LAWRENCE KUDLOW SPEAKS AT FAIRFIELD COUNTY BANK’S ANNUAL CUSTOMER RECEPTION
Wilton, CT – November 16, 2015: “I love this country. It is still a beacon of light. We have not had our best years recently, but we will have them again,” stated Lawrence Kudlow, CNBC’s Senior Contributor, after being introduced by Paul McNamara, Fairfield County Bank’s Chairman of the Board. Mr. Kudlow addressed nearly 400 Fairfield County Bank, Fairfield County Financial Services, and Fairfield County Insurance Services customers, Board of Director Members, and employees on the economy, the stock market, and politics at Rolling Hills Country Club in Wilton, CT.
Kudlow described himself as; a “free market guy,” a “growth guy,” a “Reagan guy.” He expressed that “growth solves a lot of problems” and said that, “the people in our country are cranky because there are not enough jobs, there is not enough income, and there is not enough optimism.” He went on to explain that the United States has seen extremely slow growth at 2% and that the ‘80s and ‘90s were years of prosperity. Now what we need is new leadership to build an economy that is “strong at home.” This stems from Mr. Kudlow’s belief in President Ronald Reagan’s paradigm that if we are “weak at home that we will be weak abroad” and conversely if we are “strong at home we will be strong abroad.” Mr. Kudlow believes that the economy is “not all bad and it’s not all good.” We are not in a recession, but we are not booming either – just absence of growth. He does not believe the Federal Reserve should raise interest rates every month or quarter because of such indicators as falling oil prices (which he believes will continue to fall due to fracking), commodities, gold, a strong dollar and the Consumer Price Index (CPI) staying flat. He hopes that the Federal Reserve goes very slow when it comes to hiking interest rates in this delicate economy.
Mr. Kudlow further went on to state that “business is not great” except for in states that are more hospitable – less taxes and less regulations. Business investment has not moved in twenty years because no one wants to make a long-term commitment. Profits are being taxed and businesses cannot be successful that way. Lawrence believes that the economy’s biggest obstacle is the corporate tax. He called for remedies that include slashing the corporate tax rate from 40% to 15%. “Re-patriation will pay for itself in five to six years, and this will bring capital back to the U.S.” Small businesses should have access to a lower tax rate. The business code is stifling and one of the reasons that we are not competitive. Regulations need clean-up, and we cannot make it so difficult to do business here. These changes would also benefit middle class wage earners, as well. “I would rather put money in people’s pockets and encourage them to spend and invest it.” Slashing corporate taxes will stimulate growth, and interest rates will rise naturally. “We know what to do; we just need to do it.”
With respect to Connecticut, Kudlow described the state as “inhospitable to live and work.” Nationwide, we rank close to last in corporate tax (45/50,) property tax (49/50,) headquarters tax (49/50,) and R&D Installations (48/50.) The 2011 tax hike crushed the state, and now our recovery is worse than the national recovery. Government union workers earn on average 30% more than those in the private sector and the taxpayers are funding their pensions. “”If GE gets a break, everyone should get a break.”
Commenting on the Affordable Care Act, Kudlow said it had negative repercussions on our economy, and it stifled job creation. He said that both Medicare and the Veterans’ Administration are a calamity. With respect to Social Security, Kudlow said that it is broken and it is a very complicated problem. He said that if the economy grows at 3.5% per year we would have enough to fund Social Security but he also suggested giving young people an “opt-in or out” choice, and raising the retirement age could be viable options.
The news was not all bad nor all good, but like any situation that needs to be improved, hope, belief, and optimism are important factors in affecting the changes the will move our economy, and our country forward.