THE 33,000 LEVEL, AND IT’S DOWN
QUITE SHARPLY DOWN 1.3%.
NOW, EARLIER THIS MORNING,
PRESIDENT BIDEN UNVEILED HIS
PLAN TO FIGHT INFLATION.
HE AUTHORED AN OP-ED PIECE IN
THE WALL STREET JOURNAL THERE IT
IS.
HE LAID OUT THREE POINTS
BASICALLY NUMBER ONE, HE WON’T
INTERFERE WITH THE FED, NUMBER
TWO, HE’LL MAKE THINGS MORE
AFFORDABLE FOR FAMILIES AND
THREE, HE WILL LOWER THE DEFICIT
BY TAXING COMPANIES AND
BILLIONAIRES.
LARRY KUDLOW WITH US THIS
TUESDAY MORNING.
WILL THAT WORK?
IS THAT A REAL INFLATION-
FIGHTING PLAN?
LARRY: NO, IT’S NOT AN
INFLATION-FIGHTING PLAN,
ALTHOUGH, I’LL GIVE SOME CREDIT.
IF HE LEAVES THE FED ALONE, THE
FED HAS A LOT OF TOUGH WORK
TO DO.
THAT’S FINE.
HE TAKES A CHEAP SHOT AT TRUMP,
OF COURSE AS HE ALWAYS DOES.
TRUMP OBJECTED TO FED TIGHTENING
IN 2018 FOR RATE HIKES WHEN THE
INFLATION RATE WAS LESS THAN
2%.
I MEAN, I THINK PRESIDENT TRUMP
WAS RIGHT ABOUT THAT, BUT THEN,
BIDEN GOES ON TO SAY THE
RECOVERY STALLED.
WELL THE RECOVERY HADN’T STALLED
THE RECOVERY WAS GOING AT 6%,
AND THAT’S WHY THE STIMULUS
PACKAGE IN MARCH OF 2021 WAS
UNCALLED FOR AND HELPED LAUNCH
INFLATION AND HERE’S MY BIGGEST
CRITIQUE.
THERE’S NO EFFORT HERE, NO
DISCUSSION WHATSOEVER, TO FREEZE
FEDERAL SPENDING, AT LEAST
DOMESTIC SPENDING, WHICH IS
SOMETHING THEY’VE GOT TO DO IF
THEY WANT TO STOP INFLATION.
IN FACT, HE TALKS ABOUT, YOU
KNOW, CHILD KARA LONGSES, AND
ELDERLY ALLOWANCES, HE WANTS
MORE SPENDING WHICH IS GOING TO
MAKE THE PROBLEM WORSE.
HE TAKES PRIDE IN THE DEFICIT
REDUCTION.
THE DEFICIT REDUCTION, UM, THIS
YEAR IS ABOUT RUNNING OFF
THE EMERGENCY PROGRAMS, HIGH
INFLATED REVENUES, AND BY
THE WAY, THE TRUMP TAX CUTS HAVE
STIMULATED CORPORATE TAX
REVENUES ENORMOUSLY, SO THAT’S
NOT GOING TO WORK EITHER, AND
THEN THE OTHER STUFF IS LOOK,
SPENDING IS A SHARED GDP
ACCORDING TO THE LATEST CBO
REPORT, STU, IS ABOVE
THE 50 YEAR AVERAGE, 20% OF GDP,
THE DEBT-TO-GDP IS GOING TO BE
110% AT THE END OF THE 10 YEAR
WINDOW, SO THERE’S NO BUDGET
RESTRAINT.
AT THE HEART OF THIS PLAN,
THERE’S MOVEMENT TOWARDS A GREEN
ECONOMY.
A FOSSIL FUEL, FOSSIL-FREE
ECONOMY.
THAT’S WHAT HE’S TRYING TO
PREDICT.
THAT’S HIS WORD "TRANSITION."
WE’RE GOING TO TRANSITION TO
SLOW GROWTH, HE SAYS.
WELL, YEAH, WE’RE GOING TO
TRANSITION TO A PERMANENT
RECESSION IN MY VIEW IF WE HAVE
SOMETHING CALLED A FOSSIL-FREE
ECONOMY, HE WANTS HIS GREEN
ECONOMY, HE WANTS MORE SUBSIDIES
AND TAX CREDITS FOR GREENIES.
THAT’S NOT GOING TO CURB
INFLATION, THAT’S GOING TO
INFLATION INCREASE AND IT’S
GOING TO SLAM DOWN GROWTH.
STUART: JUST A COUPLE MINUTES
AGO I WAS TALKING TO OUR
COLLEAGUE STEPHEN MOORE.
I ASKED ARE WE GOING TO GET 10%
CONSUMER PRICE INFLATION THIS
SUMMER AND HE SAID PROBABLY
NOT.
IT WAS STILL AT 8%.
WHAT DO YOU SAY?
10% CONSUMER PRICE INFLATION
THIS SUMMER?
LARRY: WELL, LOOK, I THINK THE
RANGE OF INFLATION IS SIX,
SEVEN, OR 8%.
I THINK THAT’S ABOUT RIGHT.
SOUNDS LIKE STEVE GOT IT RIGHT.
THAT’S THREE-TO-FOUR TIMES THE
FED’S 2% TARGET.
I WAS VERY INTERESTED IN WHAT
FED GOVERNOR CHRIS WALLER HAD TO
SAY, THAT THE FED’S GOING TO
HAVE TO HAVE A MUCH MORE
RESTRICTIVE POLICY, THAT THEIR
TARGET RATE IS GOING TO BE, YOU
KNOW, SO-CALLED ABOVE NEUTRAL.
I MEAN, LOOK.
THE FED’ BASIC MEASURE HERE
LOOKS LIKE IT’S ABOUT SIX OR 7%
, SO YOU KNOW, YOU’RE TALKING
ABOUT A SEVEN OR 8% FED FUNDS
RATE.
THIS IS GOING TO TAKE SEVERAL
YEARS.
THE BIDEN PLAN DOES NOT GIVE ANY
HELP ON PRODUCING MORE OIL & GAS
THEY WANT TO STOP FOSSIL FUELS,
THAT’S GOING TO MAKE IT WORSE.
STUART: THAT’S AT THE HEART OF
IT.
LARRY: THERE’S NO FREEZE, YES,
THERE’S NO FREEZE ON FEDERAL
SPENDING, AND THAT’S GOING TO
MAKE IT WORSE, SO TO ME, HIS
OP-ED PIECE IS JUST MORE OF THE
SAME, AND WE’RE GOING TO
NEED TO ADD SOME POINT OF BELT
AND SUSPENDERS APPROACH TO THE
ECONOMY AND THE STOCK MARKET
OVER THE NEXT FIVE, SIX, SEVEN
MONTHS BUT THEY ARE COMING.
STUART: I’LL BE WATCHING YOU AT
4:00 THIS AFTERNOON FOR MORE
ANALYSIS OF THE PLAN FROM THE