GE's Jack Welch Blasts Obama's Leadership

President Obama’s “divide-and-conquer” approach isn’t what great leaders do, Jack Welch said Thursday on “The Kudlow Report”.

The renowned former General Electric CEO chided the president for blaming others for economic woes.

“It was the insurance executives in health care. It was the bankers in the collapse. It was the oil companies as oil prices go up. It was Congress if things didn’t go the way he wanted. And recently it’s been the Supreme Court,” he said.

“He’s got an enemies list that would make Richard Nixon proud.”

Welch, who helmed GE for 21 years and founded the Jack Welch Management Institute at Strayer University, penned an op-ed article for Reuters with wife Suzy Welch this week in which he tackled the idea of Obama’s enemies list.

“Surely his supporters must think this particular tactic is effective, but there can be no denying that the country is more polarized than when Obama took office,” Welch wrote, making a case for presumptive Republican presidential nominee Mitt Romney.

“Without doubt, Romney is not the model leader (his apparent lack of authenticity can be jarring), but he has a quality that would serve him well as president — good old American pragmatism,” he wrote. “Perhaps that’s the businessman in him. Or perhaps you just learn to do what you’ve got to do when you’re a GOP governor in the People’s Republic of Massachusetts or the man charged with salvaging the scandal-ridden Salt Lake City Olympics. If Romney’s long record suggests anything, it’s that he knows how to manage people and organizations to get things accomplished without a lot of internecine warfare.”

In 1981, Welch became GE’s youngest CEO, and increased its market value by $387 billion, making it the world’s most valuable company. But the move came in part by slashing GE’s workforce by more than 100,000 workers, earning him the nickname he despised, “Neutron Jack,” a reference to the bomb designed to eliminate people while leaving buildings intact.

Welch argued that “great leaders are interested in coalescing” the way they would run a company.

“You don’t have one division pinned against the other,” he said. “You try to get the whole company pull together.”

I asked him whether he thought Romney could win the White House. “Absolutely,” he said. “It’d be great for the country. We’d be a stronger country. We’d have more jobs. We’d have more people getting a piece of the pie. And we wouldn’t have this divisive nature that we have with this president, screaming at one group and then screaming at the next group in a high-pitched voice.

“He was in Florida this week screaming and yelling about rich people. He went after the Supreme Court. We’ve got to stop this, Larry.”

Earlier in the interview, Welch said he was seeing modest growth in short-cycle sectors such as food and chemicals, along with “real strength” in non-residential construction and infrastructure.

“While the economy was strong, it wasn’t accelerating the way I thought it would after the fourth quarter,” he said.

Tailwinds included consumer confidence and the Federal Reserve.

“On the negative side, though, we’ve got gasoline prices, we’ve got Europe, we don’t know where China is going and we’ve got tax increases right around the corner,” he said.

A King Dollar Tax Cut

You wouldn’t know it from falling stocks, but the Fed’s apparent decision to hold off on future bond buying, or QE3, in response to an improving economy may turn out to be a very bullish omen for the equity market and the economy.

In fact, less stimulus from the central bank sets up a potential tax-cut effect. Here’s why: Limits to the Fed’s $3 trillion balance sheet will bolster the value of the dollar.

The beleaguered greenback has fallen roughly 40 percent over the past ten years as a result of the Fed’s interventionist go-stop-go policies. Since the banking crisis of 2008, the dollar has dropped 8 percent.

But as the Fed ended QE2 last year, and as its bond-buying “operation twist” comes to an end in June, the dollar has started rising. In response, gold prices have been falling significantly. Slower money creation will do that.

And along with gold, oil prices are now slipping lower, with West Texas crude approaching $101. Still too high, but much less scary. Wholesale unleaded gas prices also could fall in response to the drop in crude, which might take the pressure off retail gas at the pump. If that’s the case, and the King Dollar scenario plays out, the recent energy-price shock could reverse, imparting a mild tax-cut effect on consumers and businesses.

Although Bernanke & Co. do not target the dollar, a stronger greenback is the surest way to bring down energy and food prices, which all too often have plagued households and the economy.

The Joint Economic Committee has estimated that the cheap dollar has contributed about 45 cents to the rising gas price. Lately, with the drop in crude oil, nationwide gas prices could be starting to level off at just over $3.90 -- even though refiner closings and bottlenecks in some parts of the country have pushed that price much higher.

