Larry Kudlow: Trickle Downer of the Week
If we needed a clearer signal that Donald Trump’s administration will go all in for amped-up trickle-down economics—that is, tax cuts for the rich, deregulation for the corporations, and wage suppression for everyone else—consider that the president-elect is likely to tap Larry Kudlow to chair his White House Council of Economic Advisers.
For those who aren’t familiar with him, Kudlow is a prolific cable news commentator who has a stellar reputation for being wrong—a lot. Like, a lot a lot. Given that he has no formal education in economics, Kudlow also neatly fits Trump’s preference for putting “unconventional” people (i.e., he sees them frequently on cable news) to top White House posts. As David Dayen aptly puts it in The Nation, “Kudlow isn’t an economist, but he plays one on TV.”
To put a sharper point on it, he plays a trickle-down economist on TV. As a ubiquitous talking head, Kudlow is one of the most prominent purveyors of supply-side dogma, to which he became a devout adherent while serving in the Reagan White House. No matter the economic problem, it can be solved, Kudlow promises, by cutting taxes for the wealthy and corporations.
As Jonathan Chait outlines at New York magazine, Kudlow has long been a reliable alarmist whenever policy strays from his narrow frame of orthodox right-wing economics. When Bill Clinton increased the top tax rate in 1993, Kudlow predicted that it would “throw a wet blanket over the recovery and depress the economy’s long-run potential to grow.” When a prolonged economic boom followed, Kudlow didn’t repent; he insisted that the long tail of Reaganomics was to thank. “The politician most responsible for laying the groundwork for this prosperous era is not Bill Clinton, but Ronald Reagan,” he wrote in 2000. When the economy slowed, of course it wasn’t Reagan’s fault; it was Clinton’s “tax burdens, high interest rates and re-regulation.”
Kudlow then promptly became one of the biggest boosters of the George W. Bush economic plan, including support for its two massive tax cuts for the rich and its invasion of Iraq, which he predicted would turbocharge the stock market. Later, he chastised those who warned about a coming housing bubble in the mid-2000s as “bubbleheads.”
When the economy was on the verge of tanking in late 2007, Kudlow said that couldn’t happen under a reliable trickle-downer like Bush. The man who Trump wants to make his chief economic adviser stated plainly, “The recession debate is over. It’s not gonna happen. Time to move on. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). The Bush boom is alive and well. It’s finishing up its sixth splendid year with many more years to come.” All recession concerns were just so much “doom and gloom from the economic pessimistas.”
Once the recession became undeniable, Kudlow wrote it off as "a mild correction" at worst. He then kept insisting that the economy had reached rock bottom even as it kept plummeting. Clearly on a roll, he went on to wrongly predict an “inflationary bubble” blowing up from President Barack Obama’s stimulus, and credited the Obama-led economic recovery to the legacy of Bush’s tax cuts. In 2012, along with Trump advisers Stephen Moore and Arthur Laffer, Kudlow counseled Kansas Governor Sam Brownback on his plan to implement massive tax cuts for the rich, which led to catastrophe for the state’s economy.
Kudlow is so often—and so unapologetically—wrong because he faithfully propounds an economic doctrine that has no basis in reality, but rather serves as a flimsy excuse for hoarding wealth at the top. Now, he is primed to be a key adviser in implementing a tax plan that will, once again, deliver huge cuts to the rich under the guise that they will use the extra income to spur investment, thereby creating jobs for everyone else. “[Trump’s] tax-cut program will really put a booster rocket underneath this economy. The top people in the administration are all there to push that—that’s why I like them,” Kudlow told The Wall Street Journal.
In the real world, things haven’t worked out that way. Tax-cutting (on the rich) Republican presidencies have consistently created fewer jobs than tax-hiking (on the rich) Democratic presidencies. The postwar decades of broadly shared prosperity also saw the highest marginal tax rates on the wealthy.
If chosen, Kudlow will join like-minded fanatics like Treasury Secretary-designate Steven Mnuchin, who helped craft candidate Trump’s proposed giveaways to the uppermost tax brackets, and House Speaker Paul Ryan, who is gearing up to ram his trickle-down tax plan—marketed as a “Better Way” with fewer brackets—through Congress in the Republican’s coming budget reconciliation scheme.
While Trump poses as a political renegade, the economic ideologues he is surrounding himself with indicate that his top priorities will be tax cuts and deregulation—the traditional trickle-down Republican agenda.
And you can count on Kudlow, our Trickle Downer of the week, to blame the coming calamities of trickle-down economics on Obama.