Larry Kudlow: Americans are pessimistic about high inflation
In his first interview in a very long time, our President, Joe Biden, threw quite a few whoppers during an interview with The Associated Press.
I think my favorite is his statement that the idea that expenses causes inflation is “weird”. This is a double mess.
At this point, outside of the White House building, virtually no one doubts that overspending, including the $2 trillion bailout in March 2021, was the cause of inflation – virtually everyone world.
That’s why, for example, the latest Fox News poll shows him at a 29% approval rating on the economy to 67% disapproval, and 23% to 71% on inflation specifically. Joe, what’s “weird” is your voting numbers.
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Leading Democratic economists have said throughout that massive government spending has boosted a Trump economy that was already in a V-shaped recovery from COVID. Business people everywhere have made the same point. It’s just common sense and yes, the Federal Reserve bought the deficit reduction bonds and printed far too much money.
Uncle Joe, drop this one. Could you please? You basically went from zero inflation to transient inflation, Putin inflation, and in the last few days ExxonMobil inflation.
Oh yeah, and Exxon hasn’t paid its fair share of taxes, so they’re not “patriots,” and you’re going to use your emergency powers to go after them.
The problem is that ExxonMobil has invested $118 billion in new oil and gas supplies over the past five years against net income of $55 billion and essentially increased production by 50%. In 2020, they lost $20 billion, but here’s the best part: they paid $40 billion in taxes last year.
Do you think that amounts to paying their fair share? It’s a bit like Elon Musk who paid $11 billion in taxes last year. I would say they are both eligible.
The problem with Joe Biden’s attack on fossil fuels is that his own policies have resulted in refineries being shut down, pipelines being shut down, permits being denied, all in an effort to end fossil fuels, which was his campaign commitment too clear.
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Another big problem is that all the other major industrialized countries have higher inflation. Well again, that’s just not true. Sorry, Joe. Inflation is lower in China, Saudi Arabia, Japan, Switzerland, Australia, France, South Korea, South Africa, Canada, Italy, India, Mexico, Germany and throughout the euro area.
The San Francisco Fed, a month or two ago, did a study that core inflation in the United States is much higher than core inflation in OECD countries.
More recently, prominent Democratic economist Jason Furman wrote in a WSJ opinion piece that a big gap has opened up between core inflation in the United States and works about twice as fast as in Europe.
Moreover, US stimulus spending to boost aggregate demand was significantly higher than in Europe and nominal wage growth of around 6% per year in the US is about double the 3% wage rate. in the euro area. You were right in a sense, Mr. President. Your policies are changing people’s lives, but for the worse, not for the better.
With basically 10% inflation, falling real wages, record gas prices, huge grocery store food increases, no baby formula on the shelves, a few million illegals crossing our border, your radical progressive defense of woke sex, gender and racial education in the classrooms, defending the teachers union and calling parents “domestic terrorists”, a continuing massive crime wave, and your complete mess of Afghanistan – well, the effect on people’s lives even shows up in the latest left-wing Politico poll, with only 26% saying America is on the right direction and 74% saying we’re on the wrong .
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You’re on something that national morale is really low for all the reasons I just gave. Those aren’t positive reasons, and you’re also onto something when you say the need for mental health in America is skyrocketing. But, sir, COVID is only a small, fading part.
What’s really going on is a great collective national anxiety about inflation, gas prices, baby formula, and all the rest of your failings. People are pessimistic, not optimistic.
The economy is at the start of a recession, real wages are falling, as are stock markets, where the middle class is investing in their retirement accounts. People are stressed at times like this.
Both alcoholism and drug use are on the rise. It is part of the national stress. It is damaging to our mental health. Show me a time when the majority of people are making good money, with good jobs, with low prices, with easy gas at the pump, with well-stocked supermarket shelves, with a high work, and I will show you a happy country.
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At present, this nation, under your policies, has once again become a welfare nation. You’re paying people not to work, you’ve turned down work requirements in exchange for federal aid, and the inevitable result of that is unhappiness, low self-esteem, high anxiety, ongoing stress and many mental health issues.
Your efforts to turn this country into some sort of waking progressive paradise have completely failed in just 18 months. It’s time for a change. Make it a big change. The cavalry arrives.
This article is adapted from the opening comment by Larry Kudlow in the June 17, 2022 edition of “Kudlow”.