Trump Advisor Larry Kudlow’s Long History of Bad Predictions and Deception

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In case you missed it, here was a very revealing interview with Trump’s economic advisor on CNN in which he fumbled about explaining Trump’s incoherent eviction safeguards, as well as how much-unemployed people will be receiving from the Trump administration.

Kudlow’s answers are a great example of mumbo-jumbo, lying, and evasion. This short interview should be mandatory viewing in any high school and college business class. If any top manager in any American business made these statements at the local Rotary Club they would be fired.  But in the Trump White House, they are cause for a bonus and a promotion.

In the interview with CNN correspondent Dana Bash, Kudlow dances around Trump’s false claim that his executive orders will prevent evictions. Not true. He then does more mumbo-jumbo worthy of a performance by comedian Professor Irwin Corey when he says:

“At a minimum, we will put in 300 bucks and the states will continue with their 400 bucks. But I think all they have to do is put up an extra dollar and we’ll be able to throw in the extra $100,” he said.

“But on average, Dana, it’ll run to about $800.”

“Bash questioned Kudlow’s statement, saying, “But the executive action says $400 and that the state would pay 25% of this. You’re talking about some other money that I don’t know about.”

How Kudlow got from $200 to $800, and whether states are contributing to the Fed or not, is nonsense that Kudlow has been saying for decades.

Kudlow’s Long History of Lying

Unfortunately for the American people, Kudlow has a long history of lying and hiding the truth. What made him into a professional liar is hard to determine, but he has had significant personal problems that got him fired from good jobs, led to his divorce, and caused him to go from the left to the far right-wing politically, and from Judaism to devout Catholicism.

In an article in the Buffalo News on July 4, 1995, Kudlow was cited for the following:

  • He was fired as economics editor of the National Review and was “in danger of overdosing on cocaine,” his wife said.
  • Kudlow became so desperate for cocaine that he withdrew $60,000 from his Individual Retirement Account at Bear Stearns.
  • Mrs. Kudlow said her husband’s drug counselor thinks he “will probably overdose or die of a heart attack if he has access to the money at Bear Stearns.”
  • Mrs. Kudlow said she had to “sell both of their Manhattan residences to pay for treatment of his cocaine habit and to pay off $150,000 of debts accumulated because of his addiction.”
  • Kudlow was fired from Montgomery Securities and Bear Stearns for his drug problems. At Bear Stearns, he was a senior managing director and chairman of the firm’s investment policy committee, and chief economist.
  • Kudlow’s addiction was treated and he has recovered, but his addiction did raise some red flags at the White House. People who are addicted or have other substance abuse problems are considered Security risks. But for some reason, Kudlow got a pass.

Separately he also said “We [the Trump White House] have contained” the COVID virus,” Kudlow told CNBC in February 2020. “I won’t say airtight, but pretty close to airtight. We have done a good job in the United States.”

Kudlow’s Extreme Personality Swings

Kudlow also has an extreme past, both in terms of his politics and religious beliefs.  These severe swings probably indicate a personality problem that Trump finds attractive.

In the 1960s and 1970s, Kudlow was in the leftist Students for a Democratic Society, a major supporter of Bill and Hillary Clinton and against the Viet Nam War. But he then went to the opposite side of the political spectrum and became head of Office of Management and Budget in the Reagan administration, according to a 2016 article in Newsweek.

He then got a job at the conservative National Review where he was introduced to Catholicism. But Kudlow continued to abuse drugs and alcohol.  He went to drug and alcohol rehab in Minnesota.  Kudlow, who was bar mitzvah, converted to Catholicism at St. Thomas More Church in New York City in 1997. “As soon as I saw Christ on the cross, I felt at one with it,” he said.

Kudlow, who has been married three times, then went on to the financially and politically conservative CNBC, which through some poor reporting and faux TV outrage gave rise to the Tea Party.

Kudlow’s Bad and Intentionally Misleading Economic Predictions

As a top economist in the Trump administration, Kudlow is also known for his lousy predictions and outrageous statements. He is a devoted followed of  Arthur Laffer, the Reagan ecopnomist who said lower tax rates would boost tax revenues.  At a dinner after Kudlow left rehab, he broke down in tears when describing his affection for Laffer.  Kudlow has also made some very inaccurtae economic predictions that appeared in the New York Times, Money Magazine, the Progressive Pulse,  Washington Post, and MarketWatch. All these media have their lists of bad predictions. These predictions probably would have got him demoted if he was in the private sector, but in the Trump White House, data and factual accuracy is not a problem.  Data fiction and lying are highly regarded.  In both of these areas, Kudlow is an expert.

This is why Kudlow is highly regarded in the Trump White House; one that has been conducting a disinformation campaign since Trump’s inauguration.

No Victims in LIBOR Price-Fixing Scandal

He famously said in a 2012 Club for Growth panel discussion on CNBC that one of the largest price-fixing scandals of the 20th Century involving the London Interbank Offering Rate (LIBOR), that there were no victims.  LIBOR is one of the most widely-used indices that dictates everything from mortgages to car loans. His statement that there were “no victims” of this price-fixing scandal on national TV shows he will say anything to protect the free-market system and big banks.

In a short article in Slate.com, ex-New York Attorney General Elliot Spitzer called Kudlow out on protecting Barclays and was just amazed that a CNBC anchor would knowingly try to mislead the public about the LIBOR price-fixing debacle.

In the article, Spitzer quotes Kudlow as saying:

“I mean, maybe you’re right, the victim was the lender, Barclays. But I don’t know. The Justice Department says this could be a criminal prosecution. I don’t get that. Who are the victims? Who are the victims?”

When he said this, Kudlow was either lying or terribly misinformed.  He may not have had the exact numbers, but basic research (if he had any ethical standards) would have shown that LIBOR controlled the rates in over $350 trillion in derivatives swaps contracts worldwide, including those managed by Fannie Mae and Freddie Mac (and most adjustable ARM contracts and other sub-prime mortgages), the TARP loans, the $40 billion in the Treasury’s purchase of AIG preferred stock, the Term Asset-Backed Securities Loan Facility (TALF), and covered everything from corporate borrowing to consumer auto loans to credit cards.

What 2008 Housing Bubble?

Kudlow also was  “spectacularly wrong on the biggest economic turning points in modern history,” the 2008 housing fraud and mortgage collapse, according to the Newsweek article. Here, Kudlow ridiculed people who predicted the mortgage debacle and resulting economic recession as “bubbleheads.”

Wrong Again on Stagflation

Kudlow also targeted the Obama administration’s economic policies as leading to “1970s-style stagflation.  This never happened and under Obama, the US saw its lowest inflation in two generations and the lowest interest rates in history until the 2020 Fed policies enacted to rescue the economy from the COVID virus.

Kudlow Belongs In the Flawed Trump Administration

Anyone who has watched spy thrillers knows that people who have a certain personality and history can be manipulated by their handlers.  Kudlow is one of these people.

The manipulation varies by technique and degree, but a skilled manipulator like Trump knows that flawed people have weaknesses that are easily be exploited. Kudlow is one of the best victims. So far, Trump has used him well and his past shows that he will continue to be a willing voice for more right-wing causes in the future.

 

 

 

 

 

 

 

 

 

 

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Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry. He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial. He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site, www.mutualfundreform.com, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).

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