Donald Trump Turns to Always-Wrong Pseudo-Economist Lawrence Kudlow

[DonViejo]

By Jonathan Chait

December 18, 2016
8:53 p.m.

Distasteful or even alarming though he may be, Donald Trump has presented a tantalizing possibility of a Republican who would take “a wrecking ball to many of his adopted party’s orthodoxies, proposing a vision of right-wing politics far more mercantilist, nationalist and statist than anything we’ve seen from the post-Reagan, post-Goldwater G.O.P.,” as Ross Douthat, among many others, put it. But the emerging cast in Trump’s administration, from the appointment of Tom Price to run the Department of Health and Human Services to the slew of bankers and other millionaires, suggests something different: On domestic policy, he has not wrecked his party’s domestic platform, but continued and even intensified it. And the single most emblematic development is the report that Lawrence Kudlow is the leading candidate to run his Council of Economic Advisers.

The CEA chair is typically an economist. Kudlow is not, a fact on his résumé that qualifies rather than disqualifies him for his job. Kudlow is a fanatical adherent of supply-side economics. While many conservative economists believe that, all things being equal, lower tax rates can produce faster growth, Kudlow believes it with a religious intensity. No serious body of economic work could substantiate his beliefs. Indeed, even hard-core conservatives in academia — like Greg Mankiw, a Republican economist with a deep moral disdain for progressive taxation — have nonetheless described the arguments used by Kudlow as those of “charlatans and cranks.” And yet his views have come to dominate the Republicans Party despite decades of unremitting failure. What is remarkable about Kudlow is not just how flamboyantly and demonstrably wrong he has been, but that his influence over the Republican agenda has actually increased.

Kudlow’s core doctrine is that upper-bracket tax rates are the primary driver of economic growth, and that even minor changes in the level of taxation on the rich have enormous consequences on growth. In 1993, when Bill Clinton proposed an increase in the top tax rate from 31% to 39.6%, Kudlow wrote, “There is no question that Presdient Clinton’s across-the-board tax increases…will throw a wet blanket over the recovery and depress the economy’s long-run potential to grow.” This was wrong. Instead a boom ensued. Rather than question his analysis, Kudlow switched to crediting the results to the great tax-cutter, Ronald Reagan. “The politician most responsible for laying the groundwork for this prosperous era is not Bill Clinton, but Ronald Reagan,” he argued in February, 2000.

By December 2000, the expansion had begun to slow. What had happened? According to Kudlow, it meant Reagan’s tax-cutting genius was no longer responsible for the economy’s performance. “The Clinton policies of rising tax burdens, high interest rates and re-regulation is responsible for the sinking stock market and the slumping economy,” he mourned, though no taxes or re-regulation had taken place since he had credited Reagan for the boom earlier that same year.

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[Angry Dragon]

1. ass

[JHan]

2. He's an idiot, is always wrong about most things.

One of Larry's greatest hits from the National Review -

"But these are just more words in this global and just war on terror. The president must now execute and follow-through in support of these fine principles. There can be no hesitation. In dealing with Israel and the PLA, there can be no return to the split-the-difference peace processes that have failed completely in the past. Even more, Bush must not allow Saddam Hussein and Osama bin Laden to remain in play. That they are still around, poised to do catastrophic mischief, is a huge factor in just how far American confidence in this war has deteriorated.

To be sure, the greatest mistake Papa Bush ever made was leaving Saddam Hussein in place. Weakened or not, he is still there — and Americans have never liked loose ends. With weapons of mass destruction at his disposal, and through his financing of terrorism worldwide, Saddam is a dangerous loose end.

Decisive shock therapy to revive the American spirit would surely come with a U.S. invasion of Iraq. Why not begin with a large-scale special-forces commando raid on the Iraqi oil fields? This will send a shot across Saddam’s bow; an electrifying signal to all terrorist nations. The message will be that the game is up. Surrender now or you will be crushed in a short while. Meanwhile, Saddam’s cash flow can be cut off. Oil is his only crop, his single manufacture. Without money there will be nothing left to steal, and nothing to use to pay off his cronies.

A couple of weeks later a final assault on Baghdad can take place. A small war, to use Wall Street Journal editorialist Max Boot’s lexicon, led by fast-moving special forces and leather-toughened Marines, and assisted by high-tech precision bombs and air cover, can get the job done. All-out war mobilization is unnecessary. Iraq will fall with much less. At the same time, U.S. special forces must conduct a similar sweep to root out the bin Ladens and al Qaedas along the Pakistani/Afghan border. In his key war speeches thus far — the axis-of-evil designation before Congress, the first-strike-preemption speech at West Point, and this week’s Palestine-directed statement of institution-building through the principles of freedom — Bush has kept democracy and a market economy central to solving this world terrorism crisis. But statements of principle only go so far. The spirit and security of the United States now require the instrument of war. The shock therapy of decisive war will elevate the stock market by a couple-thousand points. We will know that our businesses will stay open, that our families will be safe, and that our future will be unlimited. The world will be righted in this life-and-death struggle to preserve our values and our civilization. But to do all this, we must act."

Moron.