Lawrence Kudlow writes that President Bush has had a very good year in 2007:
The troop surge in Iraq is succeeding. America remains safe from terrorist attacks. And the Goldilocks economy is outperforming all expectations.
At his year-end news conference, Mr. Bush said with optimism that the economy is fundamentally sound, despite the housing downturn and the subprime credit crunch. The very next day, that optimism was reinforced with news of the best consumer spending in two years. The prophets of recessionary doom, such as former Fed Chairman Alan Greenspan, Republican adviser Martin Feldstein, ex-Democratic Treasury Secretary Lawrence Summers, and bond-maven Bill Gross have been proven wrong once again.
Calendar year 2007 looks set to produce 3 percent growth in real gross domestic product, nearly 3 percent growth in consumer spending, and more than 3 percent growth in after-tax inflation-adjusted incomes.
Meanwhile, headline inflation (including food and energy) will have run at 21/2 percent, with only 2 percent core inflation.
Jobs are rising more than 100,000 monthly and the stock market is set to turn in a respectable year despite enormous headwinds. Low tax rates, modest inflation, and declining interest rates continue to boost Goldilocks, which is still the greatest story never told.
Mr. Bush's optimism is well-earned, in Congress too. He has stopped a lot of bad legislation on higher taxing and spending. He won on S-CHIP (State Children's Health Insurance Program) and the alternative minimum tax. He mostly prevailed on domestic spending. And he got much of what he wanted on war funding without any pullout dates.
On the other hand, Ambrose Evans Pritchard foresees catastrophe looming on the near horizon. I haven't talked to him recently about this, but I know what my brother Bill would say: Invest in precious metals.
RLC
