Kudlow and Company
(updated below w/ video)
According to the National Bureau of Economic Research (NBER), the U.S. economy officially entered a recession in December of 2007.
Here's what the National Review's resident economic expert, Larry Kudlow, had to say at the time--in a December 2007 post at The Corner.
UPDATE: If you haven't seen this video clip of financial predictions from various Fox News financial "experts," it's definitely worth your time. It really should be required viewing. Peter Schiff, the only person who was even close to right, is repeatedly greeted with smug condescension from people like Ben Stein, Arthur Laffer, and Charles Payne, who are busy telling viewers to buy stock in financial companies (all of which is now essentially worthless).
According to the National Bureau of Economic Research (NBER), the U.S. economy officially entered a recession in December of 2007.
Here's what the National Review's resident economic expert, Larry Kudlow, had to say at the time--in a December 2007 post at The Corner.
There is no recession. Despite all the doom and gloom from the economic pessimistas, the resilient U.S economy continues moving ahead—quarter after quarter, year after year—defying dire forecasts and delivering positive growth. In fact, we are about to enter the seventh consecutive year of the Bush boom.It's been obvious for a long time, of course, that Kudlow is a fool. The fact that he continues to be one of the leading voices on economic issues at the most respected conservative publication says all you need to know about the state of intellectual decay on the Right.
The pessimistas are a persistent bunch. In 2006, they were certain a recession was just around the corner. They were wrong. Instead, the economy posted two consecutive quarters of near or above four-percent growth.
Earlier today, a doom and gloom economic forecast from Macro Economic Advisors was released predicting zero percent growth in the fourth quarter. This report is off by at least two percentage points. These guys are going to wind up with egg on their faces.
UPDATE: If you haven't seen this video clip of financial predictions from various Fox News financial "experts," it's definitely worth your time. It really should be required viewing. Peter Schiff, the only person who was even close to right, is repeatedly greeted with smug condescension from people like Ben Stein, Arthur Laffer, and Charles Payne, who are busy telling viewers to buy stock in financial companies (all of which is now essentially worthless).
posted by A.L. at 1:35 PM
26 Comments:
"respected conservative publication"
If we assume those words actually belong together in that sequence, does NR actually fit that description any more than, say, The American Conservative does?
According to the National Bureau of Economic Research (NBER), the U.S. economy officially entered a recession in December of 2007.
Here's what the National Review's resident economic expert, Larry Kudlow, had to say at the time--in a December 2007 post at The Corner.
It's been obvious for a long time, of course, that Kudlow is a fool. The fact that he continues to be one of the leading voices on economic issues at the most respected conservative publication says all you need to know about the state of intellectual decay on the Right.
So, the NBER says the recession started in December, 2007. Kudlow is quoted from December, 2007, a year before the NBER put out its report. Here's what else is in the NBER report:
"The economy reached a peak in December and has been declining since, according to the business cycle dating committee of the NBER."
Based on this, Kudlow wasn't wrong in December, 2007, was he? Plus, the economy expanded for the first two quarters of this year, despite the problems.
From the NBER report:
"The committee does not judge a recession as two consecutive quarterly declines in gross domestic product;..."
Yet, in general, most economists still usually define a recession as an economy with a decline in growth for two consecutive quarters (as defined at BusinessDictionary.com and a Duke University professor of business, via Bloomberg). I'm sure the NBER have their reasons for using alternative data for determining when a recession starts, just as other economists use the general rule for determining the same thing. I have no doubt both are right, and that the NBER made a more thorough determination with their numbers than others have. Except that the NBER didn't issue anything until today.
To judge Kudlow a fool on what he said last year based on what the NBER said today (which took a year to say) is a real stretch of logic. That is, if one were actually being fair-minded about such things. Which isn't what is going on here.
When it comes to economics, I think I'd listen to an economist like Kudlow before listening to a lawyer.
Steve, forget the quibbling over recession or no, just take this statement (referring to 2008):
In fact, we are about to enter the seventh consecutive year of the Bush boom.
There are any number of reasons to declare Kudlow a fool, this is simply one of them. When it comes to economics, you'd better off listening to anyone rather than Kudlow.
As I mentioned, Crusty Dem, the economy did expand for the first two quarters this year. And in that regard, Kudlow was correct.
