First Time Landlords Beware! Three Common Mistakes Made

Rental Properties are a future investment as well as a money maker. Making sure you have the right property to suit your individual needs is critical. You want to be 100% satisfied with your rental property when all things are said and done. You want to avoid being stuck with a property that you can't rent or has no investment future. In the following info I'll share 3 common mistakes made by first time landlords.

1. OVER PAYING FOR PROPERTY - The price alone is not your only concern, you need to research the area as well and ask the pertinent questions involved in your final decision. SALE PRICE of the houses around your prospective property (higher/lower). Is there a over abundance of houses for sale in area? Why? Is it a high crime area? (Check with local police or local library for crime stats). What are the schools in area like (reputation). You may have tenants with small children or planning a family. What is the job market like in the area? Is it a rising job market or declining, this will determine your turn over rate. Another turnover rate to be aware of is if there is a college or university in the area. Do you want a student rental? There are MORE questions to ask, these are just a few.

2. BEING UNDERCAPITALIZED -By this I mean going into your investment being financially unprepared. If you go into this with a no money down or minimum down payment, make sure you have capital in reserve. What happens if you can't find a suitable tenant immediately and your mortgage payment is due? Do you have the income to cover payments? Unexpected maintenance bills before your rental property can be rented. Unforeseen repairs in the first few months and as new tenants request repairs. Ignoring small repairs can lead to major repairs and expenses, but this is another topic for another time.

3. In relation to the above topic, not understanding FINANCIAL MANAGEMENT is another common problem area to avoid. Once the rental income starts to roll in it is easy to forget you have financial responsibilities. Being prepared is one of the first things to be forgotten once you have extra cash in hand. You must keep in mind this is a business as well as an investment. Besides the obvious maintenance bills and general up keep its the unobvious that will catch you off guard, now or in the distant future. One example is Court costs that people tend to forget. Small claims to recover unpaid rent (it will happen). You may recover these costs, but the initial costs will be out of pocket. Plus law suits must be fought diligently. It's prudent to be prepared. Also taxes, utilities (your choice), advertising for rental etc. Just some of the surprises that could be forgotten.

These 3 common mistakes only touch on the many issues you have to consider before purchasing that first rental property. Success is very attainable in the rental income market and the return on your dollar can be excellent, especially if you are prepared for any surprises or setbacks.

Binary Options - The New And Exciting Way To Bet

Some of you may have heard of Binary Option Brokers, some of you may not. It's a relatively new form of betting where you can place wagers on the market. To put it simply, it's being a stock-broker without the stocks.

Now, you're probably thinking the same as I did when I first started using Binary Options; 'This sounds like it's going to be complicated'. Granted, when you hear 'stock-broking', you immediately think of mentally exhausting and challenging work, but you couldn't be further from the truth when it comes to Binary Options.

For those of you who are computer savvy, you'll known that binary means 'a set of two', which is all you get from Binary Options. At Binary Option Brokers, you'll get two choices, rise or fall. Whilst these bets can be made in several ways, the basics lay in whether a company's, materials' or currency's worth will rise or fall. Like I said earlier, it's stock-broking without the stocks (and a lot less pressure too).

The only bets you can make are 'rise' or 'fall', so whether a stock will go up in price, or down in value. There are a variety of ways in which you can make these bets which I will explain later, but that's the basics of it. Most brokers will offer a demo version, so you can give the market a try before you play any of your own money. You can also view trends and previous market results to get a feel where your bet should be placed.

There are five different types of rise and fall bets to make, each follow the basic principle of stock either rising or falling, but differ on how you make your money.

Up Or Down

This is the basic option; all you have to do is decide whether the market will settle above or below its opening level. At the end of the day, the stock will have a finishing price which will be above or below its opening price, and that will be the final result.

Call Options

A call option is when you want the market to rise above a certain point. You set the point yourself, and if the market ends above your prediction then you will make a profit, if it settles below your expectations then you'll use your premium.

Put Options

Put options are the opposite of call options, instead of predicting the market will rise above a certain point, you'll bet that they fall below a certain point. All you need to do is place your expectation, then wait and see.

Targets

A target result is when you bet on the parameters that a stock will fall between. For example, you can bet that a stock will gain between 40-50 points that day, or if a stock will lose 25-35 points. This is more detailed type of bet which will take a little extra skill to get used to.

Ladders

Ladder bets are very similar to both call options and put options, except you can bet on both rise and fall rather than just one or the other. You still have to set a point you think the stock will land above/under.

Silver Coin Clipping in the Digital Era

Price suppression, market controls and market manipulation have become the modern day equivalent to coin clipping in the silver market.

Monetary debasement is not a new phenomenon and has been practiced by various governments throughout the ages, either as a way for them to profit at the expense of their citizens or to pay off high levels of debt.

The inflationary result of money debasement is the same regardless of the underlying motivation. It also allows unsound money policies to proliferate as the can gets continually kicked down the road.

