The new old hacks..

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On Feb. 25, Larry Kudlow, director of the White House’s National Economic Council, suggested it was a good time to buy stocks. “The virus story is not going to last forever,” Kudlow said on CNBC around 2:30 p.m. “To me, if you are an investor out there and you have a long-term point of view, I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.” At the time, the S&P 500 (^GSPC) index was around 3,128. Two weeks later it closed at 2,746. If you took Kudlow’s advice, you were the dumb money buying in a selloff. You’d be down more than 12%...

Kudlow couldn’t have known all this, right? Shouldn’t he get a pass for an innocent mistake? How about no. Kudlow’s recommendation came with stocks down 7.6% from their peak, which might sound like a nice dip-buying opportunity in normal times. But this was at a time when the coronavirus death toll in Italy hit double digits, the mayor of San Francisco declared a state of emergency and public health experts were warning of an exponential spike in infections. The volatility index (^VIX) which measures uncertainty in financial markets, had doubled in a week and was well into the range often associated with market turmoil.

Kudlow, 72, is not an economist, even though he served as “chief economist” at investing firm Bear Stearns in the 1980s. Kudlow was a successful Wall Street salesman who capitalized on an upbeat personality to land a job as a commentator and show host at CNBC, starting in 2002, which made him famous. He’s a fervent supply-sider favoring tax cuts and laissez-faire policies as the best path to a strong economy, one reason Trump tapped him to replace Gary Cohn at the White House in 2018.

Kudlow has produced some famously bad predictions, however. “Larry Kudlow is usually wrong and frequently absurd,” housing analyst Bill McBride, who pens the Calculated Risk blog, wrote in 2016. In 2005, for instance, Kudlow, argued that “bubbleheads” predicting real estate crashes in Las Vegas and Florida were “dead wrong.” Kudlow turned out to be dead wrong. An epic housing bust began right around that time, with gigantic losses in Las Vegas and Florida. In 2007, Kudlow wrote, “there is no recession.” In reality, a terrible recession began that very month.

Kudlow was one of several Trump officials who predicted the 2017 Republican tax cuts would produce a surge of economic growth, perhaps hitting 4% for the first time since 2003. It hasn’t happened. Growth under Trump peaked at 3.3% in the second quarter of 2018 and drifted down to 2.3% by the end of last year. Most economists think the economy was growing at around 2% before the coronavirus crisis, which will undoubtedly slow the economy.

America’s worst financial adviser

• Kudlow continuing where he left off..
  

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Former Reagan administration economist Arthur Laffer has a new plan to shore up an economy that’s been ravaged by the coronavirus pandemic, which he laid out in an interview with Reuters published Wednesday.
Laffer, the designer of the Reagan-era tax cuts and a pioneer behind the controversial notion that slashing taxes unleashes economic growth, is calling for these three actions:

• Impose taxes on non-profit organizations that encourage the arts and education, among others.
  
• A 15% pay cut to the taxpayer-funded salaries of government officials and professors.
  
• Enact a payroll tax cut holiday for employees and businesses until the end of the year.
  

Laffer also told Reuters that he opposed to the recent expansion of unemployment aid under the $2 trillion coronavirus stimulus law. He argued it would actually serve to discourage people from working and inflict more pain on the economy.
“If you tax people who work and you pay people who don’t work, you will get less people working,” Laffer said. “If you make it more unattractive to be unemployed, then there’s an incentive to go look for another job faster.”

Laffer has been mentioned as a possible pick to head Trump’s second coronavirus task force focused on reopening the economy, Reuters said. And he’s pitched his plan to top White House officials..

A former Reagan economist wants to slash the salaries of professors and public officials — while simultaneously proposing tax cuts to stimulate the coronavirus-stricken economy

• Less people working, that was the whole idea. Social distancing..
  
• Laffer is a prime example of Voodoo economists keep on saying the same stuff irrespective of what evidence actually shows.