Is This Larry Kudlow’s Worst Prediction Ever?
To celebrate the news that Larry Kudlow will become Donald Trump’s next National Economic Council director, many people have spent the week recalling the Reaganite cable pundit‘s most memorable economic predictions, most of which turned out to be spectacularly, comically wrong. Among his greatest hits: claiming, in December 2007, i.e. the month the recession started, “There’s no recession coming. The pessimists were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0”; declaring in February 2008 that the economy was going to rebound that summer, “if not sooner”; and stating flatly, in July 2008 (!!!), that the housing market was healthy as a horse and it was “a pity [that] the mainstream media” was just “searching for more and more pessimism” to sell newspapers. These calls, much like the equally wrong ones he made about the Clinton tax hikes and the Bush tax cuts, obviously all deserve spots on L. Kud’s highlight reel. But there’s one prediction that we feel has been unfairly overlooked.
We speak, of course, of ole Lar’s December 2016 bet that, far from being criticized for assembling the wealthiest Cabinet in history, Trump ought to be praised for the discerning move. Unlike the middle class, he explained, you can actually trust the wealthy. “Why shouldn’t the president surround himself with successful people,” Kudlow asked in the pages of the National Review. “Their business success demonstrates that they know how to achieve goals and convince skeptics that good deals can be made to the benefit of both sides.” More importantly, Kudlow added, “Wealthy folks have no need to steal or engage in corruption.” Fifteen months later, how’s that bet working out? Let’s take a look!
On Thursday, government watchdog group Citizens for Responsibility and Ethics in Washington (CREW) revealed that Treasury Secretary Steven Mnuchin, whose net worth is estimated to be somewhere between $150 million and $350 million has spent almost $1 million flying on either military or private planes when commercial flights would have sufficed, choosing “the most expensive flight options available at every turn, appearing to never even consider flying commercial as his predecessors did.” Presumably Mnuchin’s tab would have been higher if he had been granted approval to use a $25,000-an-hour government plane for his European honeymoon with Louise Linton.
Earlier this month, The New York Times reported that Jared Kushner’s family business, in which multi-millionaire First Son-in-Law retains a financial stake, had received more than half a billion dollars in loans after executives of two financial institutions met with Ivanka’s husband at the White House. (Both the bank and private-equity firm, in addition to Kushner Cos., have dismissed implications of impropriety.) Also this month, it was revealed that Kushner reportedly encouraged a blockade of Qatar, against the counsel of then-Secretary of State Rex Tillerson, just weeks after the country’s finance minister rebuffed his dad’s attempt to drum up investment for the family’s cursed Midtown tower, 666 Fifth Avenue.
Last March, billionaire investor and “special adviser” to the president for regulatory matters, Carl Icahn, told Bloomberg that he was “not apologizing” for making recommendations to Trump that just happened to benefit one of his investments (he retained his entire portfolio upon taking the unpaid advisory gig); in August, he resigned from the position ahead of a negative New Yorker article, with the White House bizarrely claiming he had never worked for them, even unpaid, in the first place, despite the fact that a press release was issued announcing his role.
Last year we learned that billionaire Commerce Secretary Wilbur Ross failed to mention a stake in a Russian shipping company with reported ties to a guy named Vladimir Putin.
Interior Secretary Ryan Zinke—an absolute slouch by his colleagues’ standards of wealth, but doing O.K. for himself with an estimated nearly $2 million to $3 million in the bank—is also said to have acquired a taste for luxe travel accommodations; his staff blamed Barack Obama for its inability to produce documents justifying his use of government jets.
H.U.D. Secretary Ben Carson, worth roughly $24 million, is at the center of a scandal surrounding a $31,000 dining-room set for his office.
