Bloomberg reports Trump Turns to Loyalist Kudlow as Economic Adviser in Week of Shake-Ups.
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
- 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.
- 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.”
- Inflation Alarm: In 2010 he predicted Yellen is Spellin' Future Inflation.
- Oil: In 2014 he argued lower oil prices are unambiguously good.
- Five Percent GDP: In 2015 , echoing Trump, he said the U.S. should have a 5 percent growth target,
- Recession: In 2016, Kudlow predicted a business recession looms.
- Tax Cut: In December, he said Trump’s tax overhaul will lead to 3 percent to 4 percent growth,
- Growth Angels: In December, he said the president is on the side of the “growth angels.”
- Long-Term Interest Rates: In February, he said that a recovering economy could push long-term interest rates beyond 3.5 percent
- Stock Market: He predicted the stock market would go up if Trump was elected.
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.
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.
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.
My guess? Kudlow changes his tune. It will add to his already immense credibility.
Mike "Mish" Shedlock