Monetary Debasement in Rome

A classic example of monetary debasement was seen when the Romans allowed the value of the denarius to fall over time as the government changed the coin's size and silver content.

The denarius was originally made of almost pure silver and weighed 4.5 grams, but this weight was reduced to 4 grams during the Julio-Claudia dynasty and then to 3.8 grams under Emperor Nero.

By the latter half of the third century, when it was replaced by the Argentous, the debased denarius only contained roughly two percent silver.

The rush to debase

Depressions and the Government Finance Bubble

Depressions are typically the result of deep structural mal adjustments in an economy. They are ultimately about credit failure, although another way to look at it would be money failure, since all of the paper "money" in use today is actually either debt or credit.

Since 2009, a bubble in government finance that is very close to source of the U.S. Dollar's creation has grown to an unprecedented size. Like the private credit bubble that preceded it by only a few years, this bubble is even more laden with risk misperception that has in turn resulted in severe mispricing.

Of course, there will ultimately be a rebalancing, and nowhere is that maladjustment likely to play out with more drama than in the remarkably under priced silver market.

Silver's Performance Shines

Since 2003,the price of silver has gained 1,012 percent. Although many will be quick to point out the corresponding 1,000 percent rise in prices over the last decade, when this silver rally is compared with the rate of monetary and credit expansion - and any semblance of non-academic reality in terms of inflation - this notable rise in silver seems muted at best.

The silver rally has certainly not been without its attendant media drama apparently intended to keep most investors who could benefit from even a semblance of wealth protection far, far, away from the demonized, but intrinsically valuable, metal.

Furthermore, silver looks attractive from just about every investment angle. Comparing real supply and demand, current trading structure, technical price patterns, inflation-adjusted pricing, ratios relative to gold, and excessively easy monetary policy - all point to silver's undervalued status.

Derivatives Allow Silver Market Manipulation

After the Hunts were shut down, it became easy for money printers to artificially control prices using the futures and derivatives markets that did not obligate sellers to deliver physical metal, just paper money. This manipulation led to an accelerated boom for silver's industrial users.

Yes, former U.S. President Johnson and other world central banks had long ago de-monetized silver, but the drawdown in its above-ground supply was substantial at a time when prices remained trapped by derivatives that became permanently detached from supply and demand fundamentals.

This phenomenon occurred in parallel with the credit expansion and the rise of shadow banking in finance, both of which had essentially the same structural maladjustment result.

As always seems to happen when the prospect of new credit creation ramps up paper markets, the warning signs of monetary debasement will be enthusiastically dismissed by the mainstream media. Nevertheless, the end result is much like clipping coins.

With rising premiums and growing awareness of the disconnected state of the paper and metal markets, silver's undervalued state will not last long. Time is running out for investors as the supply of real silver quickly vanishes.

Ten Market Estimates and Predictions From 2012 - An Evaluation

Market estimates and predictions are always viewed with a degree of caution. Attempting to forecast the direction of shares, currencies and interest rates is very difficult to do, especially with any accuracy or consistency. However, some crystal ball gazing can be a necessary exercise for investment advisers and strategists, and it does at least allow us to focus our thoughts, consider various scenarios and evaluate risks and opportunities. Rather than rely too heavily on market predictions, we prefer to consider them as talking points that might encourage some insightful debate and thought.

On that note, let's recap and evaluate what we wrote a year ago regarding 2012.

1. Recession in Europe, while the US economy surprises us

Correct. Europe did fall back into recession despite most forecasters expecting at least some growth, while the US economy was much more resilient than many predicted as house prices stabilised and consumers began to spend again. Many of the worst problems in the United States over 2012 were political, rather than economic.

2. No break-up of the Eurozone in 2012

Correct. The Greek election was a bit of a debacle, but in the end the Eurozone stuck together and the European Central Bank resolved to do "whatever it takes" to keep things stable. For now, it's working.

3. No "hard landing" for China

Correct, but only half a point. China did avoid a hard landing (which would have had severe consequences for Australia and to a lesser extent, New Zealand) but we also said it would hit 8% growth. It looks to have just missed this hurdle, with actual growth for the year likely to be in the high sevens.

4. Shares have a positive year

Correct, but only half a point, because we weren't nearly optimistic enough. We picked the local market to deliver "at least 5%" and the US to rise 10%, but share investors have had an outstanding year with the NZX50 up 24.2% and the US rising 15.9%.

5. NZ Interest rates remain very low

Correct. A year ago the bank economists were, on average, expecting the Official Cash Rate (OCR) to hit 3.0% by the end of 2012, but it was unmoved all year at its current 2.5% as the recovery remained very sluggish.

6. The NZ dollar rises against our major trading partners

Correct. The NZ dollar rose 6.6% against the US dollar as the Americans continued to undermine their currency with their money printing policies. It also rose against the British Pound, the Euro and the Australian dollar.

