Kudlow Calls For a Net Export Led Recession Again
If John McCain is listening to Lawrence Kudlow on economics, he is seriously unqualified to be the next President:
This would also be a great time for Sen. McCain, who is traveling overseas, to talk about a strong dollar — both for financial reasons and to promote American prestige. It would underscore that the U.S., despite its temporary economic slowdown, is not weak in any way. The Fed helped the dollar and hurt commodities by its “less is more” policy decision Tuesday, where they cut the fed funds rate by 75 basis points instead of 100. They also devoted more attention to the inflation threat in their policy statement. Meanwhile, two Reserve Bank presidents — Dick Fisher in Dallas and Charlie Plosser in Philadelphia — dissented from the 75 basis point cut due to their concerns over inflation.
A stronger dollar would mean less exports and more imports. If the policy tool used to generate a stronger dollar is a tighter monetary policy, we’ll see less business and residential investment. Maybe Lawrence Kudlow is just to stupid to realize he is advocating making what may be an emerging recession worse, but let’s hope policy makers are not stupid enough to listen to this clown.