S&P 500 earnings rose 53% in the second quarter from a year earlier, and voters are not enjoying it. Republicans have spent the summer arguing about the politics of that gap; Steve Moore and Art Laffer spent this segment arguing that the cause is a tax provision nobody talks about, arriving at exactly the moment AI needed it.
"We are seeing one of the biggest construction booms in 30 years in this country and where is the construction?"
Laffer was Ronald Reagan's economist and Moore co-founded Unleash Prosperity and advised the first Trump administration, so the tax bill they are defending is in large part one they helped design.
I listened to the full segment so you can skip it.
Here are the 8 takeaways that matter.
👤 Guests: Art Laffer, the economist who advised Ronald Reagan and gave the supply-side argument its name, and Steve Moore, co-founder of Unleash Prosperity and a former Trump adviser, in studio
🎙️ Host: David Asman, guest-hosting Kudlow for Larry Kudlow
📰 Published: 31 August 2026 on Fox Business, and on the Kudlow podcast feed
🟣 Apple Podcasts | ⏱️ 46 min
Key Takeaways
Corporate profits are booming and voters are not feeling it, and Laffer has no fix for that
The show's own figure was a 53% rise in S&P 500 earnings in the second quarter
Moore's causal chain runs from immediate expensing to the construction boom
Firms can write off capital spending at once, which arrived as the AI build-out began
The affordability argument cuts against raising taxes, on his numbers
He puts the average family's saving at $2,500 a year
Deregulation mattered nearly as much as the rate cuts, because it cut production costs
Laffer says $85 oil is cheap against the alternative he thinks was avoided
His claim is that the campaign against Iran removed a nuclear threat, and that oil would be far higher with one
North America is displacing OPEC as new supply comes out of Venezuela and Argentina
The data-center backlash has both parties in it, and the blue-collar unions on the other side
Moore's answer is to build where communities want the jobs, and he says West Virginia does
Single-payer health care would cost $71T to $211T on the studies the show cited
1. Profits Up 53%, Mood Down
Asman opened with the disconnect: S&P 500 earnings rocketed 53% in the second quarter from a year earlier, and, quoting Reagan's re-election campaign, it does not feel like morning in America to most people.
Laffer had no answer to the sentiment question and did not pretend to. "I have no idea what you can do to get that but the economy is doing very well, David."
His case is that the mechanism is already working. "Not only that, the unemployment rates low and when the unemployment rate is low and you've got some strength in the economy it goes right into profits and it goes right into wages and it goes right into employment"
He called that exactly what you want and exactly what is being delivered, and said it is to be expected
The 53% figure is the show's, not the guests'. Asman read it as the setup for the segment
2. Expensing Met the AI Boom
Moore's contribution was to connect the market to the tax law.
He named four booms and one cause. "I want to connect the dots between the boom in the stock market and boom in investment and boom in construction and manufacturing to that tax cut"
The provision he pointed at is immediate expensing. "As you know, David and you know Arthur, one of the things we did in that bill was allowed firms to immediately expense their expenditures."
Expensing lets a company deduct the full cost of an investment in the year it is made rather than spreading it over years, which is worth most to businesses spending heavily on equipment right now
Asman supplied the timing argument — that it arrived alongside the AI build-out — and Moore agreed
The rate cut came first. Moore said the United States had close to the highest business tax rate in the world when Trump first took office and that it was cut substantially
3. A $2,500 Tax Cut a Year
The political argument Moore wanted made is about affordability.
"The average family saved $2,500 a year on their taxes."
"How do you make things more affordable to raise the taxes on the people who pay them?" He said this is what he puts to Democratic friends who campaign on affordability
The show's own numbers on who benefited were read off a graphic. Asman cited 30 million seniors claiming an enhanced deduction on Social Security, 29 million filers for no tax on overtime, and more than 7.5 million claiming no tax on tips
Those are the show's figures, presented on screen, not the guests' own
4. Deregulation and Drilling
Moore's second cause was regulatory rather than fiscal, and he credited the argument to a predecessor.
