Chewing on Kudlow (I): Is the "Kudlow Creed" Dead?

Larry Kudlow, a minor figure in the Office of Management and Budget under Reagan, is the host of a show, "Kudlow and Company"on CNBC. His audience is primarily the financial community on Wall Street--those that remain anyhow. Although most of his guests are rightwing, Kudlow does include the other side with such personages as Robert Reich (Labor Secretary under Clinton) and Jared Bernstein (Economic Policy Institute, and HuffingtonPost contributor).

Kudlow himself is an unabashed "supply-sider", who gets his guests to recite a pledge of allegiance to low taxes on the wealthy and free-markets, that he calls the "Kudlow creed", that goes like this: "I believe that free market capitalism is the best path to prosperity". Although he is also an unabashed Republican, he has been willing on occasion to chide them gently when they have strayed from the free-trade/free-market/low spending mantra.

When Hurricane Katrina struck, and George Bush had his klieg light minute promising to do "whatever it takes" to reconstruct New Orleans, Kudlow had a cow. He spent a week on his program getting people to trash "New Deal" style programs, wanted Davis-Bacon repealed (so workers would not have to get the prevailing wage!), and extolled the virtues of free markets to solve the problems.

Let me repeat, however, that Kudlow does provide space for contrary views to be expressed, and his guests are generally well-spoken and understand finance and the economy. His is not a phony Sean Hannity-Rush Limbaugh-Bill O'Reilly gig.

The Kudlow program has suddenly become interesting in its response and analysis to the economic meltdown. Gone is the Kudlow creed, or at least his daily recitation of it. Perhaps Kudlow sees the irony.

Most amazingly, Kudlow--the siren of free market, no government intervention--closed his show yesterday, with a final comment that said (and this is a close paraphrase): "Be cautious, but if the government delivers tomorrow, it could be a big day".

Imagine, Wall Street depending on the government.

But, the Democrats' position has been that the free market breaks down in various circumstances, and thus collective action in the form of government, or public-private partnerships, or rule-setting, is necessary. Kudlow and his ilk have always objected to the public participation part on ideological grounds--what are they going to say now?

Is it possible that the country may actually be able to debate the practical wisdom, rather than the ideology, behind economic policy? That might actually allow the country to solve some problems the rightwing has resisted for 4 decades.

Because Kudlow's program is about "money and politics", he had been plumping the McCain program and deliberately misconstruing the Obama plan on taxes. One may expect him to get back to blasting the Obama economic program and extolling the virtues of McCain's. He has expressed hope, for example, that Phil Gramm's departure from the campaign was only window-dressing, and that he was still helping behind-the-scenes.

Thus, Kudlow needs some watching. I'll be "Chewing on Kudlow" weekly at least until after the election, trying to sum up the thrust of his program's week. I'll try to make it interesting, and informative, but make no promise to match Jason Linkins entertaining weekly summaries of the Sunday talk shows.

With the economic crisis we face, perhaps Kudlow's show should be called, "Greet the Mess".

Comments

[justanotherdave]

Kudlow has a new mantra:

Drill, Drill, Drill...Free Market Capitalism.

[toje]

Nice column, really. But the mortgage and credit crisis was not due to an unregulated "free market" run wild. It was due to government intervention into the free market, demanding that more Americans be able to buy homes, and the Bush Administration needing easy credit for continued consumer spending to counteract the effects of the attacks of 9/11 (economic confidence) and the resulting $1 trillion (est.) cost of the war in Iraq and Afghanistan.

Oh yea, and greed beyond your wildest imagination.

I look forward to your critiques of Kudlow. I do like him and subscribe to most of his theories. But he's definately not got all the answers.

[LeeScho]

toje:

You are kidding, right? "It was due to government intervention into the free market, demanding that more Americans be able to buy homes,"

The government did not "demand" anything, it provided the opportunity. Did the government also "demand" that banks provide mortgages to unqualified buyers, then pass those bogus and packaged mortgages on to unregulated entities? Absolutely not!

The fact is massive fraud and greed by the banks and investment firms are the culprits here. My job allows me to personally know several dozen senior citizens who have lost or will lose their heretofore mortgage-free homes because of the ruthless acts of scavengers who convinced them to re-finance and take out the equity, which cannot be re-bulit on a small fixed income. Why not a reverse-mortgage? No windfall in that.

