Talking head Larry Kudlow, who failed to see The Great Recession as it happened in front of him, is Trump’s chief economic advisor.
The Dow Jones Industrial Average, already down 250 points on the day due to fears of a trade war stoked by Trump’s steel and aluminum tariffs, traded down a further 34 points on the news Kudlow would head the National Economic Council (NEC), echoing reactions on Monday when it was reported Kudlow was Trump’s favorite for the position.
“Dow ends lower amid report that Kudlow will interview as possible Cohn replacement,” was a headline from Monday.
MarketWatch’s Mark Decambre went on to report the specifics in his lede regarding immediate market reaction Monday to reports that Trump was leaning towards hiring CNBC TV personality Larry Kudlow to replace Gary Cohn, who resigned Friday as the administration’s chief economic advisor over Trump’s decision to place tariffs on imports like steel and aluminum:
“U.S. stocks finished firmly lower on Monday, with the Dow down about 160 points, amid reports suggesting that CNBC contributor Larry Kudlow was the leading contender to replace Gary Cohn, who resigned as chief economic advisor to President Donald Trump and his director of the National Economic Council last week.”
The core of the reason for such market trepidation over Kudlow taking the helm of the NEC stems from the fact that he missed the biggest call of his lifetime back in December 2007, when Kudlow not only failed to see The Great Recession as it was overtaking him and all of us, but that even when the fact of the recession had become obvious and factual, he refused to buy the truth.
That the mention of Kudlow’s name made the markets insecure results from other legitimate investor jitters over Trump tapping him as NEC head: His underlying makeup. Namely, he’s a partisan TV “analyst” not a practicing economist. And as such, Kudlow embodies the untrustworthy and dangerous combination of an ideologue allergic to economic facts and data whenever they contradict his political biases or stray from his armchair supply-side musings, with the delusional overconfidence and broadcast-induced psychosis endemic to loudmouth TV commentators freed to criticize everything yet solve nothing.
Here’s Reagan’s former Director of the Office of Management and Budget (OMB), David Stockman, discussing on Monday the confidence-sapping effect of Kudlow, Stockman’s former underling at OMB, advising Trump:
He would be “exactly the wrong voice” to bring Trump back from “off the deep end” of economic policy, Stockman told CNBC’s “Fast Money Halftime Report,” because Kudlow’s essentially a “Wall Street cheerleader.”
Monday and today then must have been bittersweet for “Kuddles,” as he’s affectionately referred to by at least one old friend, especially for a man who once said, “If stocks are optimistic, then so am I,” as he watched the market sink on news he landed an economics job.