From Bankruptcy to the Presidency
Donald Trump claims to have brilliant business acumen, but anyone who’s watched his career knows this isn’t borne out by the facts. His father started him out with a nest egg of $400 million—passed on to him in questionable tax-free transactions—and since then, Donald has driven a long string of businesses into bankruptcy. Sadly, the entire country is now suffering because of his incompetence, lack of judgment, inability to evaluate and act on expert advice to prepare for looming disaster.
The pandemic is real life and death. On the other hand, Trump was successful performing as a reality television star. In spite of his obvious deficiencies managing actual businesses, producers of the Apprentice were able to create the persona of an extraordinarily wealthy, highly successful businessman. Absent the necessity of actually supervising a real business, Trump could impersonate a powerful, effective CEO. With a paycheck and promotional efforts from NBC, the value of the Trump brand grew and brought him income from royalties without the need to actually operate a company. Ultimately, this led to Trump being chosen President and Chief Executive Officer of the largest operation in the world, the Government of the United States.
Trump Appoints Larry Kudlow Chief Economics Adviser
As time passed, Trump became more confident playing the “role of President.” But beyond that, he apparently has come to see himself as more of an all-knowing and all-powerful Emperor. He now feels entitled to defy experts, disregard truth and science, and substitute his wishes for facts. Only those who have openly supported his policies and effusively praise him are seen as qualified to serve in his administration. A prime example is Larry Kudlow, whom Trump appointed Director of the National Economic Council.
Kudlow replaced Trump’s first economic advisor, Gary Cohn, previously President and Chief Operating Officer of Goldman Sachs. Cohn resigned in 2018 after Trade Advisor, Peter Navarro, and Commerce Secretary, Wilbur Ross, went outside the deliberative process, behind Cohn’s back to inform heads of the steel and aluminum industries that tariffs were about to be imposed on imports of those metals. While Cohn and Kudlow fundamentally share the same economic philosophy—free trade, tax cuts and a strong dollar, Cohn is a man of much greater substance and integrity.
Though Kudlow believes in free trade, his principles apparently are much more flexible. I suspect the appeal and prestige of being the chief economic adviser to the President of the United States enables him to bend his opinions. He spent years on Wall Street and served in the Reagan administration’s Office of Management and Budget. It wouldn’t surprise me to find out that Kudlow’s years as an economics commentator on television makes Trump view him a kinsman of sorts.
Kudlow’s Blown Calls
Personally, I find Kudlow’s analyses and advice driven more by ideology than sound economic principles. For example, in 1993 when Bill Clinton initiated across the board tax increases, Kudlow predicted it would depress the economy. What followed was an eight-year expansion that added 21 million jobs and a balanced federal budget.
In 2007, as the housing market bubble was about to burst and the country was on the brink of a terrible recession, Kudlow predicted 2008 would be the seventh consecutive year of the Bush expansion.
Kudlow has repeatedly proclaimed the 2017 tax cuts have already paid for at least 80% of lost revenue. This is an absolute falsehood, or to be more direct, a bald-faced lie, which must warm the cockles of his boss’ lying heart. The fact is, economic growth, which was used to justify the 2017 tax cuts, is nowhere near what was promised. And that is before the extensive economic damage of the Covid-19 Pandemic. The Congressional Budget Office (CBO) calculated that even though we have had economic growth, it only makes up for about 20% of the cuts. The result is lower revenue as a percentage of GDP, greater deficits and, of course, much greater debt.
This notion that tax cuts pay for themselves is a Republican philosophy that is not borne out by historical results. It is the same disproven philosophy as low taxes create jobs. If you have any doubt as to the latter, may I shamelessly suggest you read my 2012 book, If Low Taxes Create Jobs, Where are They?
Kudlow Speaks Out
The point here is that when Kudlow speaks now, you are not getting the unbiased opinion of an independent economist. Rather, you are getting the spin of someone carrying the water for Donald Trump. And we all know what kind of genius he is.
And Kudlow has not limited his “expert” opinions to economics. In February, when Trump was downplaying the disaster looming on the horizon, Kudlow stated unequivocally that it was “contained,” adding it was “pretty close to airtight.” When it became clear that Trump and his team had completely missed the boat on the pandemic, Kudlow argued that there were only few cases when he made his ridiculous pronouncement, and that no one could have predicted the virus would spread exponentially.
As the world knows, this is not true. Health experts had been sounding the alarm for some time. And within the confines of the White House, Peter Navarro, Trump’s trade adviser, had circulated two memos, one in January, the other in February, warning that the pandemic would have a significant impact on the United States. Clearly, Kudlow was spreading misinformation, spinning Trump’s promotional talking points, aimed at shaping public opinion and keeping the stock market at record levels. The Master of Deceit has a very willing apprentice, ready to conjure a lie and present it with authority.
Early in April Kudlow praised the loan program for medium-sized “Main Street” businesses, though he actually didn’t know any of the program’s details. But that didn’t stop him from announcing, “Everybody who wants one [a loan] is going to be able to get one.” Hmm, sounds a lot like Trump’s “Everyone who wants a test can get one.” It’s the flimflam philosophy of “promise them anything because a sucker is born every minute.”
Kudlow on Reopening the Economy
Since Kudlow will be among those leading the chorus on reopening the economy, it’s important to recognize his history, and the forces that color his comments and advice. Whatever makes Trump look good is what Larry will deliver when it comes to reigniting the economy. He spouts assurances that states will meet White House Guidelines for reopening the economy. Yet many states are doing so despite failing to achieve the standards established. Additionally, the majority of states lack adequate testing capability. The shortages in testing apparatus and personal protective equipment are an ongoing problem. Many health experts predict that a second wave of the virus in the fall or winter, in the midst of flu season, could cause catastrophic results on hospitals and a rising death toll.
