So, Joe Biden was out this morning in all his splendor, talking about the May jobs report and many other things.
I don't know if folks remember the great moment in the1980 presidential debate between Ronald Reagan and Jimmy Carter. Carter was like a little ankle-biting puppy dog. He kept swiping away at Reagan with falsehoods, whereupon finally The Gipper turned to him and said, "There you go again." The crowd roared. The debate was won and the rest, as they say, was history. Good history, I might add.
Today, we're making bad history. Today, Joe Biden had this absolutely fantastic line talking about inflation and how we have to understand the root of the problem. Take a listen.
PRESIDENT BIDEN: It’s important that we understand the root of the problem so we can take steps to solve it. I've been upfront with the American people from the outset that there would be a cost here at home of Putin’s decision to brutally and savagely invade a sovereign nation.
What's so wonderful about this is that Mr. Biden and his team are engaged in a full-bore campaign to hide the real cause of inflation. Or maybe they don't understand it themselves, which is an even bigger problem. It's Putin's price hike, nothing to do with Biden fiscal policy.
Of course, now that the president feels our pain on inflation, he and his minions are out there apologizing for being a year and a half too late. But, while they're apologizing, they are spreading their demonstrably terrific falsehoods about the root cause of inflation. Once again, I invite your attention to my favorite apology of all, that being Janet Yellen's hostage video. See it for yourself:
JANET YELLEN: Look, I think I was wrong then about the path that inflation would take. As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I, at the time, didn't fully understand.
If Putin is really the problem, then why is our inflation so much higher than the inflation rates of the other OECD big economies?
A recent study from the San Francisco Fed entitled "Why is U.S. inflation higher than in other countries?" shows that core U.S. CPI inflation is running about 5%, while the rest of the OECD is running about 2%.
Of course, there's never any mention of his $2 trillion emergency spending plan that provided the inflationary liftoff in the first place — like jamming even more demand into the Trump V-shaped recovery that was already strong and at the same time, the Bidens put the clamps on the fossil fuel industry and other anti-business policies that restricted the supply of goods and services.
So, in ordinary terms, Biden's woke economic policies boosted demand and shackled supply.
The result: higher inflation. This happened a year before Vladimir Putin was massing troops on the Ukraine border and in the year before Putin, inflation took off, as did gasoline prices, food prices and virtually every other price.
Biden won't admit to that. Neither will Yellen and by the way, neither will Fed head Jay Powell, who supported the Biden spending package and financed the borrowing of the Biden spending package by buying all the bonds and increasing the money supply. Let's not make this any harder than it needs to be.
It's just that Uncle Joe, who wants us to understand the root of the problem, absolutely does not want anybody to understand the real root of the problem.
Now, Joe boasts of deficit reduction, and it is true. The deficit over the past year is coming down, but that's mostly because many of the emergency spending programs are expiring. The successful Trump tax cuts are boosting revenues. Bidenflation is also boosting revenues and by the way, if Uncle Joe had his way with "Build Back Better," he would put another string of deficits and $3 trillion more of federal debt on the books from his not-paid-for $5 trillion "Build Back Better" plan.
In fact, the word "paid-for" is not in the Biden vocabulary, but Uncle Joe can't have it both ways. If you're cutting spending, then stop pushing for your spending package. As recently as his WSJ op-ed a couple days ago, he kept pushing for his spending plan. So then quit bragging about your deficit reduction. Anyway, this is all too much dog chasing tail for me. We saved America and killed the bill, and it's going to stay killed.
No one expects the Bidens to ever tell the truth about the failure of woke progressive economics and Modern Monetary Theory. So, the rest of us have to make up the slack by telling the truth. If the president had his way with high taxes, massive welfare state social spending, a Green New Deal, a carbon-free power grid, that would lead to a permanent recession, accompanied by higher and higher inflation, which leaves me with one final thought.
Another thing Uncle Joe didn't tell us today: The jobs report on the surface looked ok. The numbers are the numbers. Private payrolls went up 333,000, but because of Bidenflation, wages for all employees increased 5.2% for the past 12 months and that is 3 percentage points below the latest CPI reading of 8.3%.
Wages for production workers were stronger, up 6.5% over the past year. That's still 2 percentage points below the inflation rate. So, falling real wages — what my pal Rick Santelli called "canaries in the coal mine," warned that the economy may be turning sour. That's what high inflation does.
My hero Elon Musk said today he has a "super bad feeling" about the economy.
You know me, I don't want to get too bearish on this whole story, because I do know one thing: the cavalry is coming.
This article is adapted from Larry Kudlow's opening commentary on the June 3. 2022, edition of "Kudlow."