Tuesday, March 13, 2018

Larry Kudlow is usually wrong

by Bill McBride on 3/13/2018 01:29:00 PM

With all the discussion that Larry Kudlow might be named the new director of the White House's National Economic Council, I've been asked to repost a post I wrote in 2016 "Larry Kudlow is usually wrong". On Kudlow, see from Bloomberg: Trump Says Kudlow Has ‘Very Good Chance’ at Taking Cohn’s Job and CNN Trump tells people he is selecting Larry Kudlow to replace Gary Cohn

Most of the following is a repeat of the 2016 post ...

Larry Kudlow is usually wrong and frequently absurd, as an example, in June 2005 Kudlow wrote "The Housing Bears are Wrong Again" (link has been replaced) and called me (or people like me) "bubbleheads".

Homebuilders led the stock parade this week with a fantastic 11 percent gain. This is a group that hedge funds and bubbleheads love to hate. All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market.
I guess I was one of those "bubbleheads"!

In December 2007, he wrote: Bush Boom Continues
There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told.
Note the date of the article. The recession started in December 2007!

Note: At the beginning of 2007 I predicted a recession would start that year - made it by one month.  It seems I'm always on the opposite side from Kudlow of each forecast - and one of us has been consistently wrong.

In 2014, Kudlow claimed: "I've always believed the 1990s were Ronald Reagan's third term."

In that piece, Kudlow was rewriting his own history.  Near the beginning of Clinton's first term, Kudlow was arguing Clinton's policies would take the economy into a deep recession or even depression.  Kudlow was wrong then (I remember because I was on the other side of that debate), so he can't claim he "always believed" now.  Nonsense.

Also in 2007, right before the crash during President George W. Bush's 2nd term, Kudlow wrote: A Stock Market Vote of Confidence for Bush:
"I have long believed that stock markets are the best barometer of the health, wealth and security of a nation. And today's stock market message is an unmistakable vote of confidence for the president."
Well, maybe Kudlow had a point ... about President Obama!

Now Larry Kudlow might be the new director of the White House's National Economic Council. Oh my.