WASHINGTON -- The markets are on edge. Then again, inflation is low; employment is high -- historically high in the case of blacks and Latinos -- and growth is healthy and looking to become very healthy. Dare we say robust? The reason for the edginess in the markets is that President Donald Trump has imposed tariffs on communist China and threatens to impose more tariffs. There is talk of a trade war. That should worry any champion of free markets.
So we welcome the appearance of Larry Kudlow in Washington, D.C. He is a free market champion to the utmost, and he has been brought to Washington by the imposer of tariffs. Now President Trump seems to incline toward the chaos theory of government. He often employs people who do not completely agree with one another. Kudlow is for free trade. Another White House aide, Peter Navarro, is not.
President Trump's opponents disdain him for this, but as I recall, former President Ronald Reagan also practiced the chaos theory from time to time -- remember, if you will, his strategy to end the Cold War. When he traveled to Reykjavik to negotiate arms with then-Soviet leader Mikhail Gorbachev, practically everyone on Reagan's staff was an advocate of conventional arms control, except the president was not. When things did not go Reagan's way, he took a walk. Actually, the chaos theory was employed first by none other than former President Franklin D. Roosevelt. Back in Roosevelt's day, those who now chide President Trump for being a chaos kind of guy would have been praising chaos to the heavens. Recall, if you will, Arthur M. Schlesinger Jr.'s "The Age of Roosevelt" or Robert Sherwood, another renowned Roosevelt court historian. Chaos has its uses.
Kudlow is President Trump's director of the National Economic Council. He is also a supply-sider, a believer in low taxes and a rational man. He blames the Chinese for stirring up talk of a trade war, and he is counseling a wait-and-see policy. Wait and see if the author of "The Art of the Deal" is in the first stages of making a deal or of waging a trade war. We are all counting on President Trump, the entrepreneur, to realize that in a trade war, there are no winners.
Yet Kudlow's reasonable case for withholding judgment and his free market credentials were not enough to temper another free-marketer, Fox News host Neil Cavuto, who said, "This doesn't sound like the same laissez faire, hands-off Larry Kudlow I've respected and admired all these decades." Well, hold on, Cavuto. All Larry is saying is give Donald a chance.
I side with my friend Seth Lipsky, who in the pages of The New York Sun went so far as to write: "History teaches that there's a fine line between reasonable protection and catastrophe. If that puts a premium on discretion, it seems to us that Mr. Trump has as much claim to that discretion as any president, and more than many, in that he took the tariff question to the voters and won a mandate. Mr. Kudlow is arguing that the tariffs imposed so far are the start of a process and a negotiation the goal of which, at least for our side, is lower barriers, freer trade, and faster growth."
"(R)easonable protection and catastrophe"? That is cutting the president some slack. I say at least let the president and Kudlow begin to negotiate. President Trump's complaint with the Chinese is over such issues as dumping products on the American market and theft of American intellectual property. On those matters there is a great deal to negotiate. I say let Kudlow be Kudlow, and let the president begin his negotiations.
Kudlow is a well-known quantity for American conservatives. He has been leading the free marketers since the days of Reagan. He is pro-growth and has been for decades. He will have to contend with Navarro, the director of the White House National Trade Council. Navarro is no free marketer. Let the better man win, and let negotiations begin.