close friends since we were 16.

Heartfelt congratulations to S.P., and every success in the new role.

Raghavan Mayur
Publisher, TIPP Insights