7. Fixed interest doesn't repeat its 2011 performance

Correct. Fixed interest was the star asset class of 2011, delivering a stunning 13.3% compared with NZ shares, which fell 1.0%. But in 2012, shares had their best year since 2004 rising almost 25%, while fixed interest delivered a reliable yet much less inspiring 6.2%.

8. Obama is re-elected US president

Correct. It was a tight race and Mitt Romney put up a good fight, but the eventual election result meant an unchanged US political landscape. Ironically, rather than the usual post-election optimism, markets saw the status quo outcome as a major negative. The expectation of further political gridlock and further decision-making stalemates drove the S&P500 down 5% in the days immediately following the election.

9. Mighty River Power might not be the only game in town, as legislative changes might enable Fonterra to introduce share trading allowing the public to invest

Correct. A final decision on Mighty River was deferred into 2013 and Fonterra did indeed come to market (in the form of the Fonterra Shareholders Fund), and what a stunning debut it was.

10. Inflation falls back to low levels

Correct. Official inflation was just 0.8% - below the Reserve Bank's target band of 1-3% and unlikely to spark any interest rate rises in a hurry.

It's Important to Be Aware of Different Kinds of Tax Saving Investments

It goes without saying that proper tax planning is an essential constituent of personal finance. However, before you invest somewhere and see if you can avail tax benefits or not, it's important that you are aware of different forms of tax saving investments. Though they come under various categories, but the ones under Sec 80C are one of the most prominent ones; thus, it's important that you are aware of them so that you can plan and invest wisely.

To start with, life insurance policies are one of the largely chosen ways for savings. These policies for a very long time have been measured as a tax discount means. However, many times because of ignorance and lack of knowledge, the buyers buy the wrong coverage and policy and stay unsatisfied. Remember, a life insurance policy is gainful when you are on a lookout for ways to offer a monetary shield to your family in case of any mishap or unfortunate incident. What sum of insurance, you should have will depend on various factors; like your takings, expenditure, responsibilities and more. Remember that the tax benefit is the inbuilt benefit that will come with this product. So, think about this only after thoroughly knowing your needs and requirements.

Alternatively, you can also go for the Public Provident Benefit (PPF) or a Fixed Deposit (FD). The former is extremely favourable small savings scheme available to investors. The flexibility in contributions according to ones needs and requirement makes it a perfect choice for lasting funds and gaining excise benefit year on year. FD, on the other hand, for five years falls under Sec 80C tax benefit. Though generally, it is a feasible option for investors when last minute decisions have to be taken, yet the taxability of interest lowers the net yield. However, it is a good choice in current scenario especially for individuals in lower tax group.

This is not all; you can also make a tax saving investment, under Sec 80D. Under this section, one can benefit up to Rs 15000 for self and family, at the same time as added Rs 20000 is accessible for parents in senior citizen group on premium paid for a health insurance scheme. However, just like life insurance policy, remember that it should not be measured only for fiscal advantages. A health insurance is there to offer you the benefits in case of emergencies. Do a proper research and then, buy the right plan, which matches your requirement.

The Spending Sequester Will Grow the Private Economy

Today’s report of a 0.1 percent GDP decline for the fourth quarter came as a surprise to most forecasters. But it actually masks considerable strength in the private economy. Namely, housing investment in the fourth quarter jumped 15.3 percent annually, business equipment and software spiked 12.4 percent, and real private final sales rose 2.6 percent. All in, the domestic private sector of the economy increased 3.4 percent annually -- a very respectable gain.

And here’s one for the record books: Working ahead of year-end tax hikes, individuals shifted so much money to the fourth quarter at the 35 percent top rate that personal income grew by 7.9 percent annually -- a huge number. And there’s more: In order to beat the tax man, dividend income rose 85.2 percent annually. You think tax incentives don’t matter? Guess again.

Now, all this private-sector strength occurred despite the fact that government spending -- namely military spending -- dropped 6.6 percent. Inventories also lost ground and the trade deficit widened.

But here’s a key point: Military spending has now fallen virtually to its lower sequester-spending-cut baseline. It did so in one quarter by about $40 billion. So the brunt of the impact over the coming years has already been felt. (Normally, as of recent years, military spending has been virtually flat.)

Which leads me to another key point: Even with the fourth-quarter contraction, the latest GDP report shows that falling government spending can coexist with rising private economic activity. This is an important point in terms of the upcoming spending sequester. Lower federal spending, limited government, and a smaller spending-to-GDP ratio will be good for growth. The military spending plunge will not likely be repeated. But by keeping resources in private hands, rather than transferring them to the inefficient government sector, the spending sequester is actually pro-growth.

Big-government Keynesians think big spending provides big growth. They are wrong. This has been a 2 percent recovery -- the worst in modern times -- dating back to 1947. So let’s try something different. Let’s shrink government. Let’s let the private sector breathe and generate entrepreneurship and risk-taking.

