LARRY KUDLOW: On the economy also, Mr. Trump is trying to save Europe from itself

In his speech yesterday to a crowd of participants in Davos, President Trump said, “The United States is the economic engine of the planet. When America prospers, the entire world prospers.” Ronald Reagan reminds us of this. Including Mr. Trump’s tried-and-true observation that economic security at home is the source of national security abroad. And again, same thing with Reagan. I’ll tell you, if Ronald Reagan was the greatest president of the 20th century, Donald Trump now seems like the greatest president of the 21st century.

Yesterday’s Davos crowd should have been sitting there taking copious notes on yellow legal pads, so they could go home and use them to bring some prosperity to their stagnant European nations, which haven’t grown in years and years. They made every economic mistake in the book. Confiscating taxes, stifling regulations, false climate change, and unfair trade practices. Four years after the Ukrainian war, Europeans are still buying oil and gas from their arch enemy, Russia. Their extreme climate change policies have almost ended their industrial development. The most popular European economic policy today is to attack American companies, especially our technology companies through unfair trade practices, digital sales taxes, etc.

Mr. Trump has completely rejuvenated American capitalism with his supply-side prosperity program of tax cuts, deregulation, “drill, drill, drill,” and reciprocal fair trade. He may be stepping on his toes to make a point for a year or so, on things like the 10 percent credit card interest rate, or the amazing defense companies, but Mr. Trump is a capitalist who believes in the stimulus model of economic growth.

To quote my friend Art Laffer, if you pay more after taxes, you’ll get more work. Or investment. Or risk. Or edit. Or put the private sector back to work and stuff the big government socialist model into tiny little balls of moth. Mr. Trump has always believed in rewarding success, not punishing it. He knows, for example, that today’s strong economic growth will put people back to work, build new factories, and produce more of almost everything. This cannot be inflationary.

In fact, more production will lead to lower inflation. He knows that. He said that several times in Davos yesterday. He made clear that the old, no-growth model of austerity needed to be phased out and ended at the Fed with new people in charge.

Just a glance at the numbers released today reinforced the Trump boom. During the three quarters of his second presidency, the first year, last year, so far, GDP has averaged 4.4%, and when all the other stimulus, including energy, kicks in this year, it could deliver 5%, 6%, or 7% economic growth.

For some reason, people don’t want to talk about it, but inflation is falling. The most important indicator the Fed is using is the core PCE deflator, which is now at 0.00 percent per month, or just 2.3 percent per year over the past three months.

Durable goods prices rise by 2%. And the dreaded tariff inflation never materialized, even with Trump’s modest 15% tariffs already significantly reducing our trade deficit. Adding more to economic growth.

You know, if the Europeans had any common sense, they would follow Mr. Trump’s economic lead and bring prosperity to their people, because the truth is that the president is trying to save them from themselves.