Art Cashin: Wall Street sees Tillerson exit as an ongoing soap opera in Trump White House

Art Cashin: Wall Street sees Tillerson exit as an \ongoing soap opera\ in Trump White House
The Next Economic Point Man?
If President Trump really does pick CNBCs Larry Kudlow to replace former Goldman Sachs exec Gary Cohn as director of the National Economic Council, hell have gotten someone who will give him pretty much the same advice but is much more willing to publicly say what Trump wants him to.

Kudlow, you see, is as standard a Wall Street Republican as youll find. He believes in the Reaganite Holy Trinity of low taxes, low inflation and free trade. He believes in them so much that hes spent the better part of the last 20 years proclaiming them on TV and radio. If that — minus the whole media personality part — sounds a lot like Cohn, thats because it is. The two of them have spent the past year and a half saying almost exactly the same things.

Since the announcement of Cohn’s resignation, several names have been floated for his replacement: Christopher Liddell, a former General Motors and Microsoft executive who works with Trump’s son-in-law Jared Kushner in the White House Office of American Innovation, has been mentioned. So has White House adviser Peter Navarro, who favored the tariffs but has said he’s not in the running, according to Reuters. (On Sunday, the Wall Street Journal’s editorial board wrote a scathing op-ed on Liddell and his stance on free trade.)

The Next Economic Point Man?

[ Trump signals Larry Kudlow is the leading candidate to replace Gary Cohn ]

Like Cohn, Kudlow thinks that Trumps corporate tax cuts are going to supercharge the economy so much that the whole thing will pay for itself, despite the fact that the nonpartisan Joint Committee on Taxation, much like every other mainstream forecaster, estimates that its going to add at least $1 trillion to the nations debt. And also like Cohn, Kudlow has said that Trumps tariffs are a bad idea that show a crisis of logic since they are really tax hikes on Americans.

Investors and economists are closely watching the pick, as it could indicate the direction of Trumps economic agenda, particularly now with trade. Cohn was seen as a free-trade advocate who pushed back on Trumps desires for large tariffs and trade restrictions, and a replacement favoring trade barriers could set off concern that Trump will lean into his protectionist tendencies.

The biggest difference between them is that Kudlow is much more willing to spin things when theyre not going like he hopes. He always has been. Back in 2005, when fear of a housing bubble was beginning to cast doubt on President George W. Bushs economic accomplishments, Kudlow said that all the bubbleheads who expect housing price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market were dead wrong.

Kudlow, who has been critical of Trumps approach to trade, recently blasted the presidents decision to impose broad tariffs on imports of steel and aluminum. If he is selected, Kudlow is likely to fill a void of pro-free-trade advocates that has developed in the White House over the past few months.

Video: Trump close to tapping Larry Kudlow to succeed Cohn: Reports

Two years later, when everything he said wouldnt happen was happening, he dismissed it again.

Conservative commentator and economic analyst Larry Kudlow speaks on the set of CNBC at the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 8, 2018 in New York. Kudlow is being floated as Gary Cohns replacement as national economic advisor.

Video: Andy Puzder on replacing Gary Cohn: I havent had contact with White House

[ Speaking as a friend only: The odd media moment when Jim Cramer named Larry Kudlow to become Trumps top economic adviser ]

Video: Trumps possible new top economic adviser hates tariffs

Theres no recession coming, Kudlow wrote, which was especially poor timing given that economists would later decide this was exactly the moment the recession had begun. To admit otherwise would be to admit that Bushs combination of tax cuts and deregulation hadnt worked, and Kudlow wouldnt do that. So instead he looked for any evidence, no matter how unconvincing, that the Bush boom is alive and well.

Its a pick that Wall Street will probably like, but its also one that might be at odds with the increasingly protectionist economic stance that Trump has taken lately.
The Next Economic Point Man?
The Next Economic Point Man?

Its this ability to explain every inconvenient fact away that makes a free-trader like Kudlow a good match for a protectionist like Trump. Indeed, Kudlow has already tried to argue that these arent tariffs so much as negotiating tactics, and, as such, his hats off to Trump for his cunning.

Trump: Kudlow has good chance to become top economic adviser
Trump: Kudlow has good chance to become top economic adviser

Its part of what separates Kudlow from Cohn, Kudlows longtime friend and frequent collaborator Stephen Moore told the Wall Street Journal: his steadfastness. Larry would be loyal to the president when the decision is made, Moore said, so even if he doesnt really agree with that decision, such as tariffs, hed be willing to stand by the guy you work for.

What Larry Kudlow thinks about trade, taxes, stocks and recessions

So if Kudlow gets the job, well get a White House that makes unrealistic promises about the tax cuts it believes in and the tariffs it doesnt. A White House that, as National Trade Council Director Peter Navarro put it recently, believes its job is to provide the analytics that confirm Trumps intuition, since his intuition is always right in these matters. A White House that tries to act like 280-character outbursts are coherent policy.

WASHINGTON—President Donald Trump said Tuesday he is very strongly considering naming CNBC commentator Lawrence Kudlow to replace Gary Cohn as director of the National Economic Council.

Trump says “very good chance” for Kudlow to be next economic adviser

Two senior administration officials said Tuesday they believed Mr. Kudlow was the presidents likely choice for the job and that a decision could be finalized within days.

Trump Says He Is Very Strongly Considering Kudlow to Replace Cohn
Trump Says He Is Very Strongly Considering Kudlow to Replace Cohn

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