No, a stronger dollar won’t offset the failure to implement the Keystone Pipeline. But it could provide some motorist relief at the pump.

The point is, if the Fed quits printing new money, the value of dollar money will go up. And the inflation tax will go down. Despite Ben Bernanke’s economic worries, the Fed is beginning to see that the economy is at least growing by roughly 3 percent. That’s not fabulous, but it’s not bad either.

The latest ISM surveys for manufacturing and services, the decent 209,000 ADP employment report for March, and pretty good car sales all suggest that the first-quarter economy was just as good as the fourth-quarter economy. And these economic stats are moving the Fed away from more easing moves. Hence, King Dollar is recovering at least a bit.

The dollar view on the economy and stocks is a minority case, but a very important one that should not be overlooked. During prior stock market booms, particularly in Reagan’s first term and Clinton’s second term, King Dollar rose and gold fell, oil prices came down, and foreign capital sought out dollar investments in the U.S. because of the reliability of the currency.

For investors, a strong dollar helps.

Romney's in a Sweet Spot if . . .

If the Supreme Court overthrows the individual mandate, doesn’t Mitt Romney say “I told you so” and emerge as the big political winner?

All along he’s been arguing that only states have mandate power, and that the federal government under the commerce clause, or any other law, is guilty of massive regulatory overreach with Obamacare.

While fending off criticism from Rick Santorum and others about the Massachusetts mandate, Romney has always said it was a state issue, not a federal one. And if the Supreme Court agrees, it would have to give the former governor a leg up in credibility with Republicans and the general public.

President Obama, meanwhile, would emerge as a big political loser. Obamacare was the central signature domestic economic plan for his administration. What else does he have to show for nearly three and a half years in office? An $800 billion stimulus plan that didn’t work? A tax on rich people? An assault on oil and gas companies?

Besides Obamacare, what can the president really point to as an accomplishment?

The other big winners in the event the mandate is overturned are business and the economy. Talk to almost any CEO and they’ll tell you that the tax-, regulatory-, and insurance-cost threats from Obamacare have stopped them from hiring. Or, if they have made new hires recently, they’ve gone a lot slower than would have been the case without Obamacare. Remember how many companies asked for Obamacare waivers this past year. That shows their distaste for the legislation.

Of course, there’s still the huge tax cliff coming early next year, when virtually the entire tax code is upended. But Obamacare, with all its tentacles, has been a huge growth impediment. The Supreme Court could remove that jobs barrier, not to speak of the potential fiscal bankruptcy suffered from the gigantic costs of new Obamacare entitlements.

Mitt Romney’s job in a post-Obamacare world is to show voters what his alternative would be. In a recent op-ed in USA Today, he begins to set this out: tax benefits for individuals purchasing insurance outside their workplace; more competition and consumer choice for insurance plans; medical-malpractice reform; interstate insurance options; and state-determined insurance protection for those with preexisting illnesses. All this is a good start. Rather than a government-run health-care reform, Romney is pushing a market-run reform, which has long been a Republican idea.

So we’ll see in a couple of months how the Supremes decide the Obamacare case. But Romney, the likely GOP nominee, is well positioned to take advantage of a scenario where the Obamacare federal takeover is rejected.

Ryan's Supply-Side 2012 Budget

There are a lot of really good things in Paul Ryan’s new budget, which is a stark contrast to the Obama budget. Ryan cuts spending by over $5 trillion, lowers the deficit by over $3 trillion, and brings the debt-to-GDP ratio down to 62 percent. All of these are ten-year totals.

Ryan also cuts back on small entitlements, block-granting them to the states. Then, of course, there’s the new and improved Medicare-reform plan.

But what I really like about this year’s Ryan budget is his singular emphasis on pro-growth, supply-side tax reform.

Working with Dave Camp, Ryan has laid out a great blueprint for Mitt Romney and the whole Republican party. In particular, while listening to the budget meister at a small luncheon for conservative journalists and think-tankers in Washington on Monday, what I heard again and again was an emphasis on economic growth.

This is not to say Ryan is not worried about spending, deficits, and debt, which of course he is. But his reform message to limit government really spends a lot of time on tax simplification, ending cronyist carve-outs and loopholes, and of course dropping the personal and corporate rates.

