Larry Kudlow and Stephen Moore are Trump’s economic advisers. They have a simple solution to all problems, reduce regulation and taxes, especially on the rich and corporations and growth will magically take off.
In a new twist, Kudlow argues.
- Wages are stagnating because companies don’t invest
- Companies don’t invest because taxes (and regulation) are too high, that reduces the quality and quantity of the capital stock and hence productivity and wages.
It is sort of funny when corporate profits and cash holdings are at record highs and interest rates are at record lows to argue that companies have no funds to invest and that we would get much, if any, mileage out of reducing corporate taxes.