Spending is the true tax measure of the economy, according to Milton Friedman, Friedrich Hayek, and others. Even a modest sequester spending cut of maybe $60 billion in 2013, and perhaps more than $1 trillion over ten years (most of which will come from a slower spending growth rate, not real reductions), will be the best thing to inspire business and market confidence as well as international credibility. And it maybe even shave a point or two off the spending share of GDP.

On March 1 the spending sequester is supposed to kick in by law. If Congress wants to help the U.S. economy, the best thing it can do right now is implement this sequester. Then it can round out an even larger growth package, including large- and small-business tax reform and adjustments to stop entitlements from going bankrupt.

One-on-One with Senator Ted Cruz

Last week on "The Kudlow Report", I asked Republican Senator Ted Cruz if he'd go with a government shutdown if it came to it on the debt-ceiling debate.  His answer: "I think we have to be prepared to go so far as to shut the government down -- if we don't get some serious policies to stop the out-of-control spending, to tackle the debt, and to get economic growth."

It was a bold statement.  Watch the full video here:

No Cliff Calamity: That's What Stocks Are Correctly Predicting

Despite all the media hullabaloo about the fiscal cliff and a potential recession if none of the Bush tax cuts are extended, stock markets have behaved calmly throughout this whole period. In fact, as of this writing today, the Dow is up 100 points.

I’m gonna guess that stocks, in their wisdom, are correctly sniffing that there will be no calamitous falling off the cliff. By that I mean there will be no $500 billion tax hike, which would be an economy killer.

Instead, after speaking with prominent Republican House and Senate members, I have come to believe the following: The GOP knows that Obama has the upper hand in this post-election battle. Therefore, they are preparing a strategic retreat.

Republicans don’t want to be the party of rich people and let Obama maintain his hold on the middle class. Republicans also don’t want to be the party of recession. So if no comprehensive deal is reached by President Obama and Speaker John Boehner, Republicans will not block an extension of the so-called middle-class tax cuts, which are roughly three quarters of the total.

It’s hard to know how this story will work itself out. There may be deals on upper-end tax rates, say 37 percent instead of 39.6 percent. And maybe even some lower tax penalties on capital gains and dividends.

Ideally, the GOP can get solid promises on spending cuts and entitlement reforms in return for a tax package. That tax package may include a dollar limit for tax deductions along with the rise in upper-end tax rates. Entitlement reform is also on the table. And so is a roughly $60 billion 2013 spending cut, which carries over from the across-the-board sequester. That is still possible.

But what is not possible is that House Republicans give up their constitutional prerogative to set the debt ceiling. That is their biggest point of leverage. And that leverage will carry over into 2013 as lawmakers once again attempt an across-the-board effort for pro-growth tax reform (flatter rates, broadening the base), serious structural entitlement reform, and more discretionary spending cuts. This will be the battle royale of next year.

As I said, no one knows how all this is going to play out in the next two weeks. But from the standpoint of the economy and the stock market, a worst-case tax-hike scenario that would sink GDP is not likely to happen.

There will be a deal to extend most of the tax cuts. And while higher tax rates on successful earners, small-business owners, and investors are most definitely not pro-growth, at least the across-the-board tax-hike calamity will be avoided.

Richard Fisher: Fed Won't Catch Markets If US Falls Off "Cliff"

Senator Kyl Sees Higher Revenues Without a Tax Hike

A federal budget deal to avoid the fiscal cliff can be achieved without

raising tax rates, Senate Minority Whip Jon Kyl said Friday on the Kudlow

Report.

“Tax revenues can be generated by two ways other than raising tax rates,” he said. “One is to eliminate some of the deductions, credits, exemptions, special provisions in the code that end up producing more revenue but without affecting the rates. And the other is through economic growth.”

The senator from Arizona said he thought it likely a deal could be struck to avoid the so-called “fiscal cliff,” a deadline by which the lack of a federal budget would result in the expiration of the Bush tax cuts and trigger automatic spending cuts.

Kyl sees additional revenues as the key.

“If we can focus, not on tax rates, but to give the president something that he

wants, more tax revenues, as I said, there are ways to get more tax

revenues,” he said. “Either through and/or producing more wealth as a

country, thus resulting in more taxes paid to the government.”

The Republican senator also took issue with the recommendations of the

special committee co-chaired by former Sen. Alan Simpson, R-Wyo., and

former Clinton White House Chief of Staff Erskine Bowles.

“Simpson-Bowles is not a good template here because it sets up a contest

between lowering marginal tax rates and raising the business taxes, that is to

say, dividends, capital gains and the estate tax,” he said. “Simpson-Bowles

in effect says, you can have lower rates on one side or another, but not both.

That’s not good.” 

Once Bullish, Leon Cooperman Grows Wary of Stock Valuations

For years famed investor Leon Cooperman has talked up stocks. But on last night’s show, he sounded the alarm.