Again, how could Kudlow be called a fool for what he said in December, 2007 when for the next two quarters he was right?
Now, if anyone can find something from Kudlow that has come out in the last two quarters (the second of which is not over yet) that is equivalent to what he said last year, then that would be something else, and the idea that Kudlow is a fool has merit. But not based on what is documented here.
Stevell
This quote was in the same Kudlow post
"There's no recession coming. The pessimistas were wrong. It's not going to happen."
Thats a pretty black and white statement and he was one hundred percent wrong. Yet has he admitted he was wrong? No and he never will.
Kudlow was a frequent panelist on The McLaughlin Group for years. At the end of the show, all were required to make a prediction.
If failed predictions define "fool", Kudlow has earned the title.
Speaking of fools, thanks, Steveil, for speaking and removing all doubt.
And now Kudlow is saying that, thanks to the recession, our economy will be stronger than ever. Intelligent people take note: lower your expectations now, beat the rush.
I personally found Kudlow's BFF Luskin, who wrote an OpEd in the WaPo in early September (wherein he claimed that pessimism was the only problem) absolutely hilarious.
If you get your investing or economic advice from these people, you are going to end up in a food-shelf line before long.
If you get your investing or economic advice from these people, you are going to end up in a food-shelf line before long.
Uh-huh. As opposed to the liberals in Congress, along with that idiot Paulson, who said there wasn't a crisis brewing before it all blew up in all our faces, right?
Maybe I should take my financial advice from those advising The One:
Fannie Mae thieves Jim Johnson, Franklin Raines, and Jamie Gorelick
The guy who bankrupted Citibank, Robert Rubin
Convicted real estate magnate Tony Rezko
Whorehouse property owner Barney Frank
Countrywide "Friends of Angelo" Chris Dodd, Kent Conrad (and Jim Johnson again)
Tax evader (and writer of tax laws) Charley Rangel
Yeah, I could take financial advice from these people. Unlike The One, who is protected from all scrutiny, as are most of these people (with the exception of Rezko), I'd end up in jail.
We all know that Kudlow invents his own logic and justifications to serve his own agenda, as do a lot of "economists". It is in this light that his statements should always be seen. It just so happens that Kudlow, in essence, is an anarcho-capitalist, whose ideology has created untold suffering in this country.
It is because of people like him that there are 50 million people without health insurance, and that 12 million people per day experience hunger in this country. People like Kudlow are responsible for the almost complete absence of a social safety net for Americans, which, I promise you, you will notice in the months to come.
According to Keynes, the root cause of an economic downturns is an insufficient aggregate demand. When the total demand for goods and services declines, businesses throughout the economy see their sales fall off. Lower sales induce firms to cut back production and to lay off workers. Rising unemployment and declining profits further depress demand, leading to a feedback loop with a very unhappy ending.
90% of the time you can make statistics show whatever you want 50% of time
http://nomedals.blogspot.com
Kudlow isn't a serious economist. He has little relevant economics training (he dropped out of his grad program) and his work record is entirely at places where sycophantic supply-side cheerleading is prized over knowledge and accuracy. That makes him an economist" in the same sense fanatics degreed by the Institute for Creation Science are scientists.
"Bush boom?" That must be the demented flip-side to Hannity's "Obama recession."
The phrase "Bush boom" is missing the middle word "ka".
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AL
I agree that people who made spectacularly wrong predictions (with apparent 100% confidence)about the market look foolish. But were they foolish because they were wrong or because they chose to make predictions in the first place? If you say the former, perhaps you would like to share your market predictions for 2009 so that we can judge you at the end of the year.
Also, I am curious as to why you suggest that Peter Shiff was only "close to being right." From what I heard, he seemed to be spot on. In fact, one could have made a ton of money shorting finanical stocks if one had only followed his advice. Which I assume you did.
one could have made a ton of money shorting finanical stocks if one had only followed his advice. Which I assume you did.
I sure did, and made a boatload of money.
MLS,
Who forced idiots like Kudlow and Luskin to make predictions? (Predictions that, now that we can evaluate them, are laughable, as A.L. has pointed out -- so long as we didn't base investements on them.)
Kudlow got paid for making them. He made them happily, eagerly. He deserves the result.
Isn't your request for financial or economic predictions from A.L. idiotic, both from A.L.'s standpoint (what will you pay him for the prediction?) and from yours (you'd be rather stupid to act on the unpaid economic advice of a lawyer, wouldn't you?)
