Here’s Why It’s Important To Call Out Larry Kudlow For The Thousandth Time

I tire quickly of wasting time and space telling the same joke over and over again.

If the punchline is obvious, it’s probably not a joke that’s worth telling more than once, unless your sole purpose for existing as a satirical web portal is to generate clicks by recycling content.

With that caveat/disclaimer out of the way, it’s hard to ignore the Trump administration’s penchant for demanding rate cuts while simultaneously rolling out the superlatives to describe the economy.

The advance read on Q1 GDP blew away estimates on Friday and while the internals were not particularly inspiring, a simple read is that talking about rate cuts right now isn’t just premature, it’s nonsensical.

But just watch as Larry Kudlow not only anticipates that argument, but actually preempts the question by bringing up rate cuts before Faber even asks him about the contradiction.

That, frankly, is unfiltered propaganda. Kudlow doesn’t even try to present it as anything other than economic agitprop. He quite literally uses the “yada, yada” cadence when he says “…the Fed is independent, that’s just my own view”. Watch that part slowed down:

Again, that is literally the “yada, yada, yada” cadence. He might as well have just said “…of course I have to say that the Fed is independent, but we all know the president doesn’t accept that, which means he’s going to get his rate cuts one way or another, even if he has to install Krusty the Clown at the helm by executive order, and yada, yada, yada.”

Why is this joke worth telling again? Not because it’s funny. In fact, the reason this joke is worth retelling is precisely because it isn’t funny.

The fact that the administration is willing to parrot a narrative as inconsistent as this one, says something about how audacious Trump has become vis-à-vis his efforts to make good on campaign promises tied to the resurrection of what he claims was a dead economy.

It was a foregone conclusion that Trump would push for fiscal stimulus irrespective of where we are in the cycle (he’s a populist, and he’s notoriously moronic). It was also a foregone conclusion that he would fund that stimulus push with debt (he’s the self-declared “king of debt”, after all). And it was preordained that stimulus would, at least in part, take the form of tax cuts for corporations and the wealthy (he claims to be a Republican and he is himself wealthy).

What wasn’t necessarily predetermined, though, was a full-on push into autocratic territory, where that means mashing the gas on fiscal stimulus while simultaneously demanding rate cuts and pro-cyclical monetary policy. That kind of banana-republic-esque approach took time to develop. I would argue that Trump needed to wear down the public’s defenses first in order for his attacks on the central bank to be tolerated.

Over the course of his presidency, Trump has pushed the envelope further and further when it comes to eroding the independence of critical institutions. He constantly tests the boundaries, in the process numbing the public to the sheer audacity inherent in some of his antics. After receiving little to no pushback, he’s proceeded to dismantle those institutions.

If you go back to July and August of last year and read some of the commentary from, for instance, Bloomberg columnists and opinion writers, you’ll find innumerable allusions to what Trump “can” and “can’t” say or do about the Fed. By the end of December, Bloomberg and other mainstream outlets were running stories documenting discussions Trump reportedly had with aides and advisors about firing Powell and even Steve Mnuchin.

Read our warning from August

Do Not Underestimate Donald Trump When It Comes To The Fed

At no time that I’m aware of did anyone at any major news outlet acknowledge the fact that just five months previous, virtually nobody was even willing to entertain the idea that Trump would end up lambasting the Fed on a weekly (and sometimes daily) basis on the way to seriously contemplating moving against the head of the central bank. There was never, as far as I know, a “Wow, look how far gone we are” moment for the media.

That is indicative of how autocracies take hold. Over time, a would-be authoritarian simply wears the public down and before anyone realizes it, what was once considered outlandish, is just par for the course. “So what? That’s what he does”, becomes the fatalistic refrain.

But how can this be accepted as par for the course? How is it that we’ve gotten to a point where nobody at any of the mainstream financial media outlets seems willing to call this what it is: A manifestation of Trump’s success at transforming America into an authoritarian state.

First, he piled unnecessary stimulus atop a late-cycle economy despite warnings that the decision was ill-advised, especially considering the push was debt-financed. That stimulus involved tax cuts which, by some accounts, personally enriched his family to the tune of $1 billion. Since then, he’s demanded rate cuts and deficit financing from the Fed; sought to install loyalists on the Fed board, neither of whom are any semblance of qualified; explored the possibility of demoting his Fed chair; castigated the central bank in public on too many occasions to count. And all as the economy continues to hum along, a few hiccups notwithstanding.

Left unchecked, this will not stop. Trump and Kudlow and Pence will continue to demand rate cuts and easing no matter how hot the economy runs. And if that’s what they’re doing now, imagine what they’ll say if/when the economy does falter – especially considering the proximity to the election.

At what point is anyone going to step up and challenge this? Apparently, the answer is “never” and it’s not hard to discern why. It’s because no financial journalists want to risk finding themselves labeled “enemy of the people” in the president’s Twitter feed.

Best to leave the real journalism to real journalists like Maggie Haberman, I suppose.