Cooperman, who is a widely followed investor and chairman of the hedge fund Omega, has made headlines for quite some time calling stocks 'the best house in the financial asset neighborhood.'

Back in 2011, Cooperman outlined his pro-stock market thesis at length on CNBC.

But on The Kudlow Report, Cooperman made a surprising statement that presumably reflected a shift in his outlook. He told Larry, “I think the stock market presently is fairly valued. I believe the profit cycle is peaking.”

Cooperman went on to say that the market multiple may be too high.

“Historically the market multiple is around 15,” said Cooperman, but over the past 50 years or so the growth rate has been much more robust. If we’re moving into a period of slower growth than the premium investors are willing to pay for stocks will probably decline. 

That’s not to say Cooperman is a seller – he’s not. “I’m not aggressively bullish or bearish,” he explained, “I’m simply saying I think the market is now fairly valued.”

And he reiterated something he’s said many times before. 

“If you must put money to work I still don’t think there’s a better alternative than common stocks – the Fed has made all the alternatives very unappealing."

Nonetheless, his commentary suggests his outlook is shifting.

Cooperman also told Larry Kudlow that he thought all the concerns about the fiscal cliff or the confluence of tax hikes and spending cuts that could go into effect as soon as January 1^st – are overblown.

“They’ll kick the can down the road,” he said. “There’s no way a politician will allow the cliff to hit.”

Does the Fed Have Grave Concerns About the Economy?

On Tuesday, the Federal Reserve re-affirmed its commitment to using unconventional efforts to stimulate the economy.

In the latest Fed statement, the central bank said it would keep buying $40 billion in mortgage-backed debt per month to push interest rates lower.

The Fed also repeated its vow to keep interest rates near zero until mid-2015.

Although that may seem like the Fed is sending a signal to markets that they’re intent to drive the economy, no matter what the cost – that may not be what the Fed is really saying.

According to former Fed Governor Kevin Warsh the move isn’t a show of strength – it’s something far more ominous.

“I think the Fed revealed in their actions just how grave they think the economy is,” he said on The Kudlow Report.

The statement shows, “just how concerned they are about the economy’s prospects – just how concerned they are about the 'fiscal cliff' and Europe.”

Warsh served as a member of the Board of Governors of the Federal Reserve System from 2006 to 2011. From 2002 to 2006, Warsh was Special Assistant to the President for Economic Policy, and Executive Secretary of the National Economic Council.

His take on the Fed – as someone who was once on the inside – is that the Fed feels they’re the only institution standing between the nation and a terrible downturn.

“The central bankers feel their doing it all by themselves – that they’re not getting help from Congress or the administration.”

It seems Wall Street may share the skepticism expressed by Warsh. Again both the Dow and S&P closed lower.

Mitt's Tax Cut Mulligan

For some unknown reason, Mitt Romney dialed back his tax-cut plan yesterday, the same day new reports showed incomes are dropping.

Last month, median household income fell by about $500, and since Obama became president, income is down over $4,500. But under Mitt Romney’s 20 percent tax-cut plan, if he truly believes it and follows through with it, a married couple making $70,000 a year would save over $2,000. And take-home pay for a middle-class married couple earning about $140,000 -- with their tax rate dropping to 20 percent from 25 percent -- would increase by over $7,100. Obama has no such middle-class tax cuts.

So why would Governor Romney tell an Ohio crowd on Wednesday that they shouldn’t “be expecting a huge cut in taxes, ’cause I’m also going to lower deductions and exemptions.”

What is that all about? What kind of message is he sending? Is it pro-growth take-home pay? Or is he pulling back and hedging his bet?

I wrote in my last column about the potential benefits of the Romney plan. And I suggested that Romney should give specific examples of higher take-home pay from his tax cuts. And then I suggested that he draw a red line for middle-income taxpayers, and say “you will not lose you’re your deductions.” In other words, send a true growth message. And make it clear, not muddied.

This afternoon, one of the most senior people in the Romney-Ryan camp called me to say that Mitt misspoke, and that I should give him a mulligan. This person told me there’s no pull-back on the pro-growth tax-cut message, no new overemphasis on debt, and no departure from the Reagan-Kemp tradition.

Okay, even though I’m a tennis player, I’m willing to give Mr. Romney a mulligan. But I’ll say this: The growth message has to be crystal clear for the debate next Wednesday night. Mitt is slipping in the polls. People are confused about his message. He must clarify it.

Lower marginal tax rates. Higher middle-class take-home pay to offset lost income under Obama. More family financial resources. More growth and more jobs.

This doesn’t have to be so hard.

Just How Fragile is the U.S. Economy?

As if the looming "fiscal cliff" isn’t frightening enough, new results suggest it’s already doing very serious damage to the economy. And it’s only September.

According to a new survey released by the Business Roundtable, corporate America’s view of the economy is as bleak now as it was in 2009, when the economy was struggling to emerge from recession.