If you say the former, perhaps you would like to share your market predictions for 2009 so that we can judge you at the end of the year.
I have no idea what the market's going to do in 2009. But I don't hold myself out to be an economic expert, much less go on tv and tell people what to do with their money. That's a big difference. These idiots had no idea what they were talking about, yet they went on tv repeatedly and opined authoritatively about the direction of the economy (while condescending dismissing a guy who turned out to be absolutely right). There should be some accountability for that. People who listened to these bozos lost a lot of money.
As for Schiff, the reason I didn't give him perfect prescient points was that he said some stuff about the price of gold and commodities (and inflation) that, at least so far, hasn't borne out. It may yet, though. Time will tell.
Pretty sure it was this summer when Mr. Kudlow did his "not now, not ever" show on whether we were in a recession, and berated about 3people that disagreed with him. To call this guy an idiot is to overestimate his capabilities, he is a danger to the American people. Along with his other un-American buddies like Limbaugh.
C2H50H-Who forced idiots like Kudlow and Luskin to make predictions?
Well, nobody. But if you spend any time watching CNBC you will hear thousands of market predictions, at least half of which will turn out to be spectacularly wrong. For example, if you were watching in July, when oil hit $147 a barrel, you would have heard a wide variety of predictions about where the price was going, but few, if any, that were close to what has actually happened. That doesn’t make those people, many of whom spend their whole lives tracking the oil market, idiots. Anyone who believed that these predictions were anything more than educated guesses, on the other hand, . . . .
C2H50H- Isn't your request for financial or economic predictions from A.L. idiotic, both from A.L.'s standpoint (what will you pay him for the prediction?) and from yours (you'd be rather stupid to act on the unpaid economic advice of a lawyer, wouldn't you?)
I don’t know where you got the idea that I was planning to trade on AL’s advice. I did think about entering his picks in the CNBC portfolio challenge, though.
AL- I have no idea what the market's going to do in 2009. But I don't hold myself out to be an economic expert, much less go on tv and tell people what to do with their money.
But you don’t need to be an economic expert. All you have to do is identify the non-idiotic economic expert who can tell us what the market is going to do. Surely the incoming administration is teeming with such geniuses.
MLS,
If you aren't prepared to make honest use of predictions, then asking for them is simply dishonest.
Predicting the price of a volatile commodity like oil, in the face of all the things which govern that is difficult. Predicting that the housing bubble was going to burst was predicted by a lot of people -- and they also predicted that it would drive the country into deep recession.
I sat back watching this, but have to get this in.
First off, predicting market prices or stock prices is the same as predicting the weather; it's a guess. Some guesses are more educated than others, but it's still a guess. Nobody buys into stock, mutual funds, or commodities without thinking that buy is going to make them money. They buy into those things guessing they will. Sometimes it works, sometimes it doesn't.
Second, for four years since 2004, Democrats, helped by the mainstream media, had been publicly saying how horrible the economy was, even though the economy was booming all the way up until the last month of 2007 (I'm talking the economy in general, not bits and pieces of it). Democrats kept that meme going even after winning back the majority in Congress in 2006, and even though it would still be another 13 months before a recession was finally upon us (and it took the NBER a year after that to confirm it; talk about "armchair quarterbacks"). If someone was to predict a recession was coming, that is a no-brainer since these kinds of things are cyclical. Here's a little game: I predict there will be a boom in the economy down the road. I have no idea when it will happen, but it will happen. Based on the arguments made by the liberals here, I am an utter genius in economics, or will be proven one when the economy does improve. There; I'm as smart as Peter Schiff. Tell me liberals, is that how it works? (By the way, based on Schiff's performance in the provided video, he definitely is someone worth listening to. However, there aren't any specific dates on when these video snippets came out, other than they came out in 2006 and 2007. Plus, Schiff isn't completely right on all of what he said, although it was pretty good. One other thing; the housing market is now a buyer's market, providing banks loans can be gotten.)
And now, liberals and Democrats are glad-handing themselves because someone made the recession official, even though the recession took three years to start from the time Democrats began their whining in late 2004, and confirmation took another year.
