Larry Kudlow Admits His Gloomy Economic Forecasts Were Wrong
U.S. Economy Shows Unexpected Strength, Defying Kudlow’s Predictions
Former President Trump’s economic adviser Larry Kudlow has confessed that his dire predictions of a looming recession under President Joe Biden were mistaken, acknowledging that the U.S. economy is outperforming his expectations.
The Bureau of Economic Analysis reported on Thursday that the nation’s gross domestic product (GDP) grew by an impressive 3.3 percent in the fourth quarter of 2023, exceeding expectations and indicating the effectiveness of the Biden administration’s economic policies.
Biden Highlights Economic Progress, Credits His Policies
President Biden hailed the economic growth as a testament to the effectiveness of his policies, emphasizing the creation of jobs, the moderation of inflation, and the overall improvement in the economic well-being of American families and workers.
“Today we learned that the U.S. economy grew 3.1 percent over the past year while adding another 2.7 million jobs, and with core inflation moving back down towards the pre-pandemic benchmark,” Biden stated. “As a result, wages, wealth, and employment are higher now than they were before the pandemic. That’s good news for American families and American workers. That is three years in a row of growing the economy from the middle out and the bottom up on my watch.”
Kudlow Acknowledges Positive Economic Indicators
Appearing on Fox News’ America Reports, Kudlow, now a Fox Business Network host, acknowledged the robust GDP growth figures, stating, “Look, it was a good quarter, don’t get me wrong, 3.3 percent beat estimates.” He added, “And the last quarter was a good quarter, 4.9 percent. Absolutely. So he gets his due. If I were he, I would be out slinging that hash, too. No problem.”
Kudlow Attributes Growth to Government Spending
However, Kudlow attempted to downplay the significance of the economic growth, attributing much of it to federal spending. “I don’t want to be accused of denying his numbers,” he said. “But I’m saying if you put it in perspective, it really is—a big chunk of it is government spending.”
Kudlow Admits Error in Recession Forecast
Challenged by Fox News anchor Sandra Smith about his previous predictions of a recession and “significant slump” under Biden’s leadership, Kudlow conceded that his forecasts had been inaccurate. “You’ve got the [Dow Jones] making record after record after record,” Smith stated. “Larry, what do you say to folks who say, ‘Wait a second. This is not as bad as you have been saying it is?'”
“I would say, probably, I would agree,” Kudlow replied, prompting a surprised Smith to exclaim: “Whoa! That’s a headline!”
Inflation Remains a Political Challenge for Biden
Despite the positive economic indicators, Kudlow and Smith agreed that the lingering effects of high inflation experienced at the beginning of Biden’s presidency continue to pose a political challenge for the president.
“Although Mr. Biden’s economic numbers in the last six months have improved—those are facts, I acknowledge that—you don’t see it in the polling data at all,” Kudlow said. “And the reason for that is, as you just noted, his Achilles heel is still the affordability crunch.”
Kudlow also expressed concern that consumer prices could potentially rise again due to the level of government spending, raising the question, “How long can we keep the inflation lid on?”
Conclusion
Larry Kudlow’s admission that his economic forecasts regarding a Biden-led recession were incorrect highlights the complex and unpredictable nature of economic trends. While the U.S. economy has shown resilience and growth under President Biden’s leadership, the lingering effects of inflation and the potential for future economic challenges pose ongoing obstacles for the administration.