Donald Trump Hits A Grand Slam Appointing Larry Kudlow His Chief Economic Advisor

Larry Kudlow

by Ralph Benko, Contributing Author:  President Trump announced last week via Twitter:Larry Kudlow will be my Chief Economic Advisor as Director of the National Economic Council. Our Country will have many years of Great Economic & Financial Success, with low taxes, unparalleled innovation, fair trade and an ever expanding labor force leading the way! #MAGA#MAGA indeed. Bravo, Mr. President.

As I wrote here just before the announcement, Kudlow -- a friend -- is one of those “one in a million” most likely to succeed in helping President Trump to make America great again. Now that President Trump has officially selected Kudlow, let me more specifically enumerate Kudlow’s primary virtues.

Kudlow meets the premier criteria set forth by Peter Drucker, the first management guru (and proto-Supply-Sider), for executive effectiveness. As Drucker wrote in his breakout classic The Effective Executive:What all these effective executives have in common is the practices that make effective whatever they have and whatever they are. And these practices are the same, whether the effective executive works in a business or in a government agency….

There are essentially five such practices—five such habits of the mind that have to be acquired to be an effective executive:

1. Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.
2. Effective executives focus on outward contribution. They gear their efforts to results rather than to work. They start out with the question, “What results are expected of me?” rather than with the work to be done, let alone with its techniques and tools.
3. Effective executives build on strengths—their own strengths and the strengths of their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do. They do not build on weakness. They do not start out with the things they cannot do.
4. Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first—and second things not at all. The alternative is to get nothing done.
5. Effective executives, finally, make effective decisions. They know that this is, above all, a matter of system—of the right steps in the right sequence. They know that an effective decision is always a judgment based on “dissenting opinions” rather than on “consensus on the facts.” And they know that to make many decisions fast means to make the wrong decisions. What is needed are few, but fundamental, decisions. What is needed is the right strategy rather than razzle-dazzle tactics.

Kudlow brings to the table a focus on results -- economic growth --  rather than work. He builds on strengths, his own and those of his superiors. He has an ability to concentrate on the few major areas where superior performance will produce outstanding results. And he is decisive. Per Drucker, “What is needed are few, but fundamental, decisions. What is needed is the right strategy rather than razzle-dazzle tactics.”

This sums up what may be Kudlow’s greatest strength. Kudlow presents the ability to discern and consistently promote a strategy to bring about the sizzling economic growth that America, and President Trump, most urgently need.

There’s more.

Drucker also laid out what I consider to be the fundamental axiom of Supply-Side economics: feed the opportunities.In every area of effectiveness within an organization, one feeds the opportunities and starves the problem. Nowhere is this more important than in respect to people. The effective executive looks upon people including himself as an opportunity. He knows that only strength produces results. Weakness only produces headaches – and the absence of weakness produces nothing.

He knows, moreover, that the standard of any human group is set by the performance of the leaders. And he, therefore, never allows leadership performance to be based on anything but true strength.Kudlow has been criticized by some for what is mistaken for over-optimism. This sort of criticism is a misreading of Kudlow’s determined focus on "feeding the opportunities" and his recognition that “only strength produces results.”

And Kudlow as forecaster may take at least some solace from the observation of Sir Isaac Newton, one of the greatest minds of history and Master of the Royal Mint of Great Britain. Newton lost his fortune in the South Sea bubble and reportedly observed thereafter: "I can calculate the movement of the stars, but not the madness of men."

But, one element of Kudlow’s effectiveness to me looms largest.

Again, as Drucker wrote: “Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first—and second things not at all. The alternative is to get nothing done.”

Kudlow has his priorities straight.

After focusing in on getting the tax cut passed he pivoted to the Next Big Thing: monetary policy. As I wrote here:Bad dollar policy sunk Presidents Nixon, Ford, Carter, and at least one Bush. Good dollar policy burnished, and re-elected, Reagan and Clinton.

If President Trump craves the kind of sizzling equitable prosperity that Reagan and Clinton enjoyed -- and, consequentially, a shot at a landslide re-election -- his aspirations may hinge on this appointment.

… Lawrence Kudlow, joined by Arthur Laffer and Stephen Moore (with whom I have had occasional professional associations over the years), warned that the Next Test for Trump Is Stabilizing the Dollar For Sustained Growth. After congratulating the president on the passage of the tax cut, they go on to say:

There is, though, still a missing pillar of prosperity in the Trump economic agenda and that is a sound dollar strategy. The dollar weakened in 2017 and we want it stabilized. There’s little in this world that can bring our economy to its knees faster than a weak dollar in the foreign exchange markets.

Just ask people who served in the Nixon, Ford, Carter, Bush 2 administrations and Mr. Obama’s first term — all of which were undone by a weak and depreciating dollar, surging inflation, spiking interest rates, plus financial or commodity bubbles.

Meanwhile, under Reagan the dollar increased by 67% in value in the foreign exchange markets through 1985. The price of gold, interest rates, and inflation all fell as well from their double-digit inflationary highs, while the American economy reignited and the stock market launched its 18 year bull market.Yes, there are intramural disputes as to how best to stabilize the dollar. Kudlow now is the arbiter. Let the games begin.

