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Gary Cohn’s Reported Replacement Missed Signs of The Great Recession

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President Donald Trump says he is “very strongly” considering hiring CNBC commentator Larry Kudlow as the director of his National Economic Council, replacing Gary Cohn. Kudlow told the Wall Street Journal that he accepted Trump’s job offer and that an announcement could come Thursday.

Kudlow’s media career, including a column called “Kudlow’s Corner,” leaves a long trail of forecasts for the U.S. economy, some of which proved accurate and others that fell short. He’s supported much of Trump’s agenda but criticized some key elements of it.

Here’s a collection of key comments:

Kudlow on the 2007-09 Financial Crisis:

In 2005, he said “all the bubbleheads” looking for a housing-price crash in Las Vegas and Naples, Florida, and the wider economy, would be proven wrong.

By December 2007, the month the National Bureau of Economic Research later dated the start of the recession, he was arguing there was no recession and that the “Bush boom continues.”

“The pessimistas are a persistent bunch,” he said.

Kudlow on Inflation:

He predicted in 2010 that Federal Reserve Chair Janet Yellen would spur higher inflation, which didn’t happen.

In 2014 he argued lower oil prices are unambiguously good — versus the Fed’s and most economists’ view that there are winners and losers to lower oil prices as the U.S. has become a bigger producer.

Kudlow on Economic Growth:

Echoing Trump, Kudlow in 2015 said the U.S. should have a 5% growth target, which is more than most economists think is realistic. The Fed’s long-term growth estimate is less than 2%. Treasury Secretary Steven Mnuchin sees the U.S. economy expanding by 3% or faster because of tax and regulatory reforms.

In 2016, Kudlow predicted a business recession looms. Profits did decline before recovering.

Kudlow on Tax Cuts:

In December, he said Trump’s tax overhaul will lead to 3% to 4% growth, more optimistic than most forecasts, and said the president is on the side of the “growth angels.”

He said in February that a recovering economy could push long-term interest rates beyond 3.5%.

Kudlow on Immigration:

In 2015, he called for a halt to immigration, changing his position he said because of national security concerns: “Seal the borders,” he wrote.

Kudlow on Trade:

He criticized Trump’s trade agenda before his election and more recently labelled his tariffs as tax hikes and prosperity killers.

He’s joined other economists in warning they put at risk 5 million jobs in industries that use steel.

Kudlow on the Dollar:

He has argued Trump needs to embrace a strong dollar policy.

Kudlow on the Trump Market:

He predicted the stock market would go up if Trump was elected. Contrary to a lot of commentators, he was right.

— Check out Kudlow to Trump: Push Tax Cuts Now — or Else on ThinkAdvisor.


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