Larry Kudlow, a television commentator, Washington insider, Wall Street veteran, and a supply-side economics evangelist, is now officially the latest addition to the Trump White House.
His new gig as the director of the National Economic Council is but another chapter in his encyclopedic resume that is a testament to this septuagenarian’s varied career. Today, Kudlow is a household name, especially in economically conservative circles and in the world of business reporting.
His appointment to the position should come as little surprise to people who closely follow the administration. He was rumored to be the pick prior to Gary Cohn’s appointment, and Cohn’s disapproval of Trump’s sudden rollout of punitive tariffs, and subsequent resignation, cleared the way for Kudlow’s ascent.
{mosads}At first glance, it’s obvious that the president and Kudlow are professionally and personally simpatico. Just like Donald Trump, Kudlow also has been through several personal rebrands where he completely overhauled his politics and positions in the process, evolving with the times to successfully navigate the scene in both Washington and New York alike.
There’s one major problem that Kudlow faces in his new job at the White House: As far we can tell, he is on the same page as Cohn when it comes to free trade. In fact, he publicly condemned Trump’s tariffs as a tax-in-disguise on the American economy when they were first announced (he later walked his criticism back).
Naturally, the free marketeers of the political scene are over the moon about having another dedicated free-trade advocate talking directly into the president’s ear. Of course, we can expect some turbulence ahead as trade debates continue to consume the White House. In the end, Kudlow will either have to toe the line with the administration or face a head-on collision with its official stance, just like his predecessor did.
For many longtime observers, an about-face on free-trade enthusiasm would be a dramatic departure from Kudlow’s long-held beliefs. Kudlow’s credentials leave little to the imagination regarding his economic worldview, as the man who is now the highest level economic advisor in the land literally worked for Arthur Laffer.
Laffer, the face of supply-side economics who rose to national fame after drawing his eponymous curve on a napkin for Dick Cheney and Donald Rumsfeld, continues to wield an enormous influence on conservative economic thought. Implicit in this school of thought is a stalwart defense of free trade that characterizes tariffs as a tax. This is in addition to the centerpiece of this ideology emphasizing that tax cuts pay for themselves through increased economic growth.
This philosophy is alive and well today, as we’ve seen with the recent tax overhaul that has produced eye-popping fiscal deficits for our federal government. This is where Kudlow’s and Trump’s ideologies overlap significantly and render him a neat fit for the role.
There are, however, unresolved questions about Kudlow’s views that will be tested in his new role. The progressives of the world like to point out Kudlow’s disdain for Keynesian economics, something that is somewhat incongruent with a presidency that’s enjoying the spoils of post- recession quantitative easing.
This administration also has made crystal clear that significant fiscal stimulus in the form of an infrastructure overhaul is in the cards. That might be somewhat problematic for Kudlow, an ardent supporter of a small, hands-off approach to government that would make William Buckley proud from beyond the grave.This is just one point of contention that might be problematic for his tenure, as he’s also publicly distanced himself from Trump on issues other than tariffs.
Even if he can avoid clashes with his new boss, there are other clear challenges that Kudlow will face during his tenure. Like anyone who has been in the public arena for decades, there are both brilliant successes and notable blemishes on his record. Critics will be quick to point out that Kudlow’s failure to predict the Great Recession was alarming. Given that our post-recession recovery is becoming a bit long-in-the-tooth, turning a blind eye to recessionary indicators would lead to disastrous outcomes.
All-in-all, Kudlow is uniquely qualified for the role, but steering the world’s largest economy amidst the Trump revolution is a monumental challenge. There is little doubt Kudlow will be part of making the pivotal policy decisions that chart our economic trajectory and spell out how this administration will weather potential economic storms. In a blink of an eye, something can derail our bright economic prospects, and making the right calls in those critical moments won’t be easy by any stretch of the imagination.
David Grasso is the anchor of Bold Business, a digital television show about millennial economic empowerment. He has worked as an investigative reporter for Telemundo and ABC local affiliates in Florida and Texas and he holds a Master of Public Policy from the Harvard Kennedy School.