Kudlow's Economic Forecasting Credentials

Gary Cohn is gone. Larry Kudlow will be Trump's top economic advisor. Let's have a look at Kudlow's track record.

A television host from New Jersey, Kudlow is seen as temperamentally and politically similar to the president. He’s also seen within the White House as having credibility on both Wall Street and in Washington, where he served as an adviser to former President Ronald Reagan.

Given the obvious importance of credibility, let's investigate Kudlow's Economic Forecasting.

Larry Kudlow's Track Record

  1. Bubble Spotting: In 2005, he said “all the bubbleheads” looking for a housing-price crash in Las Vegas and Naples, Florida, and the wider economy, would be proven wrong.
  2. Bubble Spotting: In December 2007, the month the National Bureau of Economic Research later dated the start of the recession, he was arguing there was no recession and that the “Bush boom continues.”
  3. Inflation Alarm: In 2010 he predicted Yellen is Spellin' Future Inflation.
  4. Oil: In 2014 he argued lower oil prices are unambiguously good.
  5. Five Percent GDP: In 2015 , echoing Trump, he said the U.S. should have a 5 percent growth target,
  6. Recession: In 2016, Kudlow predicted a business recession looms.
  7. Tax Cut: In December, he said Trump’s tax overhaul will lead to 3 percent to 4 percent growth,
  8. Growth Angels: In December, he said the president is on the side of the “growth angels.
  9. Long-Term Interest Rates: In February, he said that a recovering economy could push long-term interest rates beyond 3.5 percent
  10. Stock Market: He predicted the stock market would go up if Trump was elected.

Record Synopsis

Kudlow is 1-10. Point 9 is unknown.

How does one get credibility with that kind of record?

  • Wall Street likes bullish forecasts no matter how wrong they turn out to be. Thus Wall Street approves all of those but number 6. That's a near-perfect 9 out of 10.
  • Trump is only concerned about points 7 thru 10. Kudlow is a perfect 4 for 4.

Camera Proven

Kudlow has another huge plus, as cleverly noted by the Boston Herald: Kudlow is Camera-Proven.

The man is near-perfect for the job, but there could be trouble.

What more could you possibly ask? Just one "little" thing.

Free Trade

Kudlow criticized Trump’s trade agenda before his election and more recently labelled his tariffs as tax hikes and prosperity killers.

He’s joined other economists in warning they put at risk 5 million jobs in industries that use steel.

If Kudlow does not change his tune on tariffs, he will be gone in short order.

Prediction

My guess? Kudlow changes his tune. It will add to his already immense credibility.

Mike "Mish" Shedlock

Comments
No. 1-25
gordon123
gordon123

So? Markets adjust and consumers were better off. The same logic would dictate that tariffs are a good thing if they protect companies from going under.

jiminy
jiminy

In the Vietnam era Kudlow was a leader in SDS, the violent commie front organization. I was in the army in the late 60s and the SDS thugs did their spitting and taunting in my direction. I guess Kudlow has changed but I've never heard him apologize to me or other vets.

Stuki
Stuki

Lower oil prices are always a good thing. Just like lower car prices, lower food prices, lower health care prices, lower taxes (government prices), lower house prices, lower stock prices, and lower prices of anything else. Labor possibly excepted, depending on how you measure and interpret.

Money (Gold) prices, as well as bond (time preference) prices, are also in a bit of a special category. But lower prices for absolutely anything else, is always a good thing. As they mean people can afford more of them in exchange for any given amount of labor (as in non-leisure). Hence are wealthier.

Junk bond collapses are neither here nor there as far as good and bad goes. The whole point of junk bonds is that they are risky. Hence, some win, some lose. So, you’ll have booms, busts and collapses. The only thing to glean from a world that lacks the latter, is that one is stuck with a government so adamant at protecting financial insiders, that they are willing to rob everyone else in an effort to spare those guys from a perfectly natural effect of involving themselves with speculative ventures.

To obtain the possibility of returns in excess of simply holding cash, you must take on risk of loss. Or more accurately, someone must take on risk of loss. The closer that someone is aligned with the one standing to gain if the bet pays off, and the one making the decision regarding what ventures to be engaged in, the less distorted capital allocation will be.

Too-big-to-fail and “we”-must-save-the-system scams are just that: Scams. Perpetuated by the connected, to bail themselves out at the expense of the ever-dwindling population of productives. Heck, the US Federal Government isn’t too big to fail. In fact, it would be a darned good thing if they failed, and disappeared, tomorrow; to be replaced (maybe) by something less singularly extractive, pointless and useless. So, the idea that some petty “system” consisting of nothing but overpaid at-best-unproductive-mediocrities, is somehow an irreplaceable cornerstone of anything worth preserving, is at best laughable. Or would be, if the consequences of a well indoctrinated public’s uncritical regurgitating of that illusion, weren’t so obviously tragic.

tedr01
tedr01

He will probably start to miss his entertaining radio show and want the paycheck that goes with it. I will give him 9-12 months working for Trump before he splits or is shown the door by Trump.

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