Lawrence Kudlow explains in a Real Clear Politics column why Steve Bannon’s political demise means good news economically.
Mr. Bannon’s peculiar notions of populism were essentially anti-growth. He believed higher taxes, ultra-protectionism, and a cheap dollar would help the middle class. Supply-siders know these policies only damage the economy, with the middle and lower classes suffering the most.
Although Mr. Bannon was pushed out of the White House months ago, he apparently still had the president’s ear. So his influence has continued to worry investors and business. Mr. Bannon went belly-up politically this week, and the stock market soared. Some are calling it the Bannon-is-gone rally.
This is an oversimplification. There are many positives driving shares higher, including the Trump tax cuts and the expected rise of business profits, the mother’s milk of stocks. Mr. Bannon, though, was never a strong advocate of the Trump tax-cut plan. Instead, he wanted to raise income taxes for successful earners, to 44% from 40%.
Steve Moore, Art Laffer, and I had numerous conversations with Mr. Bannon, trying to talk him out of this. President Trump, we argued, would end President Obama’s wars on success and business with policies that generate faster economic growth.
How does punishing upper-income people help spur investment or job creation? How does hurting the so-called rich help the middle class? Those are Democrat arguments, and failing ones at that.
A rising tide lifts all boats. JFK, Jack Kemp, and Ronald Reagan believed it. So does Donald Trump.