There's more. Kudlow brings many talents to his new portfolio. One is charm. One of his nobler arch-adversaries, Vice President Biden’s former chief economist Jared Bernstein, says: “There’s probably nobody I disagree with more, and like as much.”

And Kudlow, as was Kemp, is a true pro-working-class populist. Per the New York Times:'The single group that benefits the most from a lower corporate tax is the middle-class wage earner,' Mr. Kudlow said in a February 2015 interview, 'and every study shows that.' Several studies dispute that, but they do not deter Mr. Kudlow....There is one more “trump card” worthy of pointing out about Larry Kudlow. Kudlow, like his boss, is what I have called a natural born “Opulist,” an “optimistic populist.”

Upon the recent passing of Jeffrey Bell, a friend of both Kudlow and me, I wrote here:Have you checked your stock portfolio lately? You’re probably checking it hourly, watching the Dow climb, since November 1, 2016, from a bit over 19,000 up to 26,616, then, recently, roller-coastering around the 24,000 range.

A thousand-point drop in a day, which we’ve experienced recently, sure is dramatic. It is also, assuredly, distressing to those who have not parked their assets in cash. But, hey, let’s add some context.

On November 13, 1979, the day Ronald Reagan declared his candidacy for the presidency, the Dow Jones Industrial Average was at 814

1. Eight hundred fourteen.

Three digits. Not five digits.

… Last Saturday, an important member of this warrior band, Jeffrey Bell, joined Kemp, Wanniski, and Bob Novak in Paradiso. So, let’s take this moment to celebrate their contribution to the epic achievement of largely replacing world poverty with world prosperity ... and to imagine the Golden Age of peace and prosperity that it might portend.

A phalanx of professional economists today will tell you that, and why, the world is consigned to economic stagnation forever. They call it “the new normal.” This claim is less persuasive, and far less intimidating, to those of us who had the first-hand experience, back in the 1970s, of facing a phalanx of professional economists confident that the economy just could not possibly grow at the rates propounded by the Supply Siders.

The Supply Siders? Who were those Masked Men who left these silver bullets? Jack Kemp, Jeff Bell, Robert Mundell, Arthur Laffer, Robert Bartley, Steve Forbes, Lewis E. Lehrman, Dave Hoppe, John Mueller, Jude Wanniski, George Gilder, Larry Kudlow, Warren Brookes, Bob Novak, Alan Reynolds, Charles Kadlec, Frank Cannon, Steve Moore and a handful of others including, in a very junior capacity, just the little drummer boy in The Spirit of ’76, me, the founder of the Prosperity Caucus.

… Trump comes the closest to exemplifying the quality of Bell’s Populist Postulate -- Optimistic Populism -- optimism about people’s competence to handle their own affairs -- of any of his rivals in the Republican presidential primary and the 2016 general election.

Optimistic Populist?  Let’s get funky and coin a word for it:

Opulist.

Jeff Bell first coined the taxonomic category of Optimistic Populist. Thus, he might well be considered the Aladdin that unleashed this djinn of President Trump from the Reality TV lamp.Now comes Larry Kudlow. Kudlow was an important member of the core team that propelled the Dow Jones from 814, pre-Reagan, to (as this is being written) nearly 25,000. Kudlow, like President Trump, is an Opulist.

From a parochial point of view, the Supply-Side has been without a political quarterback since Jack Kemp became secretary of HUD on February 13, 1989. Kudlow may become Kemp’s first legitimate successor as undisputed leader of the movement.
A few years ago, I teased Kudlow for his revelation “All we want is for everybody to get richer.”Rich people (except in California, a parallel universe) vote Republican. So, naturally, Republicans love rich people.

And hate the poor. Nothing personal. Poor people vote Democratic.

So, naturally, the Democrats love the poor. Who wouldn’t? It’s easy to love the people who wish to put you into power. Conversely, Democrats (excluding Bill Clinton and few other outliers) naturally hate the rich.

Revealed here, for the first time: the Republican Secret Agenda. What is at the core of their (OK, our) Nefarious Plot? Our Secret Plot is to make all the poor people rich. That’s the only way to end this ridiculous “two party” system and to make every Man-Jack and Woman-Jill in America into loyal Republicans.By selecting Larry Kudlow as the director of his National Economic Council President Trump signals a nefarious plot: to make poor people rich (and, thus, Republican). Fiendishly brilliant!

Is Kudlow sincere in his desire to raise people to affluence?

Without question.

Will Trump succeed?

Only time will tell.

That said, if anybody can aid Trump in the Herculean task of mucking out the Augean Stables – a/k/a “draining the Swamp” --For the fifth labor, Eurystheus ordered Hercules to clean up King Augeas' stables. Hercules knew this job would mean getting dirty and smelly, but sometimes even a hero has to do these things.” -- and unrigging the System -- it’s Kudlow.

Will he succeed?

Good luck and Godspeed, Larry Kudlow.
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Ralph Benko is an advisor to nonprofit and advocacy organizations, is a member of the Conservative Action Project, a contributor to the ARRA News Service. Founder of The Prosperity Caucus, he was a member of the Jack Kemp supply-side team, served in an unrelated area as a deputy general counsel in the Reagan White House. The article which first appeared in Forbes.

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