He attributed the point to Bob Bartley, the former editor of The Wall Street Journal
"The regulatory cuts were almost as important and supply side matter because they decreased the cost of production." They also cut the cost of doing work, he said, and produced the drilling expansion
He conceded the price is high anyway. Moore said royalty prices are high now because of Iran, and argued that without the crisis he does not know whether oil companies could make enough money to pump, because the price would be down tremendously
The supply picture he described is hemispheric. Beyond the United States, he pointed to Venezuela and Argentina discovering oil, and asked Laffer whether North America is replacing OPEC
5. Laffer on $85 Oil
Laffer's answer was that the oil price should be read against a counterfactual.
He agreed on OPEC. "Yes, we are."
"By the way, if you think prices of oil are high right now just imagine what they be like with a nuclear Iran bombing Israel or wherever the heck it be." That, he said, would be much worse
He framed the campaign as prevention. Laffer called it a preventive measure taken to destroy one of the most hostile and dangerous states in the world
"I think oil prices are doing just fine given that we have eliminated the nuclear threat on the planet."
He said the action will save more in prices, affordability and lives than one can imagine, and had little patience for complaints about today's price
Asman's extension was about Saudi Arabia, putting it to Laffer that a nuclear Iran might target Saudi oil rather than Israel, and destroy the oil that exists in the Middle East
6. The Data Center Revolt
Asman turned to AI, and to the politics building against the infrastructure it needs.
The show's figure for how concentrated the AI revenue is came from Nvidia's quarter. Asman said $89 billion of the $96 billion Nvidia reported in revenue came from data centers
That is the host's number, read as the setup, not a claim by either guest
His analogy was to an earlier fight. Asman compared the movement against data centers to the campaign against fracking about twenty years ago, with the same arguments about water, and said much of it has been discounted
The coalition has flipped in an unexpected place. He said blue-collar unions are now against a ban, because the data centers are producing substantial job growth
Moore had just been to one. "I just visited a data center out in Loudoun County, Virginia and I never saw so many hard hat workers in my life making 50 to a hundred bucks an hour"
He acknowledged the opposition is bipartisan. Moore said there is a revolt on the left and the right against data centers
His proposed resolution is geographic. "My view is build them in communities that want the jobs." "West Virginia is saying we'll take them." — they want the jobs and the economic development
He tied it back to the profit numbers. Moore said chief executives are already saying on air that AI is being used to increase their productivity, and Asman added that it reduces inflation
7. Socialized Medicine's Bill
Laffer's line dropped during this stretch and Asman continued with Moore.
The cost figures came from the show and from Moore's own organization. Asman cited studies by the Cato Institute and by Unleash Prosperity putting the spending at $71 trillion to $211 trillion, and said it is an impossible amount to collect even taxing everyone at 100%
Moore's objection is to the rationing mechanism. "If you have something seriously wrong with you, you aren't going to get the care you need is how they cut costs", which is why he wants a more free-enterprise health system
Asman's supporting citation was The Washington Post, which he said has to admit that where socialized medicine has been tried, as in Great Britain, it is a failure
8. AI in the Clinic
The segment ended on what Moore expects AI to do inside medicine.
He said amazing news was already arriving that week, and Asman named pancreatic cancer
Moore added heart disease and a treatment for blindness. He described new technology he had just seen that was able, through AI, to give sight to the blind
His closing argument was historical. Moore said the same claim that it does not work keeps being made, and that not learning from history means repeating it — in this case, he said, a disaster
Bonus Insights
Laffer's line dropped twice and he missed the second half of the segment. Asman checked whether he could still hear, could not raise him, and carried on with Moore in studio — which is why the health-care and AI material carries only one of the two guests
Asman reached for a Reagan campaign line to frame the whole problem. His question was why, with profits through the roof, it does not feel like morning in America to most people, and Laffer's answer was that he did not know
Laffer and Moore's bottom line is that the profit boom, the construction boom and the AI build-out are one story with a tax provision at the center of it, that the political risk to the story is now the local revolt against data centers rather than anything in the market, and that today's oil price is cheap measured against the war they think was prevented.
Products, Companies & Tools Mentioned
Nvidia (The show's own evidence for how concentrated AI revenue is: $89B of $96B in reported revenue from data centers)
Unleash Prosperity (Moore's organization, and one of the two sources for the cost estimate on single-payer health care)
Cato Institute (The other source Asman cited for the $71T to $211T range)
The Wall Street Journal (Bob Bartley's paper, credited by Moore for the argument that deregulation mattered nearly as much as the rate cuts)
The Washington Post (Cited by Asman as conceding that socialized medicine has failed where it has been tried)
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