what is unavoidable is stagflation
and we're seeing growth coming down and
we're seeing inflation remaining high
too late a done deal stagflation is on
its way back that according to a former
obama economist stagflation being an
unusual condition that the u.s economy
found itself in during the 1970s yes
even as even president biden's treasury
secretary hinting at the same prediction
janet yellen saying higher food and
energy prices are leading to quote
stagflationary
effects let's bring in larry cutler host
of kudlow on fox business lair it's good
to spend time with you
where are we going and how do we stop as
the new york post put it in their cover
page today
the biden train wreck
yeah well unfortunately the biden train
wreck which he's brought upon himself
continues
look uh john and
jillian um when sandra was here we talk
i've been talking about stagflation
mm-hmm for quite a time
the simple way to think about it is all
it means is
inflation is rising faster than economic
growth
so for example in the first quarter
inflation was up about eight percent
and actually gdp fell
for special factors but that's not going
to change much so gdp in the second
quarter might be up two percent
the inflation rate's gonna still be up
about seven or eight percent or could be
worse so that's your stagflation and
to get out of that is very difficult and
i'm not sure it's going to end happily
as i've said several times and i just
want to point out i know you're not a
stock market show but the stock market
has been doing very badly okay it's down
25 year-to-date more or less and the
economic stay with me on this the
economic sensitive sectors like
retailers and home builders and chip
makers and you know consumer
discretionary they've been getting
killed they're down 30 35 year-to-date
and if you tack on inflation it's down
down like 40
so that's a signal
that the stock market is now discounting
a future recession
but it's also worried about high
inflation and high interest rates so
it's a very tough spot to be in so
let's pick up on that on the retailer so
two of america's biggest walmart and
target have now reported these
back-to-back uh quarterly reports that
they are for the first time
uh losing
business what's behind what is driving
that problem larry losing money julian i
mean their s their profits numbers came
in way below
expectations and the stocks were
absolutely slaughtered by the by a lot
of this is higher costs
okay wholesale prices are rising 11
so it's getting hard to pass that along
to consumers consumer prices bad enough
eight percent but that's a bad sign the
other point is for 13 straight months
consumer income
after inflation has been negative
you're losing ground if you're an
ordinary typical family um your wages
are rising by five six percent which is
good the unemployment rate is low which
is great but the trouble is inflation is
taking all of your earnings away so they
can't afford to pay these wholesale
prices and that has a lot to do with the
shelves being bare i'm not talking about
baby for me i'm just talking about in
general right these retailers you know
target uh walmart there's all but they
can't make a buck it's hard for them to
make a buck and then john to have more
fun with this you've got a lot of
unbrilliant economists like senator
elizabeth warren and her crowd her
little her little bridge group and they
want to impose excess profits and price
controls on all blame these businesses
not government spending and money
printing blame the businesses well that
can't help either and by the way the
stock market which is predominantly
capitalist hates that stuff yeah you
know larry when you take a look at the
rise in the price of gasoline the
inflation outpacing wage growth by
almost three points if not three points
consumers are getting poorer
by the day and this is going to multiply
as we trip toward the election now
democrats are trying to come out with
some diversionary issues to try to focus
their base on but but but in the end
economic survival typically wins out
when it comes to who you punch the
button for yeah you've got it right look
at um
people looking in their wallets and
pocketbooks or their 401ks
um don't really care much about what
ultra maga means but see they've got
negative maga that's the problem as you
say they are losing ground they're 401
you know john 100 million plus people
100 million plus people including the
great middle class the working middle
class they're in 401ks and iras all
right so they're getting hit and as you
said inflation is outstripping wage
gains very important part and they just
can't afford uh to live the way they
want to live their standard of living
has been falling now for over a year and
i think
any good econometrician or or pollster
will tell you when living standards go
down repeatedly
uh that's a death knell for the party in
power and i think that's what's going to
happen the cavalry the cavalry's coming
there's no question about that people
will be asking the question are you
better off now than you are two years
ago that's right and you look at the
right way wrong way numbers they're very
very bad look i you know i would say to
president biden and his group for
heaven's sakes you know
get real own it and change change some
policies i mean gasoline hit a new
record high today what did i read in the
paper this morning every state in the
union now has gasoline prices above four
dollars a gallon that's pretty darn rare
so look why would you cancel
leases
in energy rich places like alaska or the
gulf of mexico john where it only costs
30 dollars to break even when you drill
that's that you want to you want to do
more of that not less
why would you worry about the endangered
species act when you've got a energy
crisis on your hands and you know middle
class working folks are furious i mean
right the inflation tax is regressive
that's what jeff bezos
amazon ceo who's now in war with the
white house which i find remarkable he's
been saying that they won't even listen
to him for heaven's sakes his washington
post is taking wax that biden's
inflation policy buy them all listen to
them i know biden will listen to me i
get that i understand that but you ought
to listen to those people you know bezos
is a real person right i think he is
well
and i think i think biden's watching as
he's winging his way to south korea i'd
love to see it yes
thank you great to see you thanks both
of you see it for the fox business hi
everyone i'm brian kilmeade i want you
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