Also, the survey shows executives are now more likely to cut jobs over the next six months, and that companies are less likely to raise their capital spending.

Largely the CEOs who participated in the study cited the "fiscal cliff," or the confluence of tax hikes and spending cuts that could go into effect as soon as January 2013, as a major influence behind their decisions.

Dow Chemical CEO Andrew Liveris called the fiscal cliff a 'multiplier' that makes any negative catalyst that much worse.

As much as $500 billion in federal spending reductions and expiring tax cuts are due to take effect if Congress and the White House are unable to find a compromise on these issues by Dec. 31, 2012.
As a result, the CEOs also lowered their forecasts for U.S. economic growth.

“The government is failing us as a whole,” charged Liveris on The Kudlow Report. “This is self-inflicted uncertainty.”

They now expect real gross domestic product to rise 1.9 percent in 2012, down from a June forecast of 2.1 percent growth.

In turn, these concerns have already begun to ripple across the economy, and may in part explain the spate of lowered earnings forecasts from companies such as FedEx and Norfolk Southern.

The findings come less than two months ahead of the U.S. presidential election, in which the weak economy and stubbornly high unemployment are shaping up to be key elements in voters' choice between incumbent Democratic President Barack Obama and Republican challenger Mitt Romney.

The Romney campaign was quick to call out the results as a sign that Obama's economic policies were not working.

"Business leaders have the gloomiest outlook in three years and the President's failed economic policies of higher taxes and more regulations will only make things worse," spokesman Ryan Williams said in a statement.

The Obama campaign did not immediately respond to a request for comment.

“Whatever president and congress we get in November, it doesn’t matter. What matters is that we get one that gives us solutions,” said Liveris.

CEOs who participate in the Business Roundtable collectively generate $7.3 trillion in annual revenue and employ some 16 million people.

Romney Didn't Make the Sale

Did Mitt Romney make the economic sale at the Republican National Convention? Did he convince people who are living at the margin or unemployed and discouraged that he has the answers to the economy? Frankly, I don’t think so.

I do not understand why he did not talk about his 20 percent across-the-board personal tax cut plan that would help the middle class enormously. He never mentioned it and he went into no detail on the business tax cut plan.

This plan is terrific for competition and global investment. He talked about a jobs tour. I frankly have no idea what a “jobs tour” is. I do know that 23 million Americans need jobs. I don’t know that they need a president on a jobs tour to inspect them.

It concerns me that in the economic zone, he didn’t make the sale to the independents, so-called Reagan Democrats, or to Clinton Democrats. I didn’t hear anything new. I didn’t hear anything specific, and it troubles me. I do think he helped himself enormously with his biographical narrative. He came off as a humble, grateful man.

Again, on the economic front I don’t think he made the sale; I don’t think he convinced the independent voters and I don’t think he’s going in the right direction in tax policy.

ON BIG BUSINESS:

I think he needs to be more specific. It’s not about big business -- it’s really about small business. And guess what? Small businesses pay the personal tax rate — the LLCs and the S-corps. That is another reason why I don’t understand why he doesn’t talk about the 20 percent tax cut. It helps small businesses and it’s the opposite contrast to Obama, who wants to raise taxes on those people. I didn’t hear any contrast Thursday night, except a passage on success. The best line from an economic standpoint was “In America, we celebrate success, we don’t apologize for success." That is a great line, but I wish he had more contrast with President Obama.

ON MARCO RUBIO:

Sen. Marco Rubio’s introduction of Romney was one of the most brilliant speeches I have heard in a long time. Freedom was his key point. America is about freedom — economic freedom, political freedom, religious freedom, and faith. It was just utterly brilliant and the guy is an absolute Republican superstar.

Paul Ryan's Speech: Too Much Debt, Not Enough Growth

Republican vice-presidential candidate Paul Ryan gave a powerful speech Wednesday that repeatedly brought conventioneers at the Republican National Convention in Tampa to their feet.  I am going to give him high marks for his speech’s delivery.

Ryan, in typical fashion, seriously and analytically ripped apart the Obama Economy, what has been called Obamanomics.  He ripped it to pieces, and it needed to be done.  But most especially, he ripped apart Obamacare.  Ryan also did his level best to defend the Republicans against the usual attacks on Medicare reform—that is, what the Democrats call “Mediscare”.

However, I was disappointed that his economic growth solutions were somewhat muddled and unclear.  At one point in the speech, rather than speak about Mitt Romney’s own tax rate proposals, Ryan used the term “tax fairness,” a Democratic term frequently used by President Obama and other liberal Democrats.   This was surprising to me.   Ryan cited Jack Kemp and the Reagan tax reform (and I am, of course, part of that gang).

But the reality is, Ryan never mentioned tax cuts during his speech.  Not the 20 percent across-the-board supply-side reduction in marginal tax rates, nor the 25 percent corporate tax rate down from 35 percent.  These pro-growth measures have been proposed by Mitt Romney, but it is a mystery to me why Ryan did not mention them.  

