Trump drives his advantages by bringing in Larry Kudlow
Markets jumped for joy on the initial news that President Trump has appointed Larry Kudlow to lead his new White House National Economic Council a few days ago, and then moved higher again this morning as the news consolidated. It's all for a reason.
Kudlow is known to Wall Street as a rock-solid free marketer, and with his Bear Stearns banking background (where he was chief economist), he also knows how markets work.
Larry Kudlow. Credit: Gage Skidmore via Flickr.
Verdict? Better results in the market, better returns in our 401(k)s, and more jobs for everyone to choose from as new businesses form. What we are seeing here in this choice is Trump playing on his political strengths, which comes as a result of the tremendous tax cut package passed late last year in Congress and its unexpected add-on effects such as bonuses.
Trump isn't letting those go. By putting Kudlow out front, he's got an advocate for them who will continually remind voters that what's good now is the result of having President Trump stand up for them and their interests.
Note that in this stock report, start-ups were a particularly bright spot. Markets know the score on Kudlow and that one.
Kudlow is just a great choice for someone like President Trump, whose instincts go toward free markets generally but also who has a populist streak, which has resulted in pro-tariff positions, which can be very, very counterproductive to U.S. interests if they aren't done right.
Kudlow, with his sunny perspective dating from his days as an official in the Reagan White House, and his iron grip on free markets, is perfect for helping Trump see through his best instincts. He's laid back and calm, which means he will get along with the sometimes hyper Trump and not be fazed by his moods, and since he speaks in language any human being can easily understand, he will communicate well with Trump. Better still, with his public speaking and television background, he will communicate well with the rest of us, selling free markets to the American people in eloquent terms. Our country desperately needs this.
He does have differences with President Trump on tariffs and the need for a strong dollar, and President Trump knows this. Kudlow comically told the Wall Street Journal that when he got the call from President Trump offering him the job, he thought Trump was calling him to yell at him for being too contrary on tariffs. But this is not how Trump works. He kind of likes dissenting views, which rather signals an open mind. It's not the first time this has happened. A Venezuelan friend, the brilliant Pedro Burelli, once told me that back when he was director of the emerging markets desk at a large, prestigious investment bank, he met with Venezuela's then-president, Rafael Caldera in the 1990s, and was asked about the government, which he frankly told the president was corrupt. Caldera offered him a job as one of the state oil company's directors on the spot, liking a straight talker. It seems to be the same dynamic here with Kudlow.
It's good for all of us. Kudlow is a Jack Kemp-type Republican, meaning he isn't an elitist, so we will never get Obama White House-style gobbledygook intended to conceal bitter pills, such as Jonathan Gruber specialized in as he shoved Obamacare down our throats. Kudlow's a guy who wants to raise up all communities, black, white, brown, and with his Reaganite background, he knows how to do this and why it works.
I used to talk with him a lot when I was a reporter at Dow Jones & Co., and then the Bond Buyer, covering the Treasury market in the late 1990s. He was at Bear Stearns at the time and the nicest guy you'd ever want to talk with, explaining complex economic concepts out for beginner reporters with great patience. He had a charming sense of humor and a great way with a quote, so he was one of those guys you'd always like to get a quote from. In short, he was a real pleasure. Obviously, President Trump thought the same thing. That's why he appointed him. And that's good news.
*Correction: An earlier version of this piece misstated the government entity in the Venezuelan anecdote, the correct entity is the Venezuelan government. Apologies to Burelli for the error.