Thursday, March 15, 2018

Thanks and congratulations, Larry!

My career as an economist began in 1980, the day I stumbled upon John Rutledge's CEI Forecasting Conference on the campus of Claremont McKenna College. At the time, I was in the midst of the MBA program at Claremont Graduate University, having previously received a BA in Philosophy at Pomona College (economics, I would learn, draws heavily from philosophy and business). Larry Kudlow happened to be the key speaker at the conference. He spoke of inflation, gold, the dollar, and economic growth, and all those things strongly resonated with me, as I had recently returned from four years in Argentina (1975-1979). I remember thinking there was nothing in the world that could be more exciting than to follow in his footsteps. Thanks, Larry, for being such an inspiration.

While living in Argentina I had the "privilege" of surviving inflation that raged at well over 100% per year, suffering gargantuan swings in the value of the peso (which lost over 95% of its value), and witnessing the military takeover of the failed government of Peron's widow, Isabel. Following macro-economic variables daily in Argentina was critical to survival, and in Larry I saw that my experiences in Argentina could serve as the foundation for an economics profession in the U.S. One year after seeing Larry speak, I was working for John Rutledge and meeting the likes of Larry, Art Laffer, Jude Wanniski, Bob Mundell, David Malpass, and Steve Moore. I grew up on the supply- and monetarist-side of the economics profession, because I became convinced that those disciplines held the key to best understanding how economies and markets work. Politically I'm a libertarian, because I'm convinced that governments and bureaucrats can never be as effective and efficient as free markets, and more government necessarily means less individual freedom, and that can never be a good thing.

Larry was the first economist who inspired me, and we've been close in our thinking ever since (he even reads this blog). Although we haven't always agreed on everything, and neither of us can claim to have forecasted the Great Recession, we share the most important values: a strong and stable dollar (which implies low and stable inflation), strong and steady economic growth, limited government, rule of law, and free markets (which imply free trade). We both know that any country that embraces those values is bound to be a place of opportunity and prosperity. Larry's whole life has prepared him for a position in which he can help influence the policies that will make the U.S. strong and prosperous. Congratulations, Larry, you've made it.

So naturally, everyone wants to know why Trump picked Larry, and why Larry chose to accept, since they have diametrically opposing views on trade and tariffs.

The best explanation that comes to mind is that Trump has persuaded Larry that higher tariffs are 1) temporary and 2) a tool with which to pressure China into opening its markets to more foreign goods and services and respecting intellectual property rights. A minor transgression, if you will, that will eventually yield a greater payoff. If nothing else, Larry's presence at the NEC will be a critical offset to Peter Navarro, and a voice of reason and experience that may keep Trump from wandering into "left" field. That Trump chose Larry, knowing his opposition to tariffs, speaks well to Trump's judgment.

Larry is a good man, an excellent economist, and a seasoned persuader. He is a great choice for director of the White House National Economic Council.

For more, today's WSJ has two excellent articles which faithfully round out the person that is Larry Kudlow: here, and here.

10 comments:

Carter the Examiner said...

Except....he's not an economist. Undergraduate history major. Studied politics and economics at Princeton, but never got a Masters degree, no less a PhD.

Scott Grannis said...

It doesn't take a degree in economics to be an economist. One only has to be "an expert, specialist, or practitioner" in economics, according to just about any dictionary. Like Larry, I don't have a degree in economics, and I'm happy that I didn't waste my time getting a PhD in the subject. We've both spent decades immersed in the field, and that is plenty sufficient to qualify.

Frederick Sontag said...

I can't believe a philosophy major from Pomona College could opine on economics - especially anyone who found the Kierkegaard class useful. But I guess things worked out for you. Maybe Pomona philosophy majors need more exposure to people like Kudlow to draw them into the field. It might improve the quality of the economics thought we hear these days.

randy said...

I was looking forward to your post about Kudlow's posting! What a decision - the pinnacle of a career - but tied to a, um, crazy man. We should be grateful that professionals like Kudlow and Kelly and others are willing to serve. May he have great influence!

Benjamin Cole said...

I wish Kudlow wild success in bringing prosperity to America!

PS: I like to joke there are no atheists in foxholes, and no libertarians when neighborhood property zoning is under review.

Frozen in the North said...

BC

Funny funny variation on the atheists in foxholes....I laughed for a solid minute, still smilling


must remember that one!

amritsari said...

You mean the same Kudlow who thought there was nothing to worry about leading into the crash during 07-08 ??? Man, people have short memories. And flexible principles. And all of a sudden, you think tariffs are ok as long as they are "temporary". Obama got yelled at by the likes of you for merely uttering the wrong words.

amritsari said...

Kudlow spectacularly wrong many times:

http://time.com/money/5197470/trump-pick-kudlow-predictions/

Tom Nugent said...

Commentary sounds like Monday morning quarterbacking. Larry has made many right calls too. As long as he doesn't stray from his principles he should be a source of good ideas for the president.

sgt.red.blue.red said...

Great pedigree you have, Scott. A propitious attendance at a conference helps set the course for a great career.