Growth solves a lot of problems. All those GDP ratios for spending, deficits, and debt look a lot better when the GDP denominator is rising rapidly. Not through inflation, but through new incentives to promote real growth.

Unfortunately, the first cut of the Ryan budget is based on CBO static estimates of growth and revenues. That is a budget-committee obligation. But I’m told that on Thursday we will get a different set of numbers based on dynamic scoring of lower tax-rate incentives. I’m guessing the growth difference is 3 percent static and 4 percent dynamic. Dropping tax rates as much as Ryan does, which reminds me of Reagan-era tax reform, could probably produce even more growth. Therefore, the budget could be balanced in a much shorter period of time with much lower debt ratios.

Let’s see what the second set of numbers brings.

One-on-One with Mitt Romney (Part I)

In my interview with Mitt Romney yesterday he stayed on message for growth, jobs, less debt, and smaller government. He reaffirmed that “he won’t set his hair on fire”, meaning no splashy off message statements to distract from his fundamental economic push. He acknowledged that the primaries have made him a much tougher, better candidate and more prepared to carry the fight to Obama.

He emphasized his 20 percent supply-side reduction in income tax rates. And interestingly, in response to my question, he said he would take a look at indexing the capital gains tax for inflation. That’s a pro-growth idea supply-siders have pushed for many years. I hope he finally adopts it.

One-on-One with Mitt Romney (Part 2)

A Good Man

Sincere condolences to the Breitbart family on the terrible passing of Andrew. He was a smart, innovative, path-breaking media leader. And a good man. His appearances on our show always sizzled. He broke so many important stories. At 43, he passed way too soon. A tragedy. May he rest in peace. God bless.

Mitt Gets the Supply-Side Approach

When former President George W. Bush cut taxes, including his 2003 reduction in tax rates on investment, he always referred to it as putting more money in people’s pockets. I don’t want to be unfair, because the 2003 tax cuts were his best policy move. But Bush was never a supply-sider. Putting more money in people’s pockets is a demand-side argument.

Contrast that with Mitt Romney’s tax-policy speech today at the Detroit Economic Club, where he touted his new across-the board 20 percent reduction in personal tax rates. The language is crucial: “By reducing the tax on the next dollar of income earned by all taxpayers, we will encourage hard work, risk-taking, and productivity by allowing Americans to keep more of what they earn.”

This is supply-side language. It is incentive language.

Many of us have been asking whether Romney understands the incentive model of growth. Namely, keeping more of what you earn, invest, or risk provides a bigger reward. And those rewards translate into a fresh tonic for economic growth.

Ronald Reagan understood this when he famously told people that he quit working as an actor because he only made about 10 cents on the extra dollar earned from the extra movie. Mitt Romney seems to understand this incentive model.

His tax-cut plan is not perfect. Instead of retaining all six brackets of the personal income tax, I wish there were only two brackets or maybe three for a modified flat tax. But it’s clear that Romney understands the incentive value of his 20 percent marginal rate cut. He is satisfactorily answering the question that I and others have posed about his understanding of the supply model.

Reward more and you’ll get more. It’s not just a one-time benefit of more cash. New tax incentives at the margin change economic behavior for the better.

I will have more to say on the Romney plan overall, and about how it contrasts hugely with Obama’s massive tax-rate hikes. But for now I am satisfied that Mitt gets the supply-side approach.

Kudlow on MSNBC's "Morning Joe"

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A Bolder Romney Tax-Cut Plan Is Coming

Team Romney tells me there will be a bolder tax-cut plan released either at the debate tomorrow night (if Mitt gets it in) or more formally at his Detroit Economic Club speech on Friday. I’m embargoed from releasing details until tomorrow. But I can say that the new plan will be across-the-board with supply-side incentives from rate reduction, and that it will help small-business owners as well as everyone else.

Dave Camp Spanks Tim Geithner

Michigan Republican Dave Camp, the chairman of the powerful tax-writing Ways and Means Committee, gave Treasury man Timothy Geithner a tough spanking yesterday. In a hearing on the president’s budget, Camp stated that nearly $2 trillion in tax increases will take more money away from employers, investors, and savers, and would push the top rates close to 45 percent. Camp noted that the bottom half of earners pay no federal income taxes, and that 70 percent of income taxes are paid by the top 10 percent, a group which includes the small businesses that are so important to job creation.

Why should Uncle Sam take nearly half of their income?

