Nobody knows whether we’re headed for a recession. Even those who are the most bearish on the economy aren’t saying it’s a 50-50 shot — just that it’s an increasing possibility.
Kudlow added for good measure when pressed: “No, I don’t see a recession.”
The problem is that the last time we had a recession, Kudlow was saying much the same thing. And that’s not even his most recent wayward prediction about the economy. Those predictions have persisted after he assumed the position of great power he now has.
As was widely noted Sunday after Kudlow’s interview, his consistent misses on the 2008 economic crash were some of the more remarkably bad predictions.
“Bush Boom Continues,” read a December 2007 headline on a Kudlow column in the National Review. Added the headline underneath: “You can call it Goldilocks 2.0. But you can’t call it a recession.”
In another version of the story, Kudlow elaborated:
There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told.
When signs of trouble increased, Kudlow doubled down in a column in February 2008: “I’m going to bet that the economy will be rebounding sometime this summer, if not sooner,” he wrote. “We are in a slow patch. That’s all. It’s nothing to get up in arms about.”
Even as late as July 2008, Kudlow’s rose-tinted glasses remained firmly in place. He said he saw “an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery.” Foreclosures kept surging, though, and stocks kept tumbling.
When Kudlow was appointed by Trump, The Washington Post’s Dana Milbank and New York’s Jonathan Chait documented a number of other times Kudlow’s predictions were badly off-base. But what has gotten less attention is that this tendency has persisted into his time in the White House.
Back in June 2018, Kudlow saw a declining deficit. “The deficit, which was one of the other criticisms, is coming down — and it’s coming down rapidly,” Kudlow claimed. “Growth solves a lot of problems.”
The problem was that the deficit wasn’t coming down, much less rapidly. So Kudlow clarified to CNBC’s Eamon Javers that he was making a prediction. “I was referring to future deficits,” he said, adding, “I think it will come down in 2018, and the big reductions will come in future years.”
This, yet again, has not come to pass. The deficit rose a full 17 percent in fiscal year 2018, to $779 billion, as projections suggested it was headed toward $1 trillion. That path has continued this year, and, in fact, the rate of growth has increased. So not only did the deficit not “come down in 2018,” but it almost definitely won’t come down in 2019. Any reduction in the deficit appears years away, if it ever happens during Trump’s tenure.
Kudlow also predicted in January 2018 that the GDP would grow to between 3 percent and 4 percent based on the GOP tax cuts. Since then (and including preliminary estimates for the last quarter), it has grown by 2.5 percent.
In April 2018, he said the GDP could hit 5 percent for at least a short period of time. The highest quarterly GDP growth since then was 3.5 percent.
To some degree, this is now Kudlow’s job. He’s a cheerleader for Trump’s economic policies, in addition to being his strategist. But even spokespeople should have their rosy predictions parsed carefully and their credibility adjusted accordingly. And when Kudlow provides such reassuring predictions, it’s difficult to be too reassured — judging by both his record before his time in the White House and since.