◼ ECONOMICS Bloomberg Businessweek March 9, 202028
American Abundance, a collection of columns and
speeches that, like much of his writing, lays out the
case for supply-side tenets including tax cuts, dereg-
ulation, free trade, and a gold anchor for the dollar.
His optimism is a trait he acquired in the after-
math of what he calls “my personal crash and burn.”
In 1994, Kudlow, who’d risen rapidly from his first
job as a staff economist at the New York Fed to Wall
Street, then to a post in the Reagan administration,
was forced out from his job as chief economist at
investment bank Bear Stearns for abusing alcohol
and cocaine. His going public that year in aNew York
Times article, in which he ascribed his addiction to
the pressures and travel that came with the job,
was followed quickly by a relapse; his firing from
the National Review, where he’d landed as an eco-
nomics commentator; and a five-month stint in a
Minnesota rehab clinic, where he deepened what
had been a budding interest in Catholicism.
Born into a middle-class Jewish family in New
Jersey, Kudlow was baptized in 1997 into not just
the Roman Catholic Church, but also a commu-
nity of conservative Catholics of which he remains
a proud member. The ceremony at St. Thomas More
Church on New York’s Upper East Side was attended
by his former boss at the National Review, William
F. Buckley, and Wall Street Journal columnist Peggy
Noonan. Kudlow, who’s been sober for 25 years,
says he was drawn to Catholicism by its basic idea
of rebirth: “The message of salvation, redemption,
and good orderly direction attracted me.”
Kudlow’s relentless optimism has occasionally
made him a target of scorn from other economists.In mid-2005 he derided those warning of a coming
crash in housing prices as “bubbleheads.” In
December 2007 he dismissed talk of a recession just
as the Great Recession that accompanied the global
financial crisis was beginning. “I’ve had good fore-
casts and not so good forecasts,” he says.
Like other successful senior officials in the admin-
istration, the self-described happy warrior has
learned not to try to manage or control Trump. An
avowed free-trader, Kudlow doesn’t hide the pol-
icy disagreements he’s had with the president. He
still opposes the steel tariffs that triggered the resig-
nation of his predecessor, Gary Cohn, he says. And
he continues to lobby internally against auto tariffs,
which Trump has threatened to impose on Europe
if it doesn’t agree to some sort of trade deal.
During a recent meeting with Trump and other
cabinet-level officials in which those tariffs came up,
Kudlow says, he proposed that for “at least a year”
the administration should “have some tariff tran-
quility” and focus on implementing Trump’s deal
with China and his replacement for Nafta, the United
States-Mexico-Canada Agreement. “Several cabinet
members said, ‘Yeah, Larry’s right,’ ” he says. “And
the president kind of looked up and had a smile on
his face. It registered. It registered. I’m not tying his
hands. He’s the boss. But the thought registered.
Let’s let things calm down.”
Whether Kudlow’s current optimism about
the U.S. economy and markets and their ability to
weather a budding pandemic will stand the test of
time is unclear, of course. Some Wall Street veter-
ans who remember his days at Bear Stearns say that,
though he didn’t have formal training in economics
and was generally pooh-poohed by the Ph.D. crowd,
Kudlow understood markets. One longtime investor
says that when he was a junior analyst at a major U.S.
bank, his boss swapped out the bank’s own research
and gave him Kudlow’s to read instead.
Kudlow insists he’s just taking the long-term view
on markets and the economy. The Fed may have
been moved to announce an emergency cut, but
he’s confident the U.S. economy will soldier on.
So, too, will he. Kudlow recalls that sitting in a
green room with Trump at the World Economic
Forum earlier this year, discussions among the pres-
ident and his staff moved to whether one cabinet
official might be too tired to continue in his role.
“Somebody said, ‘Everybody is tired.’ I just looked
up and said, ‘Well, I’m not tired.’ And I’m the oldest
guy there except for him [Trump]. And he [Trump]
said, ‘Yeah, I’ve given you a second life.’ ”
Kudlow has navigated health problems during
his time at the White House, including a heart
attack and a hip replacement, though he says he’sKudlow▼ Kudlow and the Art of
Jawboning
● Making the case for
lower rates, June 29,
2018
“My hope is that
the Fed, under its
new management,
understands that more
people working and
faster economic growth
do not cause inflation.”● Upbeat about
U.S.-China trade talks,
Nov. 14, 2019
“We’re getting close.
The mood music is
pretty good, and that
has not always been so
in these things.”● Tamping down
coronavirus fears,
Feb. 25, 2020
“The virus story is not
going to last forever. ...
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.”