He dwelled on debt to an extreme point.  I don’t think discussing debt connects with people who are unemployed or marginally employed.  I think they want a good-paying job, and debt is almost an academic abstraction.    When Republicans run on debt and deficits, they almost always lose.    When Republicans run on growth, limited government, lower spending, lower tax rates, and de-regulation—they win.  Ryan’s speech was confusing on the growth issue, and that was disappointing;  I don’t want to be confused and the American people shouldn’t be confused.

It will be left to Mitt Romney on Thursday night to clarify his own growth policies.   I want growth, growth, growth.  Wednesday night,  I didn’t get growth, growth, growth;   I heard debt, debt, debt. 

Larry Kudlow Interview at the RNC

Kudlow Goes One-on-One with Paul Ryan

On last night’s Kudlow Report, Paul Ryan talked to me about pro-growth policies and the American idea. He defended his Medicare option as a bipartisan plan going back to the Clinton era. He talked supply-side tax reform, along with spending reduction, deregulation, energy, and sound money. Preventing the fiscal-cliff recession threat will be Romney-Ryan’s first action. 

No July Recession

While the fiscal-cliff tax hike still hangs like the recessionary sword of Damocles over the economy, the economic stats for the month of July do not show it. In fact, key data points suggest there is no double-dip recession. All in all, it’s still an anemic 2 percent economy -- the worst recovery in modern times dating back to 1947. But at least for the sake of the country, there is no recession in sight for now.

The 163,000 jobs gain for July -- even with a lot of weakness inside the report -- was a move away from recession. Retail sales had dropped for three-straight months, which made a recession look perilously close. But the July number came back at 0.8 percent. And today’s industrial-production report also surprised on the upside, with a manufacturing gain of 0.5 percent. That sums to 1.7 percent annually over the last three months and 5 percent over the past year. Prior to these releases, the ISM reports hovered around 50, which does suggest ongoing weakness. But it’s not yet a true recession signal.

Finally, the consumer price report for July shows zero inflation for the second straight month. The CPI is actually rising only 1.4 percent over the past year. Energy prices have fallen 22 percent annually over the past three months while food prices are up only 1.1 percent during that period. The Midwestern drought could drive up the food-price component, but it looks like it will be a manageable event -- not a catastrophe.

Now, a roughly 2 percent economic growth rate is only half the growth we ought to be having. In fact, Mitt Romney’s economic plan targets 4 percent growth. And supply-side tax cuts, spending restraint, lighter regulation, and a stable dollar could surely revive the animal spirits to get us back to that 4 percent number.

But that’s for the campaign trail. All I’m saying here is that the July economy does not show recession. For the sake of the country, that’s a good thing. But surely we can do better.

A lot better.

Paul Ryan's Old-Fashioned American Vision

Talk about apcryphal, here’s one of my better Kudlow forecasts regarding Paul Ryan as the conservative man of the year.

This was originally printed in Human Events in December of 2011.

When you think of Republican congressman Paul Ryan, terms like earnest, serious, and important come to mind. So does the term old-fashioned. Ryan comes from an old-fashioned place, the blue-collar town of Janesville, Wisconsin. He cherishes the old-fashioned values of a faithful family man. He even looks old-fashioned, with his white shirts and striped ties. And he uses old-fashioned argument skills, persuasively weaving big-picture themes with the numbers that back them up.


And Ryan has old-fashioned goals, too, like saving America from fiscal bankruptcy, economic stagnation, and a European-style entitlement state.

“Just look at what happened across the Atlantic,” Ryan told me in a year-end interview. “We have to avoid that. We must reclaim our founding principles of economic freedom and free markets. We must preserve the American Idea.”

With this vision, and with a pro-growth budget framework called “A Roadmap for America’s Future,” Ryan’s serious ideas have seriously gotten under President Obama’s skin.

In a White House meeting this year, Ryan’s superior knowledge of health care baffled Obama and left him speechless. And the serious Ryan budget, which lowers spending by $6.2 trillion and reduces deficits by $4.4 trillion over ten years, totally outflanked the White House. It embarrassingly exposed the Obama administration’s flimsy and inconsequential 2012 budget, which even rejected the findings of Obama’s own Bowles-Simpson fiscal commission. (Another Oval Office embarrassment.)

And when Ryan unveiled his first Medicare-reform package, which featured patient-centered consumer choice and market competition, the White House went nuts. Team Obama whipped up a Mediscare panic, resorting to a fictional caricature of Ryan forcing old ladies off a cliff. But the charge that the Ryan plan “ends Medicare” couldn’t be further from the truth. The website PolitiFact labeled this “the lie of the year.”

Ryan later amended his Medicare reform to keep the existing system as an option, and bolstered it with a menu of market-based private insurance plans to promote cost-cutting choice and competition. But he did so with the bipartisan support of Sen. Ron Wyden, a Democrat from Oregon. How did the White House react? It went rhetorically ballistic, although it couldn’t put together a serious response.

