Larry Kudlow, the President’s economic advisor since the resignation of Goldman Sachs alum, Gary Cohn, recently made a pretty ridiculous comment on FOX News. You can see the video below.
— FOX Business (@FoxBusiness) June 29, 2018
“Deficits are coming down rapidly, ever since Trump took office,” Kudlow proclaimed. The statement was not true, and Larry was roasted in the media for it. Every major news outlet in the country discredited the statement, posting evidence on its inaccuracy. Here’s just a short list of some of those:
- The New York Times
- CNBC, the network he had a show on for many years.
- Business Insider
- Forbes, who say of Kudlow’s claims, “Wishful Thinking Improves Nothing”.
- Washington Post, where a headline says, “Trump’s top economic adviser says deficit ‘is coming down rapidly’, contradicting virtually all available data.
Larry Kudlow is most famous for his time at CNBC. He hosted several shows on markets, economics, and stocks, most notably, the Kudlow & Cramer show. The show was short-lived; it aired between 2002 and 2005.
In 2005, the show was split into two shows, and Larry Kudlow became the host of The Kudlow Report. Jim Cramer became the host of Mad Money, which still airs to this day. The Kudlow Report aired until March 2014, proving far more successful than Kudlow & Cramer. The Kudlow Report had a very political spin to it, focusing on understanding the intersection between Wall Street and Washington D.C. Larry Kudlow, a conservative, turned the show into a success by hosting an impressive list of political royalty. You can find a list of them here, but they included political figures, such as President George W. Bush and Vice President Dick Cheney, and finance figureheads like T. Boone Pickens and Jeremy Siegel.
There’s no mistaking Larry Kudlow for a liberal. He favors free-market, capitalist, trickle-down economics. He loves Ronald Reagan, and reflects a lot on his economic and tax policy. He doesn’t really talk about how those policies led to events like Black Monday and the S&L Crisis.
He’s a staunch supporter of the Trump Tax cuts, that were helped into reality by Larry’s predecessor, Gary Cohn, a former executive at Goldman Sachs. Larry highly respects Gary Cohn, even asking Gary’s entire staff to stay on when he took over Gary’s position.
How could Larry Kudlow get something like the US Budget deficit so wrong? The Budget Deficit is covered and watched like a hawk by everyone from academics, to politicians, to banking executives, to average Americans, like myself.
Is it possible that the White House’s Chief National Economic Advisor was not aware that the WhiteHouse.gov website actually publishes budget deficit numbers? The White House Office of Management and Budget website publishes tables of historical data going back decades, one of them being the government receipts, outlays, and net deficit/surplus. Below is the data:
The first three columns are the relevant ones; Kudlow could have consulted them before he went out on the media circuit to pump the Trump economic policy agenda. He could have had one of his staff do it. I plotted the three relevant columns. Below is the chart, for visualization:
Notice that in the late 1990’s, early 2000’s, the budget deficit actually became the budget surplus. We’ve talked about this before. In 1997, when President Bill Clinton was in office, he worked with Republicans to balance the budget. The result was the Balanced Budget Act of 1997. Guess who sponsored that bill in the House of Representatives? That’s right. A Republican, John Kasich, from Ohio.
This following chart is for Larry Kudlow. Clearly, the fiscal deficit is rising. Don’t get the fiscal deficit mixed up with the current account deficit, also known as the trade deficit.