Kudlow: The very essence of Biden's presidency is hanging on by a thread

Almost immediately following President Biden's blundering news conference last Wednesday, a near-perfect storm has descended. Stock markets are selling off with their worst performance in many years. Interest rates and oil prices are rising. High inflation is embedded in the economy, and the Federal Reserve is about to launch a monetary tightening cycle.

Russia shows absolutely no signs of deescalating in the Ukraine, and if anything, has gotten more aggressive by moving troops into Belarus and ships into the Black Sea, effectively surrounding Ukraine. Meanwhile, Mr. Biden's domestic agenda has collapsed, and the very essence of his presidency is hanging by a thread. He has never recovered from the catastrophic Afghanistan withdrawal. 

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Nor has he recovered from his launch of a radical left big-government socialist domestic policy. Polls unanimously show the public is simply not buying the product Mr. Biden is selling. He doubled down on his failed woke product last Wednesday, another huge mistake.

Now, in a futile attempt to recoup his failed diplomacy with Russia, the Biden Administration is suddenly saber-rattling an increase of U.S. troops into Eastern Europe under the NATO flag. This, after telling the country he would not deploy U.S. troops. Right now, I am completely unconvinced and uncomfortable with putting another 8,500 U.S. troops into Eastern Europe.

For one thing, Putin couldn't care less. He's got about a couple of hundred troops around the area. 8,500 is an ankle bite.

For another, Biden and his team have been so far behind the curve on this Ukraine story that it looks like they can never catch up. Our own diplomats, intel people, and even Defense Department sources expect Russia to invade Ukraine.

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Look, I'm no isolationist, and I'm always America First in international relations, but the way to deal with Putin is by closing down his Nord Stream pipeline and shutting Russia out of the dollar-based international banking system. These kinds of brute economic sanctions is something that would surely get Putin's attention, and do great damage to his economy.

Close down the Russian central bank and their larger commercial banks from using the SWIFT electronic funds transfer system.

The dollar is the world's reserve currency. About 90% of foreign exchange transactions are denominated in dollars. Take Russia out of that system and their economy is literally sunk. Sunk. They can fiddle around with some Chinese banks, but China and its capital controls are a small sideshow digression in world finance.

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You say to Putin: no oil, no natural gas, no dollars, no banking. And then you pour a larger and larger weapons arsenal into Ukraine. That's a tough policy. That's what Biden should have done the minute he learned of the Russian troop buildup.

Many weeks have been wasted. The U.S. has been reacting to Putin, not defending its own agenda.

And now, the Biden's are digging a deeper hole by putting in more American soldiers which will prove to be extremely unpopular and Ineffectual. And, by the way, hate to say it, but the current Pentagon and national security group in this Administration has not earned any spurs after the Afghanistan fiasco. And, at the moment, I don't think we want them to expand their military horizon.

I don't know if we are appeasing Putin, that's a very toxic word. But I do know that we have been enabling Putin. And the former KGB now turned presidential autocrat understands this full well. We are playing his game, on his turf, with his narrative.

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And instead of talking about NATO flags, backed by the unreliable Germany, I sure wish we were talking about American flags, and American interests in freedom, democracy, and free-enterprise capitalism. 

And one final thought. This just in, and it blows my mind. 

Apparently, the Biden Administration has arranged for the payment of Iran's dues at the United Nations. Can you believe this? The Biden's have arranged to release $18 million of blocked Iranian funds, to be released to the Iranians so they can pay their dues, and -- get this -- have a vote in the U.N., so John Kerry and the State Department could once again bypass Congress and make a new deal with Iran.

Like I said, a perfect storm. And that's my riff.

This article is adapted from Larry Kudlow's opening commentary on the January 24, 2022, edition of "Kudlow."