Larry Kudlow got blindsided in 2017 when President Trump was putting together his White House staff. He was a Trump loyalist, having announced his support at approximately the moment Trump announced his candidacy. And he and his partner Stephen Moore—both longtime advocates of supply-side, or growth, economics—had crafted Trump’s tax cut plan during the campaign. It’s the plan that went on to become the framework for the sweeping tax measure enacted in December.
Kudlow appeared wired to become the top economic adviser at the White House, a job that would put him in closer proximity to the president on a daily basis than either the Treasury secretary or the chairman of the Council of Economic Advisers. Everything seemed to be in place. Then Kudlow didn’t get the job.
One day during the transition, Jared Kushner brought a friend by Trump Tower to introduce to his father-in-law. His name was Gary Cohn. He was the COO of Goldman Sachs. Trump was smitten. He suggested Cohn would make a great Treasury secretary, except that job had been taken by Steven Mnuchin. Cohn got the White House economic job.
If Kudlow was crushed, he never let on. But when Cohn resigned two weeks ago, it was clear Kudlow was still interested in the job. Only this time, he would take nothing for granted, not his two-decade relationship with Trump, not his work on the tax plan. Kudlow would fight.
And that meant an effort—a campaign of sorts—to persuade the president to pick Kudlow, 70, was needed. His friends and allies stepped in. They recruited people Trump knows to send him word of their strong support for Kudlow. The tactic succeeded.
An influential endorsement came from Harold Hamm, the Oklahoma oil man, a Kudlow associate said. Hamm is one of Trump’s closest friends. Trump listens to him. When he asked Trump to nominate Oklahoma attorney general Scott Pruitt to head the Environmental Protection Agency, Trump said yes without hesitation. Vice President Mike Pence, by the way, is also said to be in Kudlow’s corner.
The Wall Street Journal, which Trump reads, was another key backer. Its editorial page urged the president to stay away from Christopher Liddell, whom it called “the leading candidate to replace Gary Cohn.”
Liddell has been the White House director of strategic initiatives and worked with Jared Kushner’s Office of American Innovation. If Trump chooses Liddell, the Journal said, “he’ll be elevating a former corporate executive without strong free-market views who is unlikely to counter the growing clout of the antitrade corporatists in the Administration.”
That probably would have finished Liddell’s chances, but they may have already vanished. The day before the editorial ran, Trump called Kudlow to talk about the job, officially known as the director of the National Economic Council (NEC). Two days after that, he offered Kudlow the job.
As it turns out, the president may have been mulling an NEC succession for some time, since Cohn’s departure had been anticipated for weeks. A hint of that occurred in late February when the president spoke to Steve Moore at Mar-a-Lago, Trump’s Miami club. “You and Larry were with me from the start, and I want you to know I’ll always remember it,” Moore quoted Trump as saying. Kudlow was on his mind.
Kudlow’s career should make him a good fit at the NEC, which combines economics and politics. He was David Stockman’s economic adviser in the Reagan days, worked on Wall Street, and hosted a CNBC business show on which he often interviewed Trump.
He has a far different style from Cohn. Kudlow knows scores of Republicans in Congress, likes to schmooze with them, and is an architect of a tax cut they love. He’s also likely to emerge as one of the few Trump aides who gets along with Democrats. As such, he should be an effective salesman and negotiator for Trump. The lingering question is his ability to run the NEC. Management is not his long suit.
Cohn, a Democrat, wasn’t popular on Capitol Hill. But he was a strong manager and lured a team of talented economic and financial experts to the NEC. Cohn isn’t a Washington type. Kudlow is, or at least acts likes one. He’ll be on TV a lot. Cohn wasn’t.
Megan McArdle wrote in the Washington Post last week that those who expect Kudlow’s arrival at the White House to “matter much” are mistaken. In one sense, she’s right. Big things needed to be done when Trump took office, and more have been (tax cuts, deregulation wave, conservative courts, military buildup) than not (health care). Immigration is on hold.
Kudlow doesn’t have the burden of cajoling the president into changing economic policy. Trump has already done that and it shows. Those who sneer at Kudlow because he lacks a Ph.D. ought to explain why the policies of Obama’s Ph.D.-laden advisers failed so badly for eight lean years.
I think Kudlow matters. His task is to try as best he can to advise the president how to stay on course. He doesn’t decide the course. That is Trump’s task.
