President Donald Trump will reportedly name Larry Kudlow head of the National Economic Council. For fans of pro-growth policies — deregulation, low taxation and open trade — it’s great news for obvious reasons. Kudlow has been a decades’ long champion of these ideas and those with coherent philosophies tend to offer some stability and continuity. This administration could use more of those things, not less.
Kudlow is also a noticeable upgrade over the outgoing Gary Cohn, not only because the former has been a far more consistent voice for free markets — Cohn’s support of carbon tax and a VAT tax, and his rumored moderating disposition on tax reform were all worrisome clues — but because the former TV host and syndicated columnist is better equipped to sell those ideas to the public and lawmakers.
Kudlow, it’s been reported, also played a role in persuading senators to support tax reform despite the intense political opposition and hysterical warnings about the bill’s homicidal intent and supposed enduring unpopularity. Kudlow’s problem with the Trump tax bill was that it wasn’t cut enough on the individual side.
Of course, the hardest sell might be the president himself. “We don’t agree on everything, but in this case I think that’s good,” Trump said of Kudlow this week. “I want to have different opinions. We agree on most. He now has come around to believing in tariffs as a negotiating point.” Trump hired Kudlow even though only last week he co-wrote a piece for National Review arguing that imposing tariffs on steel and aluminum imports was tantamount to imposing sanctions on your own country — “a crisis of logic.” Kudlow, a former White House budget aide for Ronald Reagan, has long held positions on NAFTA and trade in general that are diametrically opposed to the president’s. Which undermines the idea that Trump is rigidly opposed to any dissent within the administration.
And if tariffs are, indeed, merely a “negotiating point,” that’s good news.
But while Kudlow immediately restores some balance in a White House that’s picked up the protectionist rhetoric lately, it’s highly unlikely that the propelling idea of Trump’s electoral success will be shelved simply because the president tapped a new adviser, no matter how convincing or compelling his arguments might be. It’s worth considering, however, that Kudlow might mitigate some of the worst inclinations of the protectionist wing. Certainly his presence doesn’t hurt.
Tariffs, though important, aren’t everything. And on most issues, Trump has displayed a surprisingly traditional fiscal conservatism. Cohn, it seems, would have been much more liable to push Trump towards yielding on economic issues for a deal.
The hardest hit by the news have been liberal pundits who are, despite all the talk of the Trumpocalypse, far more predisposed to be fans of the president’s big government inclinations than that of old-school fiscal conservatism. Many liberal columnists have already lined up to point out that Kudlow has made some bad predictions in the past. It’s worth remembering that this puts him on par with just about every other economist who’s ever appeared on TV or written a column or worked for government. Kudlow’s rosy predictions seem predicated on an optimistic view that fails to consider the unpredictability of markets and the unpredictability of world events. Economists, all of them, should stop trying to be seers.
But the idea that a failure to forecast a recession should disqualify anyone who’s been right about the big ideas from a job Washington seems to be one reserved exclusively for fiscal conservatives. And watching the agitated reaction from proponents of high taxes and highly regulated, top-down economics — like Jonathan Chait or Paul Krugman, for instance — should imbue conservatives with optimism that Trump has made the right choice.