Camp then honed in on the Obama proposal to triple the tax on dividends from 15 percent to nearly 45 percent. The chairman went on the say, “Because dividends are paid out of income that has already been taxed at the corporate level and then are taxed again in the shareholder’s hands, this proposal would push the total federal tax rate on dividends to 64 percent.” (Italics mine.)

Camp next hammered Geithner on corporate tax reform. As in, “Where is your plan?” As in, “The U.S. will have the highest corporate tax rate in the industrial world.” Camp asked Geithner why the U.S. is at a competitive disadvantage in the world marketplace. (I would note that while the U.S. corporate rate is 39 percent, Canada’s combined federal-provincial corporate tax is 25 percent.) Camp could have added that Team Obama is going to have a corporate tax plan, and that it will raise $350 billion, including $150 billion for something called a “global minimum tax,” a new tax that has nothing to do with tax reform.

Finally, Camp hit Geithner on the debt problem, stating that our total debt load is now 102 percent of GDP -- certainly a warning point for future economic growth.

I’m glad Dave Camp is on the warpath. One thought: He should report his bold corporate-tax-reform plan out of committee and onto the floor, where the GOP House can then pass an exemplary pro-growth, corporate-tax reform to turn up the heat on the White House and the Democratic Senate.

Obama's Class-Warfare, Tax-the-Rich Budget

If you shake out the Obama budget in terms of bold headlines, it’s really a class-warfare, tax-the-rich budget. Layer upon layer of tax hikes are piled on successful investors, small-business owners, and corporations.

The capital-gains tax goes from 15 percent to 24 percent (including Obamacare). The dividends tax goes from 15 percent to nearly 40 percent, and that’s not including the double tax on corporate profits embodied in dividends and capital gains. The Bush tax cuts for top earners are repealed. There’s the 30 percent Buffett-rule minimum tax on millionaires. The carried-interest tax for private equity, hedge funds, and other investment partnerships goes from 15 to 39.6 percent. The estate tax jumps to 45 percent. Oil and gas companies get hit. And there’s probably more stuff in there I haven’t read yet. (Jimmy P. lays it out nicely.) Paul Ryan’s press release calls it $1.9 trillion tax hike, with $47 trillion in government spending over the next decade and the fourth straight year of trillion-dollar deficits.

Some kind of corporate tax reform may be released in a few weeks. But we don’t know much about it. And while it may lower the top rate, it’s going to penalize U.S. firms operating abroad. Just what business does not want.

Former Bush economist Keith Hennessey estimates that new proposals would create a ratio of 1.2 dollars of tax increases for every dollar cut in spending. Most of the spending cuts would slam Medicare doctors and other health providers. Unlikely to happen. And there is no overall entitlement reform. Somehow the Obama budget is being offered as a substitute for the $1.2 trillion in spending cuts from the supercommittee. But the slam down in defense remains a huge problem.
The deficit for the coming year, which is $1.3 trillion, would be 8.5 percent of GDP. More important, budget spending remains at over 24 percent of GDP. Debt held by the public for 2013 would be $12.7 trillion, or 77.4 percent of GDP. In terms of ten-year totals, spending would rise by $47 trillion and deficits by $6.7 trillion.

Really, this is a budget that says we must raise taxes in order to raise spending. It’s a 1 percent vs. 99 percent budget. But if these tax hikes ever went through it would be a 100 percent whack at future economic growth.

Obama chief of staff Jack Lew was wrong yesterday to suggest that a budget passed in the Senate requires 60 votes. By law, budget reconciliation requires only 51 votes. But this budget is dead on arrival. All the Republicans and many of the Democrats are not going to vote for across-the-board tax hikes. That’s a good thing.

But the question now is: What happens next? The U.S. is in a heap of fiscal trouble -- on the verge of bankruptcy. What are we going to do about it?

Bernanke: Right on Taxes

For one time in a row Fed head Ben Bernanke got the story right. No, it wasn’t King Dollar. It was taxes.

Testifying before members of the Senate Budget Committee today, Bernanke referred to the scheduled repeal of the Bush tax cuts. He said, “If no action is taken by January 2013, there will be a very sharp change in the fiscal stance of the United States government.”

Now, lest we give him too much credit, Bernanke was kind of making a Keynesian point. Why? Because he said in his “fiscal stance” argument that sharp spending cuts would also damage recovery. But at least he made his tax-hike opposition clear. And at least he opposes higher tax rates, which would in fact damage the economy.

