Donald Trump

Larry Kudlow Is a Big Upgrade for Trump's White House

Let's hope he mitigates the president's worst protectionist instincts.

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President Donald Trump will reportedly name Larry Kudlow head of the White House National Economic Council. For fans of pro-growth policies—deregulation, low taxation, and open trade—it's great news for obvious reasons. Kudlow has been a decades-long champion of these ideas, and those with coherent philosophies tend to offer some stability and continuity. This administration could use more of those things, not less.

Kudlow is also a noticeable upgrade over the outgoing Gary Cohn, not only because he has been a far more consistent voice for free markets—Cohn's support of carbon tax and a value added tax, and rumored moderating disposition on tax reform were all worrisome clues—but also because the syndicated columnist and former TV host is better equipped to sell those ideas to the public and lawmakers.

Kudlow, it's been reported, also played a role in persuading senators to support tax reform despite the intense political opposition, and hysterical warnings about the bill's homicidal intent and supposed enduring unpopularity. His problem with the Trump tax bill was that it wasn't cut enough on the individual side.

Of course, the hardest sell might be the president himself. "We don't agree on everything, but in this case I think that's good," Trump said of Kudlow this week. "I want to have a divergent opinion. We agree on most. He now has come around to believing in tariffs as a negotiating point." Trump hired Kudlow even though he co-wrote a piece for National Review only two weeks ago arguing that imposing tariffs on steel and aluminum imports is tantamount to imposing sanctions on your own country—"a crisis of logic." Kudlow, a former White House budget aide for President Ronald Reagan, has long held positions on NAFTA and trade in general that are diametrically opposed to the president's, which undermines the idea that Trump is rigidly opposed to any dissent within the administration.

And if tariffs are indeed merely a "negotiating point," that's good news.

While Kudlow immediately restores some balance in a White House that has picked up the protectionist rhetoric lately, it's highly unlikely that the propelling idea of Trump's electoral success will be shelved simply because he tapped a new adviser, no matter how convincing or compelling his arguments might be. It's worth considering, however, that Kudlow might mitigate some of the worst inclinations of the protectionist wing. Certainly, his presence doesn't hurt.

It's worth noting that tariffs, though important, aren't everything. And on most issues, Trump has displayed a surprisingly traditional fiscal conservatism. Cohn, it seems, would have been much more liable to push Trump toward acquiescing on economic issues in pursuit of deals.

So, the hardest hits by the news have been liberal pundits who are, despite all the talk of the Trumpocalypse, far more predisposed to being fans of the president's big-government inclinations than that of old-school fiscal conservatism. Many liberal columnists have already lined up to point out that Kudlow has made some bad predictions in the past. It's worth remembering that this puts him on par with just about every other economist who's ever appeared on TV or written a column or worked for government. Kudlow's rosy predictions seem predicated on an optimistic view that fails to consider the unpredictability of markets and world events. Economists—all of them—should stop trying to be seers.

The idea that anyone who's failed to forecast a recession but been right about the big ideas should be disqualified from a job in Washington seems to be reserved exclusively for fiscal conservatives. And watching the agitated reaction from proponents of high taxes and highly regulated top-down economics should imbue conservatives with optimism that Trump has made the right choice.

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32 responses to “Larry Kudlow Is a Big Upgrade for Trump's White House

  1. Ludlow consistently “predicts” that tax cuts more than pay themselves by stimulating economic growth, providing increased tax revenues despite the lower rates. Even Reason acknowledges that this is false, but Larry never ever shuts up about it. I’d also like to see Larry, who blew himself out of a Wall Street job and a marriage via cocaine, answer a few questions on his position with regard to the nation’s drug laws.

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  2. Who would you rather see spend the money — individuals or Fed Gov’t? I believe in the individual — you on the other hand… well, who knows?

    I’m a proponent of starving the beast — in the short term, individual tax cuts means less taxpayer money forfeited to the Fed Gov’t, while in the long term, grows the economy and increases GDP. I would rather have that state of affairs than have the Fed Gov’t operate under the concept that ALL taxpayer money is actually Gov’t money.

    As far as Larry’s past drug issues are concerned, he overcame his demons long ago. I’m glad to see him succeed in industry over the intervening decades. It proves his mettle and backbone, and it proves his new position in the WH. Why would you want him to answer a few questions about the drug culture when that issue is not in his portfolio?