Veterans Affairs chief David Shulkin, whose net worth is estimated at $17 million, has recently come under fire for his creative use of office resources, including taking his wife on a taxpayer-funded European vacation. On Thursday, The Washington Post reported that Shulkin threw a fit when he was told his wife couldn’t attend the Invictus Games with him and meet Prince Harry, and was salty the entire trip as a result. (In a statement, Shulkin told the Post, “These allegations are simply untrue. I was honored to attend the Invictus Games with the First Lady and understood fully when I was told that there wasn’t any more room for guests to attend.”)
(We are omitting E.P.A. chief Scott “Flying coach is safety risk” Pruitt because, with a net worth that barely breaches $500,000, he’s basically homeless relative to his colleagues. Former Health and Human Service Secretary Tom Price, worth $10 million, appears to be one of the few—if any!—people actually canned for invoicing taxpayers for his luxe travel habits.)
All in all, another great call by the man now helping to craft U.S. economic policy.
Wells Fargo chief celebrates $17.4 million payday with ballooning Justice Department probe
That 36-percent raise is looking more warranted by the hour:
A federal investigation into sales practices at Wells Fargo & Co. now includes the bank’s wealth-management business, extending the probe beyond the firm’s retail-banking unit where the problems originated, people familiar with the matter said.
The Justice Department and Securities and Exchange Commission are conducting the investigation into the wealth-management business, these people said. Agents from the Federal Bureau of Investigation have been interviewing some wealth-management employees in the Phoenix area as recently as this week, some of these people said.
Wells Fargo declined to comment. Officials at the Justice Department and S.E.C. also declined to comment.
How are Trump’s tariffs panning out?
Just swell, thanks for asking!
The European Commission, which coordinates trade policy for the 28 E.U. members, has said that, if the E.U. is not exempted, it should set duties of 25 percent on a range of U.S. products, whose annual imports to the European Union are worth 2.8 billion euros ($3.45 billion).
The 10-page list of products the E.U. may subject to tariffs ranges from rice to orange juice, makeup, motorcycles, motor boats, and stainless sinks. It also includes many metals products for use in construction and industry.
Some of the products, worth 2.8 billion euros, could be subject to duties within months. The E.U. says the U.S. cannot use national security as a justification for its metals tariffs, which means Europe can respond with “rebalancing” measures.
“We are not negotiating with the United States our exemption” an E.U. official told Reuters. “It is not acceptable to try to link a solution to this and any question to market access or trade negotiations.”
Compensation Watch ‘18: Goldman Sachs Women get paid a fraction of Goldman Sachs Men across the pond:
Well, this isn’t a great look:
Goldman Sachs Group Inc. pays women in the U.K. an average of 56 percent less than male colleagues, another stark example of the entrenched gender imbalances in the richest corners of the global economy.
The gap widens to 72 percent for year-end discretionary bonuses, a spokesman for the Wall Street bank said Friday. The newly required disclosures compare what all of Goldman’s male U.K. employees make with what all female employees do. The gap reflects the high concentration of men in senior and lucrative positions, while a bigger share of lower-paid jobs are held by women.
In a a memo sent Thursday, the bank said it must “hold ourselves accountable to providing more opportunities for women and diverse professionals to rise to the highest levels of our firm.”
Elsewhere!
Backed by Kudlow, G.O.P. Dares Democrats with ‘Phase Two’ of Tax Cuts (Bloomberg)
Navarro’s Ties to Nucor Highlight Trump Advisers’ Steel-Industry Connections (W.S.J.)
Bitcoin’s “Death Cross” Looms as Strategist Eyes $2,800 Level (Bloomberg)
Spotify and Dropbox to Join a Growing Club: Profitless Public Companies (W.S.J.)
Credit Suisse Tells the Rich to Buy Stocks If They Missed the Rally (Bloomberg)
Why Bear Stearns Could Happen Again (CNBC)
John Paulson’s hedge fund is “right-sizing” (N.Y.P.
LinkedIn’s $27 Billion Challenge: Get People to Use It More (W.S.J.)
Steve Bannon Says Mussolini Was a “Guy’s Guy,” Who Was “Clearly Loved by Women” (N.Y.M.)
