The Trump administration is reportedly set to announce that Larry Kudlow will replace Gary Cohn as the head of the National Economic Council and Donald Trump’s top economic adviser.
Kudlow is best-known as a television personality on CNBC whose theories about the economy consistently defy reality. He also has a blog, called KUDLOW’S MONEY POLITIC$.
Before dispensing economic analysis from his seat on CNBC, the now-septuagenarian Kudlow advised Ronald Reagan during his presidency. He then moved on to finance, working at Bear Stearns, where he engaged in the hallowed Wall Street pastimes of railing lines and making oily bets that would cripple an entire country’s economy.
Bear Stearns turned out to be the first firm to topple during the meltdown of the late 2000s. Kudlow was a pundit by then, but, unable or unwilling to adapt his economic theories to the reality inhabited by regular people like you and I, he repeatedly denied the existence of a housing bubble or a recession up until the final hour. His campaign to discredit anxiety about subprime mortgages began in 2005, with the article “The Housing Bears Are Wrong Again”:
All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market.
Throughout 2007 and 2008, he continued to assure the public there was absolutely nothing to be anxious about, as far as subprime loans or the housing market went. Jason Linkins wrote a good overview for HuffPost of Kudlow’s public statements from that time:
“Too much is being made of both the sub-prime credit problem and the housing downturn,” Kudlow wrote in November 2007. Come December, Kudlow was mired in echolalia. “The recession debate is over,” he wrote on a Wednesday. “There ain’t no recession,” he said the next day. “There is no recession,” he wrote, rounding out the week on Friday.
In February 2008, Kudlow assayed some troubling economic signs and quickly dismissed them. “Free market capitalism doesn’t mean we’re going to be recession-free. Maybe we are going to have a mild correction,” he wrote, before adding, “We are in a slow patch. That’s all. It’s nothing to get up in arms about.” Two days later, he continued to press the matter: “The greatest threat facing this country is not subprime.”
Kudlow’s “slow patch,” of course, became the most serious recession the country has seen since the Great Depression. But he had made a hasty escape from the sector by then, entering rehab for drug and alcohol issues and emerging unscathed as a TV talking head.
On CNBC, he was known for poignant commentary, such as his portrayal of big-bank lenders as the “victims” of massive rate-rigging scandals and the time he pointed to the “therapeutic” power of recessions.
“Recessions are part of capitalism,” he wrote. “They happen every so often.”
Really makes you think.