Friday, March 28, 2014

A Man In The Arena (tribute to Larry Kudlow)

Thank you, Jason Trennert (CIS at Strategas Research Partners) for your beautiful tribute to Larry Kudlow:

All good things, as they say, must come to an end and tonight, I’m afraid, will mark the final installment of Larry Kudlow’s eponymous show The Kudlow Report on CNBC.  I had long been a fan of Larry from his days on The McLaughlin Report when the sum total of political commentary on television was, mercifully now that I think about it, reserved for Sunday morning.  (For you youngsters out there, the sum total of market commentary on television was reserved for a half-hour a week on Louis Rukeyeser’s Wall $treet Week and in truth, it’s hard not to feel as if we were the better for it.)  I always admired Larry’s unapologetic defense of free markets and, to be frank, his style.  He always looked, dressed, and spoke like a Wall Street guy should, I thought.  I have considered a great blessing to have become friends with him and for his willingness to support my development as an economist and as a Wall Street professional as well as to shape my thoughts on the way markets and the economy work.

Perhaps we’ve gotten along so well because he too started his life as a Democrat.  For me that changed after spending precisely one semester in Marion Barry’s Washington D.C.  For Larry, that seemed to change after he began his career on the open market desk of the Federal Reserve Bank of New York and, after a stint on Wall Street, became the associate director for economics and planning in the Office of Management and Budget (OMB) in the first Reagan administration. He really became a star when he rejoined Bear Stearns as its Chief Economist in 1987 and his association with The McLaughlin Group flourished.  Eleanor Clift never saw it coming.

We all stumble, of course, and it’s doubly hard to stumble publicly.  Larry’s ability to craft a second career as a journalist and remain a fixture on CNBC for more than 12 years was due, in my view, to his intelligence, his unflagging optimism about this country, and his commitment to his Catholic faith and to his wife Judy.  It all started in the immediate aftermath of 9/11 with America Now which he co-hosted with Jim Cramer.  That show morphed eventually into The Kudlow Report and has remained a regular stop for those who intersect at the country’s two major power centers – Washington and Wall Street ever since.  For those who doubt the power of an individual voice to have an influence, it should be remembered that Larry almost single-handedly gave President Bush the intellectual cover to cut taxes on both dividends and capital gains at a time when it was a politically unpopular.  (While there may be questions about priorities, I have yet to hear a good economic rationale for the double taxation of dividends.) Commented The New York Times at the time, “All summer long on his program, which is watched by White House officials (although not President Bush), Mr. Kudlow hammered at the idea of dividend tax cuts.  At the same time, conservative economists kept up the pressure on the White House.”[1]
<#_ftn1>  What was most significant about the tax cuts on dividends and capital gains at the time, was not only the fact that the rates were lowered but they were made equal, significantly diminishing the incentive for executives to seek capital gains over dividends.  Larry will remain a contributor at CNBC and if someone’s awake over there they’ll have him recreate Lou Rukeyeser’s Wall $treet Week in his own image.  In thinking about Larry’s career I am reminded of Teddy Roosevelt’s famous words:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Keep up the good fight my friend.