No, Ryan’s reforms didn’t quite resonate in the White House. But they did force a serious debate about domestic policy and the economy throughout the country. With his comprehensive budget of deep spending cuts, entitlement reform, and tax simplification -- a plan that would strictly limit government and unleash growth at the same time -- Ryan became the most influential Republican of his younger generation. Quite likely, he became the most influential thinker in today’s GOP. For these reasons, Paul Ryan has been chosen as the Human Events Man of the Year.

The Ryan “Path to Prosperity” budget passed the House this past spring. In effect, it became Republican policy. Unfortunately, things went downhill after that.

The summer debt-ceiling crisis produced a meager $1 trillion in spending restraint, way below the Ryan goals. Then the Supercommittee, which couldn’t even produce a policy, fell back on the trigger of another $1 trillion in automatic spending cuts. And now the year is ending in a chaotic and unserious gridlock over the temporary extension of a temporary payroll tax holiday that has no economic-growth content and ultimately would blow more holes in the Social Security trust fund and the overall budget. A disappointed Ryan told me, “Tea Party enthusiasm hasn’t yet translated into the kind of reforms we need. One-third of the government has only limited political power.” He added that the 2011 budget narrative shows “the total un-seriousness of the left in tackling problems.”

Nevertheless, the Republican budget leader is an eternal optimist. He believes “there is a shift to the right” in the country, “toward free-market approval.” He sees evidence that “We are winning this debate.” He says, “The country will not accept a permanent class of technocrats that will diminish freedom, enhance crony capitalism, and allow the economy to enter some sort of managed decline.” Ryan talks about “reclaiming founding principles,” and about “fighting paternalistic, arrogant, and condescending government elites who want to equalize outcomes, create new entitlement rights, and promote less self-government by the citizenry.”

In other words, Rep. Paul Ryan is offering a completely different vision than the one Obama outlined in his Osawatomie, Kansas, campaign speech in early December. Ryan wants “the right to rise,” not a third wave of liberal progressivism. He wants to stop Obama’s attempt to add to the New Deal/Great Society with the statist universal-health-care program called Obamacare and an effective nationalization of the energy and financial sectors. And he completely rejects Obama’s divisive, big-government, punish-wealth, tax-the-rich leftist populism.

“A ruling system of big business, big government, and big-government unions does violence to the notion of entrepreneurial capitalism,” Ryan told me. “Whether it’s TARP, Fannie or Freddie, cap-and-trade, or Obamacare, this must be stopped.” Ryan stands against what he calls “the moral endgame to equalize outcomes.” He says: “No consolidation of power into a permanent political class. Equality of opportunity, not result.”

Drawing from the Declaration of Independence, Ryan believes that individual citizen power in a democracy comes from God and natural rights, not government. And he believes these natural rights flow directly to the people. It complements what Reagan always said: Government works for the people, the people don’t work for government.

The congressman calls himself a second-generation supply-sider, flowing from his mentor Jack Kemp. He knows that growth incentives work, and that our tax system should reward success, not penalize it. Ryan frequently notes that Obama’s vision would raise federal tax rates toward 50 percent, which doesn’t even include increasing state and local tax burdens. Countering this, the Ryan roadmap features a modified flat tax, with two brackets and a 25 percent top rate.

But Ryan also believes that under the threat of fiscal insolvency, supply-side tax cuts must be accompanied by entitlement reform, deep spending cuts, and an end to corporate welfare. Rounding out his policy proposals, the budget chief wants the Federal Reserve to move to a single mandate for price stability and a stable dollar.

So, many have asked, why didn’t the intellectual and policy leader of the GOP run for president? His supporters continue this drumbeat, with many hoping for a deadlocked convention in August, and the emergence of an optimistic, pro-growth, center-right man with a clear vision to save the country.

Well, here comes the old-fashioned Ryan, a man who’s interested in policy, not personal ambition. He also has to help raise his young family. He and his wife Janna have two boys aged seven and eight and a girl aged nine. He’s been teaching his nine-year-old Liza how to shoot a .243 light-caliber Remington 700 bolt-action hunting rifle. The weekend before Christmas, he took his crew to Medieval Times on the North Shore of Chicago, where they watched knights on horseback jousting with each other while eating a little junk food. Family is clearly more important right now than presidential ambition.

So would he become OMB director in a Republican administration? “I don’t think about it,” he said. But for the 2012 election, Ryan has a political vision: Republicans must develop and communicate a clear policy agenda along the lines of his “Path to Prosperity.” Then, should they win, the GOP can use this agenda to govern effectively.

“Reagan had this right,” Ryan told me. For the congressman from Wisconsin, it’s the American Idea. That’s Ryan’s vision. And the Republican party better take notice, because this election could be America’s last chance for a very long time.