Moneybox

Larry Kudlow Is an Insufferable Wall Street Hack. Let’s Hope Trump Picks Him to Replace Gary Cohn Anyway.

US conservative commentator and economic analyst Larry Kudlow speaks on the set of CNBC at the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 8, 2018 in New York.  / AFP PHOTO / Bryan R. Smith        (Photo credit should read BRYAN R. SMITH/AFP/Getty Images)
I man, we’re probably not going to do any better.
BRYAN R. SMITH/Getty Images

On Tuesday, Donald Trump said there was a “good chance” that he would pick CNBC talking head Larry Kudlow as the next director of the White House’s National Economic Council, the powerful position recently vacated by Gary Cohn. “I’m looking at Larry Kudlow very strongly,” Trump told reporters.

In any other White House, the news that Kudlow was a frontrunner to become the president’s top economic adviser would be cause for despair. A highly paid mouther of ‘80s-vintage supply-side platitudes, the man has spent decades yapping in favor of Wall Street-friendly tax cuts and deregulation while blowing calls about the direction of the economy. He’s the human embodiment of an overpriced power tie—a loud throwback that bankers really like.

But this, of course, is not any other White House. It is the Trump administration. And given the alternatives, I’m rooting for Kudlow to get the job.

Right now, the administration appears to be in full MAGA mode, and is in the process of imposing steel and aluminum tariffs that could—depending on who they actually end up targeting— end up being the start of a nasty and damaging global tit-for-tat. One of the key architects of the tariff plan, White House trade czar Peter Navarro, is reportedly also in the running to become NEC director, a perch that would give him even more influence within the administration. Navarro is a Ph.D. economist who, unlike most of his peers, is obsessed with the trade deficit and is convinced that America is in an existential struggle with China. Worse yet, he seems to have figured out that the best way to win Trump over is to convince him that your idea is his own. “My function, really, as an economist is to try to provide the underlying analytics that confirm his intuition,” he recently told Bloomberg while talking about the tariff plans. “And his intuition is always right in these matters.” Some have mocked these comments as a sign that Navarro is a mere “sycophant” and “propagandist.” But in Trumpland, they seem more like the words of a person who knows how to push his own agenda.

Kudlow, a former Reagan official who spent time as Bear Stearns’ chief economist despite lacking a Ph.D., is Navarro’s antithesis on trade. He has a long track record opposing tariffs—he calls them “prosperity killers”—and criticized the administration’s steel and aluminum plan. But Kudlow also happens to have Trump’s respect. He’s acted as an informal adviser to the president since his campaign, and has been particularly influential on tax cuts. Unlike Gary Cohn, he seems to have found a middle ground with Trump on the trade issue.

“We don’t agree on everything. But in this case I think that’s good. I want to have a divergent opinion,” Trump told reporters. “We agree on most. He now has come around to believing in tariffs as a negotiating point. You know I’m re-negotiating trade deals, and without tariffs, we wouldn’t do nearly as well.” This is obviously a bit of a retreat for Kudlow. But it still suggests he’d be an internal voice of caution on trade, and his trusted presence could keep Trump from chasing his worst “intuitions.”

I don’t want to heap too much praise on Kudlow. As Calculated Risk’s Bill McBride once wrote, the man “is usually wrong and frequently absurd.” He mocked warnings about the housing bubble, wrote that there was “no recession” in December 2007 (the month the recession started), and declared that growth was about to rebound in September 2008—days before Lehman Brothers collapsed. He has occupied himself for the better part of a media career calling for regressive tax cuts of the sort that Trump and the Republican party just enacted. He is no great economic light.

But nor is anybody else who Trump might realistically pick as his new economic lead. Other candidates for the job reportedly include budget director Mick Mulvaney, whose big accomplishments include fooling Trump into proposing cuts to disability insurance and giving a hand to payday lenders, and conservative econo-hack Stephen Moore, who’s basically Kudlow with worse suits and less charisma. There are also reports that Trump is considering director of strategic initiatives Chris Lidell, a former GM and Microsoft executive who seems to have spent most of his time in the White House helping Jared Kushner do whatever the heck it is Jared Kushner has been doing. None of these men are likely to bring much in the way of economic insight, nor is it clear that any of them would be an effective counterweight to protectionists like Navarro, who will likely be sticking around the White House regardless. Kudlow’s being in the administration, on the other hand, might lessen the probability that the country will stumble headlong into the trade war Trump seems to want in his heart. Worst comes to worst, he probably won’t do much additional harm, which is really the best we can hope for.

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