Real Clear Politics ^ | June 2, 2012 | Larry Kudlow
The Keynesian government-spending model has proven a complete failure. It's the Obama model. And it has produced such an anemic recovery that, frankly, at 2 percent growth, we're back on the front end of a potential recession. If anything goes wrong -- like another blow-up in Europe -- there's no safety margin to stop a new recession.
And that brings us to the grim May employment report, which generated only 69,000 nonfarm payrolls. It's the third consecutive subpar tally, replete with downward revisions for the two prior months. It's a devastating number for the American economy and a catastrophic number for Obama's re-election hopes. All momentum on jobs and the economy has evaporated.
Barack Obama doesn't get this, but businesses create jobs. And firms have to be profitable in order to hire. Yet the president is on the campaign trail criticizing Mitt Romney by degrading the importance of profits. Huh?
Without profits, businesses can't expand. And if they don't expand, they can't hire. And if they don't have profitable rates of return, they're not going to attract new capital for investment.
....
In fact, all the countries around the world should move to the supply side with lower tax rates to spur economic-growth incentives. Europe, China and Latin America ought to go back and read Ronald Reagan's speeches and examine his actions when he faced a similar crisis 30 years ago. It would be an hour or two well spent.
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