  3. Tax cuts don’t “pay for themselves” and they don’t magically produce developing country-level growth. It’s great that Larry is anti-regulation and anti-protectionism but lets not pretend he’s not also astonishingly full of shit on a regular basis

    1. Taxes hinder investment and production which reduce growth and workers’ standard of living by raising the cost of living. Just because you’re ignorant doesn’t make it magic.

      1. Please try to read and comprehend the post you are replying to before calling anyone ignorant

      2. Please try to read and comprehend the post you are replying to before calling anyone ignorant

    2. Herbert Hoover’s Administration raised the sugar tariff to make home distilling more expensive, and added a bunch of search-and-seizure powers for asset-forfeiture by Customs and Treasury. Prohibition and its attendant asset forfeiture caused the Crash and Depression, but NO Way are the DemoGOP going to admit that. No US political party has ever admitted wrongdoing. Easier to make up a fairy tale about how Customs Tariffs Baaad, Communist Manifesto Income Tax Goood–without admitting that the Morrill Tariff caused the Civil War. Reality control is tricky, but with the Nixon Anti-Libertarian law bribing the media to rectify the past, it can be managed.

    3. Tax cuts don’t always pay for themselves, but it’s a fine line as to whether to cut or not cut etc.

      What we really need is spending cuts. But the question is, would our current taxes be sufficient to cover the amount of government we should have? I think yes, and then some! I want the debt to stop growing, but between the two I dunno… I just want some damn spending cuts. But we seemingly can’t have those, so a tax cut with some inevitable shadow taxes via inflation/government debt… Is it going to be any worse than the alternative? Probably not.

  4. I’d rather see John Stossel in the role, but Trump is insanely jealous of the ‘stache and would never have it. Still, Thomas Sowell or Walter Williams would have been nice if Trump wanted a talking head type over a policy wonk and the diversity pick would have been a nice dig at the “racist!” left.

    1. I would have gone with Peter Schiff. At least he predicted the recession while everyone in the media tried to ridicule him for it.

  5. And on most issues, Trump has displayed a surprisingly traditional fiscal conservatism.

    Is this the same Trump who followed up a massive tax cut with a giant porksplosion of spending? I’m hard pressed to think of a single instance of Trump demonstrating anything I’d call fiscal conservatism. Admittedly, this kind of behavior has become something of a tradition for those who campaign as “fiscal conservatives”, so I suppose there’s that.

  6. Hey Reason, you keep going on and on about the protectionist instincts and tariffs of Trump and how bad they are. But you fail to mention that the policies with regards to steel and the industrial metals industry started under the Obama administration and Trump is merely continuing this policy. You also fail to mention the many US plant closures and collapse of industrial metals prices in 2015 due to illegal Chinese dumping, subsidies, and smuggling. You also continue to fail to mention that the addition of tariffs under Obama in 2016 were far higher than Trump’s recent increase AND that they have both had POSITIVE effects on the metals business AND the US economy, allowing many idled plants to re-open, getting back US market share, getting back US jobs, becoming a more self-reliant economy domestically….and all of this without raising metals prices above historical averages or killing economic growth or demand. You guys are starting to sound like fake news on this tariff issue and Trump.

  7. Name one important economics thing Larry Kudlow has ever been right about.

    1. Kudlow is a free trader

    2. Have you ever actually read anything by him?

      1. Why do I even ask.

  8. Anybody bitching about Kudlow is going to lose their shit when Trump hires Cramer a year from now.

  9. What about Pompeo being Secretary of State and Bolton as NSA directory. War with Iran anyone?

  10. And who would Team Trump turn to for a small upgrade?

    Sarah Palin channelling Zippy the Pinhead?

  11. Kudlow is an idiot . dont get swayed by the title of the article.

    goo.gl/mipuQq

  12. Here we have the standard series of whining sockpuppet infiltrator posts to the effect that “the wrong guy” is getting government paychecks, and only hypocrites disagree. Sound familiar?

  13. Re: the “negotiating point” bit… You’re JUST NOW understanding this??? LOL

    This has been the whole point the entire time. I cannot take anybody seriously who didn’t understand this from day 1.

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