He could have gone further. The Wall Street Journal is reporting that President Obama’s budget for 2013 will propose higher tax rates on the rich. Additionally, Obamacare in 2013 will raise the payroll tax 3.9 percent, and apply that to investment taxes such as capital gains and dividends.

Bernanke didn’t comment either on Obama’s millionaire-tax proposal or the Obamacare tax hike. But you can be sure investors and entrepreneurs are well aware of it.

One-on-One with Senator Marco Rubio

Rising Republican star, Senator Marco Rubio of Florida, was right on message concerning pro-growth tax reform, spending cuts, deficits and debt. He told me that President Obama never responded to the Rubio letter blaming the prez for creating a deadbeat nation that looks more and more like Western Europe. And Rubio told me he didn’t have all the answers, but he wants the GOP to be the party of legal immigration.

One-on-One with Newt Gingrich

Newt Gingrich and I go a long way back to the beginning of the Reagan supply-side revival of free market capitalism. I thought we shared that philosophy. But his attacks on Bain Capital using the class envy language of the left against capitalist success is a great disappointment to me. Newt resumed that Bain attack when he said in Florida that Mitt “lives in a world of Swiss bank accounts and Cayman Island accounts and automatic $20 million income for no work.”

Romney’s success earned his income. And his successful investments all represent market opportunities. However, once again I fear that Newt is all too willing to sacrifice his principles for political expediency in the heat of the campaign. Here is the interview with my criticisms and Newt’s responses (in two parts):

Obama's Tax Hike 'Designed to Come at Me': Romney

President Obama's proposal to increase taxes on the rich is "designed to come at me," GOP presidential contender Mitt Romney told me in an exclusive interview yesterday.

In his State of the Union speech Tuesday night, Obama proposed a minimum 30 percent tax rate on Americans earning more than $1 million a year.

The proposal—known as the "Buffett Tax" after Warren Buffett famously said his secretary pays a higher tax rate than he does— was a key part of the president's populist push for "fairness" in his speech to the nation.

The plan is "designed to come at me if I'm the nominee," Romney said in a taped interview. "If I happen not to be the nominee, he'll still take the 99-versus-one attack. He's really trying to divide America."

Romney, who gave a glimpse inside his personal fortune on Tuesday by releasing his U.S. tax returns, paid an effective tax rate of 13.9 percent in 2010 and expects to pay a 15.4 percent effective rate when he files his return for 2011.

Those rates are far below the top income tax rate on wages, which is 35 percent, because the U.S. tax code favors capital gains and other investment income by taxing them at 15 percent.

"The question is whether we're going to eliminate the capital gains tax break," Romney said. "So if you say we're going to raise that dramatically, you're going to choke off a lot of the capital that goes into creating new enterprises and creating jobs. It's the wrong way to go."

Romney said Republicans are not all about the rich. "I'm fighting to help middle class Americans get better jobs and better incomes. People who have been successful understand the path to success — we want everyone to enjoy success in America."

Blame Obama for Washington Gridlock: Senator Mitch McConnell

When President Obama outlines his goals for 2012 during Tuesday’s State of the Union address, he shouldn’t expect a lot of cooperation from Republicans, senate Minority Leader Mitch McConnell (R-Ky.) told “The Kudlow Report” Monday.

“With the Obama economy established now … unemployment is still at 8 ½ percent,” McConnell said. “It didn’t work, and we’re not interested in doing more of the things that don’t work.”

Obama will use his State of the Union address to outline a lasting economic recovery that will “work for everyone, not just a wealthy few.” He is expected to call for higher taxes on the rich, among other things.

While it sounds like more gridlock ahead in Washington, McConnell put the blame squarely on the president.

He said Obama was “AWOL” last year on his bus tour when Republicans wanted to tackle tax reform and entitlements, and he expects more of the same this year.

“He was not involved whatsoever,” McConnell said. “So I’m not optimistic, frankly, that in an election year that he’s likely to be any more engaged than he was last year.”

What’s more, he thinks the logjam in the nation’s capital is part of Obama’s agenda.
“That’s his strategy … to demonize Congress, to complain because he can’t continue to get everything he wants, like he did the first two years,” he said. “It’s all about his re-election and not about the country.”

