Here they go again, Joe Biden and company on the campaign trail telling us how wonderful their economic policies have been. Expect. “Wonderful” scrap. Insert “successful”, fabulously successful economic policies.
The problem is that in just over a year, Bidenomics has taken a non-inflationary boom and turned it into a high inflation bust. Frankly, with no relief in sight at least until the cavalry comes and changes congressional policies in November, I’m glad to see my dear friends on the editorial board of the Wall Street Journal take Treasury Secretary Janet Yellen to the job.
She’s leading Biden’s economic victory tour, but sadly, she’s backed all of the big government’s progressive socialist policies coming from the far left of the Democratic Party.
She believes the March 2021 $2 trillion stimulus package was needed to revive the economy. The problem is that the economy was already in a V-shaped recovery coming out of the pandemic, buoyed by President Trump’s policies of low taxes, deregulation and turning on fossil fuel taps.
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Mrs Yellen, who is an accomplished economist and a former Fed Chairman and married to a distinguished Nobelist speaks with forked tongue. His analysis is wrong. Additionally, she was leading the charge with Jay Powell and Joe Biden, which created inflationary pressures from extravagant government spending, massive government borrowing, and exuberant Fed printing.
These are all local policies that preceded Vladimir Putin’s invasion of Ukraine. There was an 8% inflation rate caused by these huge tax errors. This is why Mrs. Yellen’s reputation is sinking. Personally, I hate to see it. Professionally, I have to talk about it.
As The Wall Street Journal points out (and I’ve said it dozens of times on this show over the past year), Trump’s tax cuts have raised the real wages of blue-collar and minority workers. Unemployment rates for these groups have plunged to their lowest level in 50 years. Poverty has decreased. Inequalities have decreased.
The biggest winners from personal and business tax cuts are middle- and low-income earners, not the highest earners. These are facts. Ms Yellen, speaking in Detroit, argues that Trump’s tax cuts have caused rising inequality and slowing growth. She is wrong in fact and she knows it. Incidentally, with Mr. Biden’s 8% inflation rate, workers’ real wages have actually fallen 3.5% over the past year.
The first bullet point in today’s White House economic plan fact sheet says workers are empowered. Oops, forget the drop in real wages and family incomes!
They talk about making and building in America, but wait a second, you can’t get permits to make or build anything in Biden’s America. His zealous environmental rules almost stopped everything. All sorts of energy and, by the way, ordinary road building infrastructure too – can’t get past the White House and EPA fanatics.
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Rewarding work, not wealth, they say. Well, every model – government or private sector – shows that Biden’s recent legislation will tax the middle class heavily and the IRS will spend its time unloading on the middle class and virtually no one in the general American population will believe that the Inflation Reduction Bill will reduce inflation– hardly anyone.
I will conclude with this reflection. This radical obsession with global warming and climate change that informs every policy of the Biden administration is driving the United States and the global economy into irresistible economic decline. Hats off to Joseph Sternberg of the Wall Street Journal for his latest column, “The Coming Global Crisis of Climate Policy”.
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There is no climate emergency. This is all a socialist fabrication of central planning, trying to shove this bureaucratic religion down our throats. Fossil fuels generate about 85% of the world’s energy, even after decades of government subsidies and crazy padded regulatory plans, but what if any of these climate policies to “net-zero this, or net-zero that, or we’re gonna take your car, or we’re not gonna let you run your air conditioner” or literally one of those crazy politicians who just want to unplug America, if any of this stuff really happened, it would be a global economic and financial disaster.
My friends, I want to go home with an optimistic frame of mind before the weekend. Why? Because the cavalry is coming and that’s my riff.
This article is adapted from Larry Kudlow’s opening commentary on the September 9, 2022 edition of “Kudlow”.