Wall Street begged for free-market economics, which amounts to virtually no regulation. Under Geroge Bush, Phil Gramm and John McCain, they got it. And then they plundered capitalist America. I call it it treason.

For all of those worried about Obama and Biden being Liberals, you should be so comforted. "We are all Socialists now." You Free-Marketers need to hang your heads in shame. Shame: You might want to look that up.

[Paul Abrams - Huffpost Blogger]

I am afraid the data say otherwise. The regulated part of the mortgage market, the classical banks such as Citi and JP Morgan and BoA, have all done well. Indeed, it is to THEM that the market,and the regulators, first turned to see if there was an appetite to take on the toxicity. BoA bought Merril, Barclays bought Lehman's assets out of bankruptcy (it was a miuch better deal to allow them to go bankrupt first), and so on.

Just for the record, I am not big on govt intervention myself. I just don't "worship" free markets, rather I realize that a) to work, they need regulation since trust and transparency is key to their working; and b) there are places where the free markets just do not work very well--the Republicans said, until Friday, "so what?", better not to have government involvement than to solve problems; whereas the Democrats and others like myself believe that collective action should step in where the free markets have failed.

Now, Kudlow cannot even state his creed anymore with a straight face--it lacks cre(e)dibility, especially as he was praying outloud for government intervention so the stock market could rise. So much for "government has no role".

My fondest wish is that the public discourse, including Kudlow, can now be open to discussions of practical solutions largely devoid of theology--whether economic or religious.

[brian54]

OK , lets really get to the heart of the finacial question - the source of this mess is that our nation does not know how to live within thier means.....our nation has become a society of blame someone else. The dems blame the GOP and vice versa.

If the nation was not a have everything + a starbucks today society we would not be chasing liquidity.

This is not a free market problem this is a society problem.

[ichiro]

@chrisro

and it never will, as people will always be human and there never has been nor ever will be a level playing field. so we must do the best we can: "I believe that free market capitalism is the best path to prosperity", may sound quaint, even philosophical, but cannot work. the theory and ideology of "free market" create far more destruction (not unlike Prohibition) encouraging competition than it does meaningful achievement, innovation, prosperity, LIBERTY, fairness, and PEACE.

complex, but worth it.

[chrisro]

It's a shame to see the "free market" taking the blame for the current problems; because the U.S. is *not* a free market.

Licensing...permits...price controls...fiat money...tariffs...bailouts...and more federal agencies than you can shake a stick at....

These are not attributes of a free market....not even close. A free market is the absense of all of the above.

A *real* free market has yet to have its day in the sun.

[ichiro]

and Open Borders.

(Libertarian Socialism, ichi style.)

[ichiro]

good for you! and nice catch!

"A creative man is motivated by the desire to achieve, not by the desire to beat others."

Universal Single Payer Healthcare; End Drug Prohibition; Nationalize Energy. NOW!

[S1m0n]

As the saying goes: [b]It all depends on whose ox is gored[/b]. Looks like Kudlow finally found a situation in which some of his herd were coming off 2nd best, and that has changed his tune on intervention.

[plebeianswillrevolt]

You realize, all the money that was "made" over the last 5 years did not disappear. Just last year I was reading about the luxury good feast that was occuring in Manhattan. Jewelery, luxury homes and cars..... Real estate agents, phony appraisers, loan processors,... and these millionaires are the bottom of the heap.

Is Robin Hood out there?

[LeeScho]

The hosts and commentators on CNBC were giddy to the point of arrogance today, lambasting Obama and the Democrats as if nothing had changed. But even Kudlow knows that everything has changed. As stated by someone in responding to the bailout, "We are now all socialists."

What has happened on Wall St. is treasonous. How do private citizens nearly drive this nation to economic ruin? This is a national security issue if there ever was one. Nearly eighty years after the Great Depression, the unbridled barons of Wall Street almost take us there again because they bought enough influence with the politicians to let them go un-regulated. With there Bush tax-cuts and their golden parachutes, they looted the dreams and spirits and industry of ordinary wroking-class people, and took their dollars in the process. And they walk away rich and free.

Free-market is a myth now. A fallacy. Free-market requires competence and honesty. It requires partiotism. It requires Country First - the fact, not just the slogan.