Some economists get reputations for always being wrong. Such a reputation afflicts Arthur Laffer, inventor of the Laffer Curve, which shows how lowering tax rates leads to higher revenues for government because of the economic renaissance which follows such changes. Except … it doesn’t happen. Government finds itself in a financial bind.
Steve Benen suggests Trump’s new economic advisor, economist and TV commentator Larry Kudlow, is another economist with a bad reputation:
In political circles, the Weekly Standard’s Bill Kristol is known for a few things. He was former Vice President Dan Quayle’s chief of staff; he’s one of the more influential Republicans in the D.C. media; he’s a notable critic of Donald Trump; and he has an unfortunate habit of making predictions that don’t come true.
Larry Kudlow is similar, except instead of always being wrong about political developments, Kudlow is always wrong about the economy. And while that’s an unfortunate track record for someone who pontificates about the economy on television – Kudlow is a longtime CNBC anchor – it’s an even worse trait for someone who leads the White House’s National Economic Council.
And yet, that’s the job Donald Trump tapped Kudlow for this week.
It’s an interesting thought – Trump guided by someone he likes and trusts, who unfortunately gets it all wrong. Will it continue? And how long will he last, being wrong all the time? Here’s one of his earliest pronouncements, regarding the imminent, threatened trade war, via Reuters:
The official Xinhua news agency said late on Wednesday that the U.S. tariffs proposal would cost the United States “dearly”.
“China will not be afraid or back down if a trade war is unavoidable. The country has never surrendered to external pressure, and it will not surrender this time either,” Xinhua said.
The apparent determination not to retreat is at the polar opposite of comments by White House National Economic Council Director Larry Kudlow, who told Fox News Channel on Wednesday: “I believe that the Chinese will back down and will play ball.”
I’ll try to remember to keep an eye out for results as well as other prognostications by Mr. Kudlow. For the sake of our farmers, I hope he has this one right.
