Larry Kudlow, Director of the National Economic Council, is a "Reagan supply-sider" who enthusiastically advocates for tax cuts and deregulation. He said recently that there will be no recession in the near future.
Considering the man’s track record, we should be very afraid.
- In 1993, Kudlow predicted that Bill Clinton's tax increases would hurt economic growth. He was wrong.
- In the Bush II administration, Kudlow predicted that Bush’s huge tax cuts for the wealthy would lead to an economic boom equal to the boom under Clinton. He was wrong again.
- In 2001, Kudlow predicted that Bush’s tax cuts would create even bigger budget surpluses. Instead, we got deficits. Wrong again, Larry!
- In June of 2002, Kudlow wrote that Saddam Hussein had "weapons of mass destruction” and called for an invasion of Iraq. Kudlow wrote that "a lack of decisive follow-through in the global war on terrorism is the single biggest problem facing the stock market and the nation today". Jeebus, Larry, you were wrong in ways that are hard to describe!
- In December of 2007, with home prices in free-fall and CDO’s tanking, Kudlow wrote: "The recession debate is over. It's not gonna happen.” Boy, was he ever wrong.
- February of 2008, one month before Bear Stearns collapsed, he said that the economy would rebound that summer, “if not sooner.” Jeebus, Larry, get a clue.
- In July of 2008, Kudlow denied again that the economy was headed for recession. He wrote that "We are in a mental recession, not an actual recession." Yup, wrong again.
- In 2008, after the recession had already begun, Kudlow said, “Recessions are therapeutic.”
- In 2016, Kudlow endorsed Donald Trump.
- In June of 2018, after Trump’s tax cut for the rich, Kudlow predicted that "capital investment, you know, for new jobs and better careers, [is] flowing in from all corners of the world". Direct foreign investment, however, declined 35% in the first quarter after the tax cut.
And now THIS:
www.vanityfair.com/...
Speaking to reporters outside the White House, the former Reagan associate budget director told reporters, “I’m reading some of the weirdest stuff [about] how a recession is right around the corner—NONSENSE. My personal view? Our administration’s view? Recession is so far in the distance I can’t see it.”
Unfortunately, that’s not the view of people who don’t have a long, mortifying history of almost never being right. Rather, economists polled by The Wall Street Journal agree that a downturn is coming, likely in 2020, with economist Peter Schiff warning it’ll be “worse than the Great Depression.”
In addition to dismissing such forecasts as total poppycock, Kudlow—who is not a trained economist—essentially said that Goldman Sachs’s recent conclusion that economic growth will “slow significantly” in 2019 was the work of a bunch of socialist hacks.
“My colleague, Kevin Hassett, had some choice words for Goldman Sachs and their partisan forecast,” Kudlow told Fox Business’s Stuart Varney. “But I’m such a nice guy I’m not even going to go there, Stu.” (Last month, Hassett claimed that the bank was working for the “Democratic opposition” because it estimated that a 25 percent tariff on Chinese imports could wipe out earnings growth for S&P 500 companies next year.)
So we should be afraid — very afraid!
Goldman Sachs is a bunch of socialists… Where does the ruling class find these hacks?
Part of our peril is the result of the corporate debt bubble that is driving up stock prices. The Bush/Obama plan to rescue the banks left us with fewer, richer, and more powerful bank holding companies that could only survive with a constant flow of cheap money. Since 2008, the Federal Reserve has tried to rescue the banks by keeping interest rates low. The result was that corporations could borrow at low interest and buy back their stock. Big corporations now have huge debts and high stock prices. This bubble dwarfs the previous episodes of “irrational exuberance.”
Behold, gentle readers, the OMG Corporate Debt Bubble:
What goes up...
I strongly recommend the blog Calculated Risk. The author was one of the few business bloggers to correctly predict the bursting to the real estate bubble in 2006 and the beginning of the recession in 2007.
www.calculatedriskblog.com/…
Note: This diary is not meant to be financial advice. Talk to a real professional. On the other hand, maybe not.
From the great Nick Anderson of the Houston Chronicle in 2008
