As Its Ratings Slide, The Confessions Of A Recovering CNBC Pundit
The latest Nielsen ratings show that business network CNBC is in a ratings free fall. By some measures the cable channel is experiencing its lowest numbers since 1994. Particularly hard hit are Jim Cramer’s Mad Money and Larry Kudlow’s show, The Kudlow Report. Kudlow’s is showing the worst ratings declines year over year of any program in the network, and keep in mind, the network itself is once again suffering a big ratings slide. The Kudlow Report’s numbers have fallen 60% in the last year. I wish all of this would have come as a surprise to me, but it has not.
I was a paid CNBC contributor for two years, 2008 and 2009. And my job was principally to appear on Kudlow’s show. I appeared as a guest well over a hundred times, via satellite hook-up from my home town, live in studio in Englewood Cliffs, New Jersey, live in the Washington, D.C. studio, and also live in studio as a guest host when Larry was on vacation. I got to know every one of his producers on a first name basis as well as the staff of his personal consulting company, and appeared virtually every Saturday on his WABC radio show during that same period of time. But in January 2010 I told Larry that I was no longer willing to continue as a CNBC contributor.
Before I tell you why I quit, let me first tell you what attracted me to the Larry’s show. Larry, as a supply-side economist, was a refreshing change of pace in a media environment which seems to gravitate towards hostility to markets. Keynesian analytical tools were so dominant that most analysts seemed unaware that there was any alternative. Stimuluses would stimulate. Inflation came from too much economic growth. Tax cuts caused deficits. Period. Kudlow took the set of analytical tools which he got from Art Laffer and Jude Wanniski and Steve Forbes, opened the shutters, and let a little light come into the dusty little world of Keynesian commentary. Investors, who tend to be entrepreneurs themselves, intuitively ‘get’ supply-side economics because they themselves are the suppliers. When Kudlow appeared, they took notice. The network noticed that the audience was noticing Kudlow. But they were wary, because Larry was a conservative. Following the standard network rule that conservatives must always be counterbalanced, the network teamed the Republican Kudlow up with the Democrat Cramer and Kudlow and Cramer was born. The show did reasonably well, and eventually the two were broken up and each ended up with a show of his own, proving the old adage (which I just invented) that ‘There is nothing we can’t accomplish if we don’t work together.” The two shows each did better than the combined show had done.
Shortly after Larry’s program went on the air, I was invited as a guest. I’d been receiving invitations to be a guest on Fox News and CNN and C-Span and lots of talk radio. I was reticent to go on TV, as it was an anxiety producer for me, but Larry and his team were very inviting and I started to appear as a regular guest on both Fox and CNBC.
But everything changed when Fox News decided to launch a business channel. The stations started pushing to be the first one to get me on, and saying that if I were on one station early in the day, I couldn’t be on another station later that day. Eventually CNBC started to ask me for an exclusive relationship. I had friends on both sides of the divide and was hesitant to choose one over the other. But on the other hand, the invitations were becoming a real burden for me and it seemed like I was on TV almost every day. Eventually CNBC offered to pay me to appear as a guest on the show, but only if I were willing to stop going on Fox. I was unsure whether to take the deal. Larry called me one day and asked me personally to come on board and help him to fight the good fight among the liberals in the world of CNBC. I agreed. How could I not? The deal would cut my appearances down to two or three per week, allow me to fight for the principles I believed in, and pay me, to boot.
And for a while it was great. The show was great. Larry is very smart, brilliant even, and knowledgeable in a multiplicity of disciplines. The show reflected that brilliance. His guests (excluding me) were of the highest caliber. And I was there to uphold basic principles of freedom and limited government which I love. But over time it became gradually more and more clear to me that my job was not to fight for certain principles, but to fight for Larry’s personal agenda. Although the show adopted ‘The Kudlow Creed,’ “I believe that free-market capitalism is the best path to prosperity,” that dogma was being supplanted by another more foundational creed: economic and market optimism. My job was to come on the air and make the bull case. Over and over Larry would say on the air, “I’m looking for the bull case.” “I’m looking for the optimism case.” “Goldilocks economy,” and “Mustard seeds,” etc. If somebody were not on board with that message, Peter Schiff or Michael Pento or the late Joe Battapaglia, my job was to body check them. Giant animated boxing gloves would appear when I did so. I was willing to do that. I have a combative personality, overly so. Also from 2002 to about the middle of 2007 I was very bullish, longer than I should have been. Later less so, and eventually very bearish.
And therein lies the problem. Larry’s fundamental commitment was to optimism, not to free market capitalism, and with the sharp turn to statist solutions at the end of the Bush administration which continued on into Obama’s presidency I became less and less optimistic about the economy. Larry kept looking for silver linings in economic abominations like Cash for Clunkers. He started to describe Obama as ‘Reaganesque,’ nicknaming him “the Supply-Sider at 1600 Pennsylvania Avenue,” on the basis of the merest tiny rhetorical hint from the White House. He kept going on about ‘V-shaped recovery’ in his segment Kudlow 101, standing in front of a touch screen and using his finger to draw Vs on top of data charts which looked much more like painfully elongated checkmarks. More recently his columns have been praising the zero interest rate and ‘unlimited easing’ policies of the U.S. and Japanese central banks. This is free market capitalism?
The last time I appeared on air with Larry we clashed over the appointment of Bill Daley as Obama’s Chief of Staff. I thought it was at best a feint to the center, and given Daley’s background in the overlap between machine politics and government-dependent corporate life, another sorry example of crony capitalism. Larry was sure it meant Obama was moving to the growth side and would use Daley to spearhead a Reagan-like tax simplification and lead us all into the V-shaped goldilocks world of optimism. We disagreed vigorously, harshly even. That same day I told him that I would not be renewing my contract with CNBC.
As with any break which involves ideology and business and friendship, there are lots of levels of disagreement. But one overrode them all, the constant pressure for optimism, producers calling and saying “Larry’s looking for the optimism case.” Larry putting formerly optimistic guests ‘in the penalty box’ for not providing it. Larry dropping good thinkers with good minds when they turned pessimistic. And even worse, those who stayed around, bending their minds and their principles to always find good news so they could continue in his good graces and get the publicity they needed. I found myself doing that too, continuing to automatically look for the bull case even after the bull case was no longer the strongest case. On many levels, this was not what I had signed up for.
And it appears that it’s not what the audience had signed up for either. They’ve abandoned it in droves, and news reports indicate that NBC Universal management has noticed all that and is considering a shake-up. The investor class is under assault in the U.S. to a degree that none of us have seen in our lifetimes. They don’t want the optimism case. They don’t want the pessimism case. They don’t want the members of the ruling class who are assaulting their portfolios to be coddled rhetorically by someone who is supposed to be on their side. They want the truth, and the truth is that free-market capitalism IS the best path to prosperity, but that it IS NOT the path we are currently on. Let’s save the optimism for the time when we get our feet back on the proper path.
In the meantime, if I start to switch to CNBC at 7 pm again, what I want to see is not some bland or liberal replacement for Larry, nor the recent Larry who’s lost his edge and his message. I want the original Larry, the guy who understands the supply-side model, holds to it on principle, and defends it no matter who is in the White House and no matter where it leads.
Article originally published on Forbes.com.