How successful is Larry Kudlow as Donald Trump’s top economic advisor?
It’s hard to say.
Until now, when he’s in China along with other US officials, Mr Kudlow has made headlines for something that wasn’t strictly about the economy. (Oh ok, Russian sanctions are about the economy and politics, but not strictly about the economy).
Anyway, Mr Kudlow made so bold as to say UN envoy Nikki Haley must have been “momentarily confused” to announce further sanctions on Russia. This prompted her to icily and publicly hit back: “With all due respect, I don’t get confused.” The episode cast an unflattering light on the Trump administration.
So, how good is Mr Kudlow as the President’s economic advisor? On his watch, Mr Trump attempted a U-turn on the Trans-Pacific Partnership deal. Mr Trump has expressed enthusiasm for a trade war with China and claimed that such conflicts are “easy” to win.
But it was the US president’s choice for the new head the National Economic Council that illustrated the extent of the troubles facing the American-renewal project.
To pick Mr Kudlow, a TV pundit, as replacement for Gary Cohn, the former head of Goldman Sachs was outrageous enough. (Mr Cohn may have justifiably felt both angry and humiliated.)
But to pick a TV pundit who has no other economic beliefs but low taxes (especially for the rich) is a serious problem.
Low taxes, as Jonathan Chait has pointed out, has become almost a “theological” preference for the US Republican Party. This belief, he writes, is “unique among right-of-center parties in the industrialized world. Republicans oppose higher taxes everywhere and always, at every level of government. In 2012, every Republican presidential candidate, including moderate Jon Huntsman, indicated they would oppose accepting even a dollar of higher taxes in return for $10 dollars of spending cuts. They likewise believe tax cuts are the necessary tonic for every economic circumstance.”
This militates against the general view of what the American people want. Not the view of economists but ordinary people, the people who elected Donald Trump, hoping for a hand up and a chance to work and grow and build and thrive.
Consider the findings of a Reuters/Ipsos poll conducted from September 29 to October 5, which found that 53 per cent of American adults “strongly agree” that the wealthiest Americans should pay higher tax rates.
An additional 23 per cent “somewhat agree” the wealthiest should pay higher tax rates, according to the poll of 1,504 people.
Accordingly, as Noah Smith, formerly assistant professor of finance at Stony Brook University, has pointed out, large majorities of Americans want something that’s exactly the opposite of Mr Trump’s new economic adviser Larry Kudlow preferences. Mr Smith write that “Infrastructure investment is popular too, as are minimum wage hikes and a variety of antipoverty programs. In other words, an agenda that looks more like that of the Democrats than the GOP. People want more government help for the poor, the working class and the middle class. They want government investment in productive infrastructure. And they want the rich to pay for more of that stuff than they now do.”
It is for this reason, even more than Mr Trump’s ignorance, vulgarity, immorality and defiance of norms, that his stewardship of the US is deeply troubling.
So is Mr Kudlow likely to be an asset in his current job? Hard to say, but at the moment, it seems most unlikely.🔷