By the way, Democrats took over Congress in January, 2007, and the recession started in December, 2007. Since conservative economists are considered fools here because they kept predicting increased improvement in the economy, that must mean that liberals somehow knew things were going to get worse. If that is the case, and congressional Democrats, being liberals, knew how bad the economy was going to get, how come they did absolutely nothing to try to prevent it? And they did absolutely nothing. Or was it more likely the case that congressional liberal Democrats had as much insight into all of this as conservatives, meaning they had no special insight since figuring what is going to happen with the economy is nothing more than a guess?
Nobody listens to only one person when it comes to improving their own finances. It takes researching the opinions of many economists and experts and figuring which ones are the most successful doing what they do, since their success can be turned into another's success. But it's still a guess, and never a sure thing.
The NBER didn't predict a recession was coming, but confirmed after the fact that it had been going on for a year based on historical data on events that already happened. That's easy to do; say something is going on after the fact. Yet, Kudlow is considered a fool here by the liberals.
democrats began "whining" about the recession 3 years ago because it affected us middle class workers then. perhaps you can provide evidence that the economy grew; but everyone i knew made the same money while costs of basic living supplies increased. couple this with extremely high gas prices, and shitty healthcare system, and you have a recession.
as far as the dems not fixing the problem, i think that is a good point; however, the reps had many years to deregulate the system, start wars, and run amok, now its the democrats fault for their ineptitude at cleaning up republican messes?
"Since conservative economists are considered fools here because they kept predicting increased improvement in the economy, that must mean that liberals somehow knew things were going to get worse."
I think liberal economists have been pointing out that the "Bush Boom" extended only to the people at the top. The middle-class found their spending power diminishing. Schiff pointed out a related truth - the economy was not becoming more productive in the sense of having more, better or cheaper goods for sale on the world market. It was based on financial "products" that assumed ever-increasing housing prices. Such an economy was like the 16th century market in Dutch tulip bulbs, and like that market it crashed. Just like people will lose interest in tulip bulbs, a bubble market is just another pyramid scheme - eventually investors in the base commodity (houses in this case) will find the price of entry too high, or the returns low or nonexistent, or the risks unacceptable, and so the housing market ran out of steam.
You could say that the housing bubble only masked the fact that the US economy was in serious crisis from about 2002-2003 on. From the end, of the telecom boom, in fact.
Paul Krugman is an economist who pointed out that the "Enron economy" was bust even before 2006. You can read it in his book "The Great Unravelling; From Boom to Bust in 3 years". And that was published in 2004.
SteveIL asked... Again, how could Kudlow be called a fool for what he said in December, 2007 when for the next two quarters he was right?
Because he ignored the fact that the Case-Shiller index was running 50% above historic highs. (Nope, no real estate bubble here.)
Because he ignored the evidence of mounting defaults.
Because he ignored what many other level-headed people pointed out, the fact that ARMs were going to reset at much higher rates.
Because he ignored the fact that the debt derivatives market had a paper value that was an order of magnitude above the underlying debt that held it up due to phony insurance and packaging. (It ain't "insurance" if the insurance company can't back it up.)
Try reading Barry Ritholtz. He saw this coming for years and when he made predictions (a bit early, it turned out), he accompanied them with something those of us in the reality-based community call "REASONS".
On Tuesday, Kudlow had Greg Mankiw (former CEA Chair (think Chistina Romer's position) from the Bush administration) and it was incredibly obvious how much Kudlow tried to set the tone of the piece. Despite what people say, Mankiw is an overall good economist. He has produced very good research. While he is often regarded as right-oriented, he is not a die-hard supply-sider. It is important to have some classicist and Austrian (a la Peter Schiff) thoughts to delute/balance keynesian thoughts. All schools are not the definitive answer. In this video, it is incredibly obvious how Kudlow tries to get Mankiw to imply solving the crisis through right-oriented ideology. He cites keyesian flaws such as crowding out private investment that are very conditional on market conditions (it's not a general given). Even conservative UChicago faculty like Gary Becker and other Milton Friedman types wouldn't blatantly say their classicist ideas will definitively resolve the crisis perfectly. Kudlow always blindly sticks to ideology without even vetting it or applying it to particularly case.
http://www.cnbc.com/id/15840232?video=948387815
Everytime I watch CNBC pundits, I just cringe. Jim Kramer should not be allowed to give trading advice on national television. He has one of the worst performing portfolios. He is nothing but a speculator at best.
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