On Friday morning, Larry Kudlow made the TV rounds to extoll the virtues of Trump-o-nomics following a blistering November jobs report that made a mockery of estimates (and ADP).
Admittedly, we’ve grown weary of crafting Kudlow satire. Larry isn’t an economist, which makes it especially frustrating to listen as he pretends to be one and as the networks indulge that fantasy.
And that’s not to say you have to respect (or even like) economists. I don’t like psychiatrists, for example, but I recognize that they have different training than psychologists. Anyone who knows me is aware of my extreme aversion to what I believe is an epidemic of over-prescribing antidepressants based on possibly spurious science, but if I knew someone for whom I thought the benefits of antidepressants clearly outweighed the risks, I damn sure wouldn’t want to discover that a local psychologist was masquerading as a psychiatrist and handing out pills to patients.
That’s probably how America should think about people like Larry Kudlow and Stephen Moore and, yes, Jerome Powell (although obviously, Powell-to-Kudlow is something of an apples to oranges comparison). Sure, those people know something about economics, and because economics is extremely fallible and subject to malpractice especially by those who possess PhDs in it, there’s a sense in which hearing from Kudlow or Moore or Powell is just as good as hearing from Janet Yellen.
But only up to a certain point and only when you haven’t already discounted the notion that economics is part bullsh*t. Once you admit that latter bit, and thereby dispense which the customary criticism of the discipline itself, the chasm between the Yellens and the Kudlows is as plain as the nose on your face.
An economist isn’t a rocket scientist just like a psychiatrist isn’t a brain surgeon, but both the economist and the psychiatrist know something about their respective fields that people with undergraduate degrees and Master’s degrees in business (in the case of the economist) and PhDs in psychology (in the case fo the psychiatrist) don’t know. How valuable that something is is debatable, but it’s presumably worth something, and whatever it’s worth in the case of the economist, the market misses the hell out of it every, single time Jerome Powell steps to the podium after a Fed meeting and every, single NFP Friday that Kudlow materializes on television.
With that in mind, let’s briefly run through what Larry had to say on Friday during a string of predictably cartoonish cameos.
Starting at the top of the headlines as they appeared on my screen, Kudlow described the jobs report as “showing very big numbers”, which is a kind of case in point when it comes to why Larry is no Ben Bernanke.
Speaking of Fed folk, Kudlow said the Fed was “way too tight” in 2018, but has since taken its “foot off the brake”.
Obviously, the trade discussion is all anyone really wanted to hear about, though, and at least during his chat with Bloomberg’s Jonathan Ferro (who isn’t an easy interview if you’re prone to lying, as Kudlow is), Larry was non-committal. Soundbites from his other various exchanges were broadly similar.
The US and China are “very close” to a deal, but there are a “few buttons that have to be buttoned”, he told CNBC.
Kudlow said the two sides are in “almost daily” contact, echoing remarks from China’s Gao Feng. He also emphasized that December 15 (the self-imposed deadline for an agreement that averts another escalation) is a “very important date for tariffs”.
That’s an absurd thing to say – like: “October 31 is a very important day for Halloween”. Only it’s actually even sillier than that because December 15 isn’t some nationally recognized “tariff day”, it’s just a deadline that the administration made up.
Trump “basically likes what he sees in the trade talks”, Kudlow went on to muse, adding that “no single condition” will make or break the discussions. There are no plans for Trump and Xi to meet at present. The US, he said, “appreciates” the tariff waivers that open the door for Chinese buyers to keep purchasing US farm products until levies are rolled back.
As far as the Hong Kong situation goes, Larry doesn’t think that’s going to affect the trade talks, even though it clearly already has.
Again, the important thing to emphasize is that Larry was either unsure of whether it makes sense to be optimistic, or else just scared to death of saying something definitive only to be immediately contradicted in an afternoon tweet.
“[Trump is a] tough, canny, wily negotiator”, he told Bloomberg. “[But] I don’t want to predict what his decision will be and I don’t want to mislead anybody”.
It’s too late on that latter bit, Larry. Far, far too late.
What better judge of canny and wily than Larry?
Larry is an idiot fool but Bernanke presided over an “inflation” problem (partly caused by HFs), a housing bubble, and totally missed the contagion risk. Bernanke kept raising rates to stop the “inflation” (and nearly caused us to see deflation) and totally misjudged the sub-prime risks saying they were contained. Some real world experience rather than ivory tower beliefs would have helped. Greenspan was not much better blowing bubbles and setting to stage for the GFC. How Bernanke escaped with his reputation intact is mind boggling. He must have trump blood in him…………….