Milbank: U.S. economy is ‘crushing it,’ until it crushes us

Should we be concerned that Trump’s economic advisor is saying the same things he said in 2008?

By Dana Milbank

After the Dow Jones industrials plunged 832 points on Wednesday, Larry Kudlow, President Trump’s chief economic adviser, walked up the White House driveway and proclaimed that there was no cause for concern. Not about the stock market, or turmoil in China’s economy, or American casualties of Trump’s trade fights, or the president’s attempt to bully the Federal Reserve into an easy-money stance.

“Our economy and the people and the workers and entrepreneurs, they’re killing it. We’re the hottest in the world,” Kudlow proclaimed in front of the CNBC camera. “We’re crushing it right now, and I think that’s going to continue regardless of China.”

Kudlow, standing outside the West Wing, offered versions of this happy talk — “I don’t think this is anything resembling a sugar high … America is on a tear” — to any other reporter who would listen.

But the Pollyanna performance didn’t play well on Wall Street. The Dow lost another 546 points Thursday. The index had a partial recovery Friday but finished the week down 4.2 percent, the third straight weekly decline.

Maybe that’s because investors had heard Kudlow say such words once before.

Ten months before the crash of 2008: “There’s no recession coming.”

Seven months before the crash: “The economy will be rebounding sometime this summer, if not sooner.”

Six weeks before the crash: “An awful lot of very good new news.”

Markets rise and markets fall, and this last week’s volatility doesn’t necessarily mean the economy will tank. But it does show the limits of Trump’s hucksterism.

Though Trump called the stock market a “bubble” during the campaign, he has boasted scores of times about new records it has set during his presidency. On Saturday, he told a crowd: “Your 401(k)s, you all look like a bunch of geniuses — thank you, Donald, very much.” So far, that has worked, because economic growth has continued under Trump, and indeed accelerated after the massive stimulus of a tax cut and spending increase. Republicans would otherwise be facing bigger losses in next month’s midterms.

But now come scattered signs of trouble. The Fed has been raising interest rates — in part because Trump’s massive stimulus during an expansion threatens to set off inflation. China’s economy has been unstable, in part because of Trump’s trade dispute.

And though the trade deficit with China hit a record in September, Trump’s tariffs have hurt many U.S. producers; Ford, claiming the tariffs cost it $1 billion, is planning workforce cuts.

No amount of fact-checker Pinocchios will stop his followers from accepting Trump’s word that Robert Mueller is on a witch hunt, global warming is a hoax, North Korea no longer is a nuclear threat and Democrats are a dangerous mob. But they can feel the economy personally. When the downturn comes, huge deficits, which Trump widened, will leave the federal government with little power to cushion the fall. If this happens on his watch, even Trump’s ardent supporters would see it’s not fake news — and that would be the end of him.

Trump needs reassurance — and Kudlow, the former TV business pundit, now plays the carnival barker’s carnival barker.

With cameras in the room for a prescription-drug bill signing Wednesday, Trump introduced “the great Larry Kudlow, whose voice is so beautiful. … The economy, Larry, how is it doing?”

“Couldn’t be better,” replied Kudlow.

And Kudlow’s message couldn’t be otherwise:

Oct. 7: “Right now, the American economy is crushing it.”

Sept. 28: “We’re crushing it, we’re absolutely crushing it.”

Sept. 17: “We’re crushing it.”

Sept. 6: “We’re crushing it.”

Aug. 28: “America today is just crushing it everywhere.”

Aug. 17: “We are crushing it. And people say this is not sustainable, it’s a one-quarter blip? It’s just nonsense.”

In Thursday’s interview, Jim Cramer, Kudlow’s former partner on CNBC, tried to temper Kudlow’s mania. Cramer cautioned about a slowdown in business in key economic sectors, a peak in real estate, slower lending, declining demand for luxury goods; “a pastiche that I’m concerned about.”

Kudlow brushed off the worries. “I’m just saying there’s so much good news out there that we shouldn’t just try to find a couple of numbers that don’t look great, OK?” he said. “This is a heck of a story. Let’s embrace it.”

Sound familiar? “The Bush boom is alive and well,” Kudlow said before the 2008 crash, calling the soon-to-collapse economy “still the greatest story.”

Until it wasn’t.

Follow Dana Milbank on Twitter @Milbank.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

Scott Spahr, Generation Engineering Manager at Snohomish County PUD, points to a dial indicating 4 megawatts of power production from one of two Francis turbine units at the Henry M. Jackson Powerhouse on Friday, Feb. 17, 2023, near Sultan, Washington. Some of the water that passes through units 3 and 4 — the two Francis turbines — is diverted to Lake Chaplain, which supplies water to Everett. (Ryan Berry / The Herald)
Editorial: Amber King best suited for PUD’s 2nd District seat

Among three solid candidates, King’s knowledge of utilities and contracts will serve ratepayers well.

toon
Editorial cartoons for Monday, July 22

A sketchy look at the news of the day.… Continue reading

Brooks: Democrats must provide an answer to MAGA’s promises

For Democrats to succeed, they need to offer people a future of both security and progress.

Krugman: For Trump, once again, it’s carnage in America

Ignoring the clear decline in crime rates for much of the country, Trump basks in thoughts of mayhem.

Krugman: It’s not just Trump that J.D. Vance has flipped on

The GOP’s vice presidential nominee has shifted position on the white working-class folks he came from.

Comment: Blaming media a poor repsonse to political violence

Conspiracy and violent rhetoric holds no specific party identification but seeks only to distract.

Former President Donald Trump, the presumed Republican presidential nominee, speaks during a campaign event in Doral, Fla., July 9, 2024. The Biden campaign has attacked Trump’s ties to the conservative policy plan that would amass power in the executive branch, though it is not his official platform. (Scott McIntyre/The New York York Times)
Comment: Project 2025’s aim is to institutionalize Trumpism

A look at the conservative policy behind Project 2025 and the think tank that thought it up.

Vote 2024. US American presidential election 2024. Vote inscription, badge, sticker. Presidential election banner Vote 2024, poster, sign. Political election campaign symbol. Vector Illustration
Editorial: Return Wagoner and Low to 39th Disrict seats

‘Workhorse’ Republicans, both have sponsored successful solution-oriented legislation in each chamber.

A law enforcement officer surveys the Fiserv Forum in Milwaukee, the site of the Republican National Convention, on July 14, 2024. (Haiyun Jiang/The New York Times)
Editorial: Weekend’s violence should steel resolve in democracy

Leaders can lower the temperature of their rhetoric. We can choose elections over violence.

toon
Editorial cartoons for Sunday, July 21

A sketchy look at the news of the day.… Continue reading

Forum: How much do we really know about ‘bus stop people’?

Our assumptions about people, often fall short of accuracy, yet we justify our divisions based on them.

Voters left with poor options for president

The recent televised debate between former President Trump and President Biden, was… Continue reading

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.