We've got some breaking news: Former President Donald Trump will speak at the Economic Club of New York luncheon on Thursday and that's the subject of "The Riff."
Former President Donald Trump will deliver a major speech on the economy this Thursday before a lunch meeting of the Economic Club of New York. Expect Mr. Trump to lay out his plans to rejuvenate the economy by reducing tax rates and rolling back onerous and costly red tape regulations. Of course, "drill, baby, drill" to reopen the fossil fuel spigots and pipelines and leasing and LNG terminals, along with his approach to protecting American economic interests from unfair trading practices. Call it the Trump Reciprocal Trade Act.
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Look for his speech to emphasize and expand on the urgent need for more rapid supply-driven economic growth for middle America, young people, and minorities to help them climb the ladder of success. But new tax and regulatory incentives will also facilitate the production of more goods in order to bring down prices and provide an escape hatch for Americans trapped in the Biden-Harris affordability crisis. Of course, don’t forget the need to protect King Dollar as the world’s reserve currency, something Mr. Trump always comes back to.
For a preview of Thursday's speech, here's what Mr. Trump said in Johnstown, Pennsylvania last Friday:
DONALD TRUMP: "We will unleash safety, prosperity and peace for America of every race, religion, color and creed. Together we will deliver low taxes, low regulations, low energy costs, low interest rates, low inflation - so that everyone can afford groceries, a car and a home."
Here's one way to think about this: By removing all the Biden-Harris tax and regulatory obstacles to fossil fuel production, more oil put on the market will of course reduce the price of oil. Instead of $80 a barrel, oil prices could ease to something like $40 a barrel as the U.S. industry produces 15 or 16 million barrels per day instead of the 13 million that was first reached in 2019.
The impact of petroleum costs permeates virtually every nook and cranny of consumer goods and essentials throughout the economy. Prices everywhere will tumble. Keeping business individual and investment tax rates low -- an investment boom for the private sector -- would lead to the capital deepening of all matters of business equipment and technologies.
Real wages, which have fallen nearly 4% or $2,000 during the Biden-Harris years, would soar as they did during the Trump years, when they rose by 9% or roughly $6,000 for the typical working family. Again, the principle is that more goods will reduce prices in the healthiest possible way.
We will be talking more about all of this in the days ahead. But expect Mr. Trump to sharply criticize Kamala Harris' plan for price and rent controls, and her extravagant spending on housing that would jack up home prices even more, or her myriad welfare-related policies that essentially pay people not to work and would cost another $2 trillion. That would break the budget even more than it has already been broken.
Ms. Harris cast the deciding vote for the original sin, the $1.9 trillion spending plan in 2021, and the $1.2 trillion misnamed Inflation Reduction Act in 2022.
On top of all that, the Harris economic plan would throw a wet blanket over the entire economy, with a $5 trillion tax increase that would make the U.S. uncompetitive globally and cause a rush of capital and businesses to friendlier foreign shores.
She would raise the marginal tax rate on dividends and capital gains to 44.6% from the current 23.8%. So, the combined tax on business investors would rise to a rate of 60%. She proposes a wealth tax on unrealized capital gains that would destroy family farms and small businesses and estate taxes would rise as high as 81%.
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She may or may not be for a ban on fracking, but it doesn't really matter because Biden-Harris regulation and litigation on fossil fuels is as good as a fracking ban. Recall that Ms. Harris was a cheerleader for Bidenomics, which has led to a cumulative price rise of about 20% over their term, with groceries up 22%, gas up 50%, electricity 32%, and staples like eggs and sugar up 40%. Peanut butter costs 49% more, bread up 46%, and car insurance and repair costs soared 47%.
Meanwhile, as the New York Sun has pointed out, even though the year-over-year price index has eased from 9.1% in the middle of 2022 to 2.5% recently. That's still 25% higher than the Fed's 2% target. And think of this: If you had $100 worth of savings, and prices rose 2% every year for 20 years, that $100 would be worth only $55.70
This is why neither the Fed or the Biden-Harris administration should even think about declaring victory on inflation. More importantly, Mr. Trump's plan to promote supply-side growth and budget restraint -- coupled with low oil prices -- will actually bring prices down, which is what blue-collar, hard-hat Americans yearn for to make ends meet around their kitchen tables. So, dial up the New York Economic Club on Thursday to hear Donald Trump's plan to save America.
This article is adapted from Larry Kudlow’s opening commentary on the Sept. 3, 2024, edition of "Kudlow."
