Trump has an economic-recovery-and-prosperity plan. Clinton has an austerity-recession plan. Historically, in presidential elections, the optimistic growth plan nearly always wins.
That said, Trump's view of monetary policy, especially the dollar, needs to be resolved. At the Economic Club of New York, he charged that the Federal Reserve is being "totally controlled politically." Elsewhere he has stated that Fed Chair Janet Yellen is keeping interest rates ultra-low in a political effort to boost Democratic fortunes. I disagree.
Yellen doesn't control the Fed monolithically. And the real debate about interest rates is going on inside the Fed.
True enough, the Fed needs radical reforms. In particular, it needs to replace its failed forecasting models and be rid of the academics who overwhelm the Fed system. But as New York Sun Editor Seth Lipsky has taught us, the best way to depoliticize the Fed is to develop a standard of value to make the dollar strong, reliable, and stable. In other words, a monetary rule.
JFK and Reagan's growth model included tax cuts and a steady dollar. Trump has taken a gigantic step toward restoring prosperity with his tax-cut centered fiscal policy. Hopefully he will soon turn to a sound-dollar policy to bolster the growth impact of lower tax rates and regulations.
And hopefully then he will pound away on all this on the campaign trail.
—Commentary by Larry Kudlow, a senior contributor at CNBC and economics editor of the National Review. Follow him on Twitter @Larry_Kudlow. His new book is JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.