One thing that McConnell thinks will get done is the payroll tax cut extension, which was extended for only two months in December when Congress couldn’t come to an agreement.

“We’ll be back at trying to figure out how to do that for the balance of the year and how to pay for it,” he said. “We don’t want to add to the deficit.”

Tonight's Debate

Might a strong Newt Gingrich debate performance tonight trump the ABC Nightline interview with Newt’s ex-wife Marianne? Remember, the debate comes before Nightline. And the roughly five million to six million people who watch the debate will be a lot more than the roughly two million folks who turn on Nightline. Plus, the Nightline crowd is largely liberal, and these viewers are not going to favor Newt Gingrich.

I’m not saying the ABC Brian Ross interview with Marianne isn’t something. But I’m not sure how important it really is.

Here’s what’s more important: Newt has opportunities in the debate tonight to push his Reagan 2.0 supply-side tax-reform plan. If he stays on message about growth, jobs, and prosperity, he can point to Mitt Romney’s more timid tax-reform plan.

Plus, Newt needs to explain how the numbers work both for his 15 percent flat tax and his plan for Social Security personal accounts. Growth is great, but we also have this problem called the budget deficit. Newt needs to explain.

Mitt Romney has opportunities tonight also. He needs to announce an early release of his tax returns. He also should explain that his investment income, which is taxed at a 15 percent effective rate, is also taxed at the corporate level. So in fact, Mitt is paying a combined 45 percent tax rate on his income.

And while he’s at it, Mitt should unveil (unleash?) his own bolder tax-reform plan. Most people agree that Mitt has the business experience and the better understanding of how the economy works. But he needs a bolder solution. Tonight could be the night.

And while he’s at it, Mitt should give a more detailed defense of both the successes and failures of Bain Capital. Details matter. And perhaps he can aggressively tell folks how a Bain-turnaround approach is exactly what’s needed for that troubled and near-bankrupt company, U.S. Government, Inc.

Finally, both Newt and Mitt should take on the cronyism in Washington. They should describe how they would end corporate welfare; how they would remove the costly and unnecessary deductions, exemptions, and carve outs in the tax code; and how they would get rid of all the government subsidies to big business for energy, exports, and agriculture (and ethanol). Changing Washington’s culture of cronyism is a key path to tax reform, deep spending cuts, and deficit reduction -- along with growth.

In other words, in a dead-heat race in South Carolina, both Newt and Mitt have big opportunities in tonight’s debate.

One-on-One with Ron Paul

After Congressman Ron Paul's strong second-place finish in New Hampshire, he's winning plaudits everywhere. Can the GOP find a home for the principles with the free market Austrian economic message? Take a listen:

Jon Huntsman: Romney Making Himself 'Completely Unelectable'

Republican presidential hopeful Jon Huntsman took aim at front-runner Mitt Romney on the eve of the New Hampshire primary, and told Larry Kudlow he’s the best candidate to unseat President Obama in November.

Huntsman, former governor of Utah and U.S. ambassador to China, said Romney is making himself “completely unelectable” when he makes statements like the one he made earlier Monday about firing people. During a speech to business leaders, the former Massachusetts governor said, “I like being able to fire people who provide services to me” when talking about how people should be able to chose their own health insurance.

“Words and statements matter and when you are in a heated campaign,” Huntsman said. “I just want to make sure we can get somebody who can go up against Barack Obama and not be chewed up by the political machine that’s going to have a billion dollars to spend on it.”

To take on Obama, the candidate has to be able to get more than just Republican votes, and Huntsman said he’s the man who can deliver.

“In order for someone to beat Barack Obama this year, they’re going to actually have to convince people who supported Barack Obama last time to support them,” he said. “If you can’t come out of New Hampshire or any other primary state with the Republicans and also a whole lot of independents, than we’re not going to have an electable candidate at the end of the exercise.”

Huntsman, who skipped the Iowa caucuses last week to focus on New Hampshire, is pinning his hopes on a strong showing in the Granite State's first-in-the-nation primary Tuesday. While he lags far behind Romney, some polls show him moving into third place. According to Monday's Suffolk University tracking poll, Huntsman has 13 percent of likely voters supporting him. Romney has 33 percent, down from 43 percent one week ago, and Rep. Ron Paul is at 20 percent.

