Predictably, Larry Kudlow and Peter Navarro were hastily dispatched to make the TV rounds on Friday morning on the heels of the strong June jobs report.
There was a time when the administration’s efforts to argue for rate cuts while simultaneously singing the praises of the MAGA economy prompted indignant rejoinders from those who saw the charade for exactly what it was: An almost textbook case of authoritarian-style economic mismanagement, characterized by an insistence on rate cuts alongside pro-cyclical fiscal policy.
At this point, though, incredulity and righteous indignation has given way to derisive scoffing. Kudlow is now indistinguishable from the likes of Sean Hannity, Lou Dobbs and Rudy Giuliani.
Larry was always something of a joke (a supply-side sock puppet, forever nostalgic for a time when he was marginally relevant), but now he’s just a sad sycophant who has decided it’s too late to turn back. Like Dobbs and Giuliani, Kudlow’s legacy will now be defined by Trump, with everything else relegated to a footnote.
Following the jobs blowout, Kudlow made the obligatory appearance on Bloomberg TV to insist that rate cuts are still necessary despite the US “killing it on the economy” (as he put it earlier this year, in a truly sad propaganda message clearly designed to mimic rap videos).
“[The Fed should] take back the rate hike”, Kudlow told Bloomberg, parroting fellow groveling moron Stephen Moore. Next, Kudlow insulted everyone’s intelligence by telling Jonathan Ferro that despite having just implored the Fed to cut rates, the administration is “not encroaching on Fed independence” but rather “reading the market tea leaves”.
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What Kudlow the tasseographer fails to mention is that the “tea leaves” are influenced by Trump in a multitude of ways. Trade escalations forced the market to price in rate cuts and the drag on global growth exerted by the trade frictions has pushed down global bond yields. In other words, Trump has played a large role in engineering a growth scare.
When you throw in his constant badgering of Jerome Powell, you end up with a bond market that is just a reflection of things Trump has done and said.
After proselytizing on Bloomberg, Larry promptly showed up on CNBC, where he pitched his old colleagues the same spiel. “[Inflation is] way below the Fed’s target and what most people want and that’s the reason they should take back the interest rate hike”, he said. “With a weak global economy taking out an insurance policy is not a bad thing…I just don’t want anything to interfere with this strong prosperity cycle”.
That’s a joke. What he really means is: “The president doesn’t want anything to interfere with this election cycle”.
Again, what Larry leaves out is Trump’s role in perpetuating weakness in the global economy. Trump shielded the US from the downturn abroad with debt-funded, deficit-ballooning fiscal stimulus, and then, when the sugar high started to wear off, he started demanding rate cuts when the unemployment rate is parked at a five-decade low.
Make no mistake, it’s just a happy coincidence that inflation is subdued. Trump wouldn’t care if it was accelerating sharply – he’d still be demanding rate cuts and Kudlow would be right there with him because, let’s face it, what else does Larry have at this point in his career?
Meanwhile, Peter Navarro told CNN the same thing, and that wasn’t all he said. Peter also talked about Trump’s Fourth of July celebration and just generally pandered to the president in a manner so obsequious that you almost feel sorry for him, until you remember he’s Peter Navarro.
There is no sense in which any of this can be taken seriously anymore. It is pure, unadulterated propaganda. By entertaining it, CNN, Bloomberg and CNBC are becoming extensions of Fox, which, at this point, is just an American Pravda.
On July 4, Fox’s Dobbs called America’s decorated generals “snowflakes” for not supporting Trump’s farcical military spectacle. At the event, Trump proved just how much he really respects America’s history by bumbling a speech he didn’t write. Among at least a half-dozen gaffes, Trump claimed George Washington captured British “airports” during the Revolutionary War.
Kudlow spoke to Fox on Friday morning as well. His pitch was indistinguishable from that aired by the other networks.
I wonder if Xi knows that he could control the coming US election. And, if so, will somehow fail to support Trump’s maneuvering such that it won’t quite come together in time??
By selling treasuries, right? Someone explain why China hasn’t started to do this? B/c it would lead to a full-on trade war that would hurt both countries (and the global economy) but undoubtedly would cost Xi his job (and freedom and maybe his head)?
nah. because it would risk triggering a global meltdown on par with what happened in late August 2015 (and continued, at various intervals, through February 2016). the risk-off mood/flight to safety would probably drive other people straight into Treasurys, thus offsetting the upward pressure on US borrowing costs. although China’s holdings recently dropped to a two-year low, there really isn’t anywhere else for them to park money. they can try to diversify to Euros, but there is no market as deep as the UST market. also, actively selling USTs would mean shooting themselves in the foot, as they would be putting selling pressure on something they still own a ton of.
Count on it.
I was thinking more along the lines of managing the ‘Tariffs’ and trade. Maybe letting the world’s economy sag just enough to ensure Trump’s defeat but enough support to Europe, Australia, South America to keep their hopes up and get them through to a post-Trump period??
I’m not sure it works like that…