As the economy reopens, Kudlow posits that businesses should not be liable if employees or customers contract the virus. He blithely states he isn’t worried about safety measures slipping if companies aren’t held liable. After all, he’s confident the states will do a good job in monitoring that situation—whatever that means. Obviously, this isn’t the plan of a man who is concerned with the welfare of either employees or customers. A more thoughtful and effective approach would be to establish guidelines for businesses to follow, aimed at safeguarding employees and customers, and providing liability protection for those that do.
Larry’s Recent Observations
More recently, Lying Larry commented that the new Democratic plan to put $3 Trillion into the economy was the wrong approach. Too soon, he said, since we don’t know how the initial cash infusion worked out. Perhaps that’s because he only watches Fox News where most everyone is just clamoring to get out there, mix it up with friends and spend money, like the real patriots they are.
Besides, he knows the best way to get the economy moving is to follow the original policy the president used to build the economy. Surprising no one, he offered the same magic formula as reliable as Trump’s promise that the coronavirus would magically disappear. “Reduce taxes and regulations are the tonics we should pursue,” he said. Later he added a cut in payroll taxes to the list of stimuli.
Perhaps Lying Larry should take another look at the U.S. economy where small business accounts for about 44% of all employment and 2/3 of all net new jobs. I doubt that small businesses fighting for survival and strapped for cash will be much moved by the prospect of lower taxes or even fewer regulations. And those that managed to stay alive during the pandemic as well as all other businesses face the prospect of reduced revenue because of restrictions placed on being at full capacity. Even absent those restrictions, I don’t believe most consumers will be rushing to travel on an airplane, shop in a mall or eat in a restaurant. Nor will making meals and entertainment deductible for income taxes be much of a stimulus to business. We are a consumer driven society and the best stimulus is making it safe to be out and about.
Oh, and as for cuts in payroll taxes, that won’t mean much to an unemployed work force.
Trump’s Inaction and Consequent Deaths
Trump makes no attempt to hide his true objective, which is always aimed at what he thinks will benefit him. In this case, it’s to reopen the economy, regardless of the cost in lives. If he believes he will be rewarded, no risk to others is too much. Of course his inept son-in law, Jared, has given the green light, opining that by July, the country could be “really rocking again.” Disregard the scientists and objective economists who point out that this is a health crisis, not an economic crisis, and the latter will not be resolved until the former is.
How easily the death tolls roll off of Trump’s tongue. Remember when it was only one person, but that soon became 50,000 or 60,000, which he and robotic Jared deemed a great success. Now this empathy-lacking duo spews the death tolls of 80,000, 90,000, 100,000 as if counting heads of cattle. It is horrifying to think that we may be well past those numbers by the time you read this. Those are people. People who had lives, who were loved, and who are sorely missed by family and friends.
More people have already died From coronavirus than died during the entire Vietnam War. And the number of those that died is far greater than it should have been because Trump ignored and then downplayed the perilous nature of this virus, which he continues to do.
New York Governor Andrew Cuomo illuminated the necessity of preparing in advance for a pandemic by comparing it to preparations for a hurricane. When you know a hurricane is coming, you board up the windows and stock needed supplies. You don’t wait until the hurricane hits to start doing that. In Trump’s case, the hurricane is swirling around us and he still fails to act.
And while dismissing the deaths yet to come as necessary for the economy to survive and thrive, Trump and his team prevented the CDC from issuing the specific guidelines they prepared, meant to minimize spread of the virus while the country reopens. With a callous disregard for the welfare of Americans, Trump doesn’t want to put a damper on the economic recovery with too many safety-first rules. After all, he predicts a major rebound in the months ahead, supported by Kudlow’s analysis of so much pent-up demand.
Trump Disregards Safety to Reopen the Economy
Most independent and realistic economists don’t buy this pipe dream, and with good reason. We are a consumer based economy and consumers aren’t interested in returning to the marketplace, to restaurants or hair salons where their health can be seriously threatened. In fact, polls indicate about 70% of respondents plan to stay where they are. They also prefer others stay home and socially distance to slow the spread of the coronavirus than rush to reopen the economy.
The premature rush to reopen has profound consequences should the virus return with a vengeance, once again overwhelming hospitals and causing reopened businesses to shutter again. When, in testimony before the U.S. Senate, Dr. Anthony Fauci, the country’s leading expert on infectious disease, warned against reopening too soon, Trump responded, “that was not an acceptable answer.” I doubt that many Americans, who aren’t part of the Trumpian cult, find Trump’s response acceptable or are reassured by Trump’s latest pronouncement that the virus is just going to go away.
Concerns of American Citizens
Americans are worried, and rightfully so. It’s a frightening time, made more so by a President who blames others, offers false reassurances and ignores facts. Those of us who believe this is really happening, and a highly contagious, deadly virus is actually sweeping across the country, are left to wonder how best to protect ourselves. We question why the federal government isn’t doing more.
We want to know what might be done to mitigate the spread of Covid-19 until a vaccine is created. We want to know why Trump hasn’t invoked the Defense Production Act to enlist the capabilities of American industry to produce adequate testing equipment and supplies, personal protective equipment and ventilators. And why hasn’t Trump spearheaded a federal approach to a testing program, contact tracing and isolation?
Taking such action would accomplish two significant objectives—facilitate the reopening of the economy and provide a limited but effective boost to manufacturing and other employment. Meat production is important, but does it deserve a higher priority invoking the DPA than attacking the coronavirus directly?
Of course, we do know why. Trump is a narcissistic incompetent who is afraid to take responsibility. How stupid, arrogant and vain do you have to be to refuse to wear a face mask because you’re afraid of looking silly? You know the answer. I can only hope voters remember this in November.+