The Keynesians vs. Kudlow
Trump needs some pro-growth voices in the White House.
The real reason the Keynesian tong dislikes Mr. Kudlow is that he disagrees with their assumptions. He thinks tax cuts that change incentives produce more growth than do government transfer payments. He thinks the Keynesian “multiplier” model that $1 in spending produces $1.70 in growth is nonsense, as do most people who didn’t get a Ph.D. at MIT or Princeton.
This is precisely why Mr. Trump could use Mr. Kudlow on his economic team. So far the President-elect has chosen economic and financial advisers who are blank policy slates or best known for their ardent anti-trade and immigration views. His selection Wednesday of economist Peter Navarro to run a new White House National Trade Council puts another protectionist in the senior ranks. Mr. Kudlow is a free trader, and it would be useful to have at least one inside the White House.
Mr. Trump’s liberal critics don’t mind appointees who agree with them on trade and spending. They dislike Mr. Kudlow because they fear his pro-growth policies, like Reagan’s, will succeed too well.