Huntsman also took issue with Romney’s criticism of his service as ambassador to China under President Obama. During Saturday’s debate, Romney reprimanded Huntsman for implementing the policies of the Obama administration instead of helping Republicans across the country get elected. But Huntsman said his dedication to his former job should win him favor with voters.

“People want a leader who actually believes in putting their country first,” Huntsman told Kudlow. “And Governor Romney made it very clear yesterday that he believes in putting politics first.”

He also disagrees with Romney's stance on penalizing China for currency manipulation.

“If he imposes a tariff the first day he’s in office, as he has threatened to do, you will have retaliation immediately on the part of the Chinese and it will result in a trade war,” he said. “That is an absolutely nonsensical approach to doing business.”

While the Chinese aren’t appreciating their currency at a speed he’d like, he said the solutions need to be found during negotiations.

But he wouldn't join in the chorus of Republican candidates attacking Romney for his work as a venture capitalist. Instead, he thinks the front-runner’s record as governor is the bigger issue.

“They placed 47th in job growth in this country,” Huntsman said. “He didn’t put forward any big bold tax cut proposals, he didn’t put forward any tax cut offerings to his legislator, he didn’t do anything big, bold and courageous.”

Utah, on the other hand, was number one in job growth, delivered a flat tax, and reformed health care and education during his tenure, Huntsman said.

"What's most germane here is our records as governor," he said.

News From The Tax Foundation

A new video from Scott Hodge, president of the Tax Foundation, shows how our current "worldwide" tax system of taxing foreign profits is a toll charge for investing cash back in the U.S. and why moving to a "territorial" tax system will boost U.S. competitiveness, jobs, and domestic investment.

Tim Carney's Retraction

Blue-Collar Workers, Santorum, Kudlow
By Tim Carney, The Washington Examiner Senior Political Columnist
January 5, 2012

Tonight on CNBC, host Larry Kudlow had some forceful objections to my column today on Rick Santorum's popullsm, and the resistance that meets in Republican and conservative circles.

My column quoted Kudlow calling Santorum's economic plan "terrible," because it favors manufacturers by lowering their corporate income tax rate to 0%, while not doing the same for non-manufacturers. Kudlow says I accused him in the column of being anti-blue-collar. I certainly wrote that many Republicans are, but I don't agree that my column leveled this accusation specifically at Kudlow.

In fact, Kudlow wrote a column recently which sticks up for blue-collar workers.

He wrote: The Keystone opposition coming out of the White House is completely alienating all these people, the folks who work with their hands. And it’s these workers who have been decimated in the recession far more than any other group in the economy.

Kudlow and I have our disagreements about bailouts and taxes (and the meaning of my latest column), but on these points, we agree: (1) Santorum is wrong to pick winners & losers, and (2) many economy-distorting policies need to be fixed, but the policies that hurt blue-collar workers impose unique costs.

Ron Paul: Rick Santorum a Typical Big Government Republican

A day after coming in third in the Iowa Republican presidential caucuses, Rep. Ron Paul (R-Texas) set his sights on New Hampshire and took aim at Rick Santorum. He also declared he had no intention of leaving the Republican party.

Santorum is a typical “big government Republican” who is not really conservative, Paul told Larry Kudlow Wednesday.

Paul said he’s the true fiscal conservative, who believes in free market economics—a concept that both Santorum and Newt Gingrich don’t understand.

“I think they think in terms of patching up things, and maintaining the status quo, and don’t rock the boat and you can’t cut anything,” Paul said.

However, former Massachusetts governor Mitt Romney deserved a “little bit of credit” for working in the private sector, he said.

Santorum, a former U.S. senator, finished just eight points behind Romney during Iowa’s caucuses Tuesday. The presidential battle has now shifted to New Hampshire, which hosts the first in the nation primary next week.

The congressman from Texas, who did well among independents and younger voters during Tuesday’s caucuses, told Kudlow he’s candidate who can bring those votes to the GOP. He also slammed those who tried to vilify his supporters throughout the campaign.

“I thought the party was a broad tent, a big tent, [that] brings people in … but aren’t young people pretty important?” Paul said. “I get real energized when I go to the campuses and talk about economic policy and talk about gold standards and things like this, but they don’t want to invite these people in.”

But while his libertarian views may have brought in independent voters, Paul dismissed the idea of running of an independent.

“Right now I’m doing so well, why would I think about it?” he said. “I was raised in a Republican family. I was elected twelve times to Congress as a Republican.”