Kudlow: I fear this will end badly

President Joe Biden was on the war path today. This morning, he announced a good move to end special trade status with Russia. Essentially, if Congress goes along, the U.S. will boot Russia out of the [World Trade Organization] and impose high tariffs on Russian imports. 

OK. That's good, but then, as usual, Mr. Biden went off the rails. He is still making the case that the 8 percent inflation problem, and the $110 oil problem, and the $4.33 gasoline problem are caused by Vladimir Putin. 

So, folks, it's Putin’s inflation. Then, he went on by saying from the moment of Putin's troop buildup on the Ukrainian border, according to Mr. Biden, the price of gas in January went up 75 cents. 

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OK, right there the Pinocchios are building. Here's some factoids: 

In January of 2021, gasoline was $2.35. In October of 2021, gasoline was $3.31. In November, which is actually when the Russian troops were first massing on the Ukraine border, gasoline was $3.41. 

In January of 2022, when Mr. Biden was flailing at diplomacy, the gas price fell a bit to $3.32, actually lower than November when the Russian troops started massing, then, $3.50 in February, and then it hit $4.33 today, March 11. 

So, the moral of the story is, yes, gasoline popped about 75 cents from February through mid-March as the invasion unfolded, but before that, for a year, gasoline prices went up about a dollar, or a 40 percent gain. 

And guess what? Between January 2021 and February 2022, oil prices went up $39 — from $52 to $91 — a 75 percent gain.  

During this time period — that is roughly a year before the Russian invasion and any real energy price impact — the U.S. CPI moved from 2 percent to 7.5 percent. Now, I will concede the last month for gasoline and oil prices, but it hasn't shown up yet in the CPI. That's coming, next month, but for Mr. Biden, what about the prior 12 months, which is kind of missing from his analysis? Ah, there was no sign of the Russians. Something else must have happened. 

FEBRUARY INFLATION: WHERE ARE RISING PRICES HITTING AMERICANS THE HARDEST? 

Let me suggest, first massive deficit spending — $2 trillion a year ago in March — and massive money creation by the Federal Reserve, thus enabling the deficit spending. The result? A massive increase of inflation starting way before Vladimir Putin’s military invasion of Ukraine and, as we learned from the February CPI report, which echoes the prior many months, prices are rising for everything — goods, services, cars, housing, rents, entertainment, leisure, commodities, everything. 

That is not a function of the bumbling Red Army in Ukraine. That is a function of too much money chasing too few goods, and there's more. 

Biden’s war against fossil fuels, creating a regulatory octopus whose many tentacles have strangling our oil and gas industry.  

With crazy metrics and left-wing climate ideological zeal, FERC, Interior, Energy, SEC, EPA, Federal Reserve and, of course, the White House have stifled the production of new oil and gas and pipelines.  

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Mr. Biden is wrong again on the Keystone — he said today it was not nearly finished — because industry sources say construction could be completed roughly one year from now, taking 800,000 new barrels of oil from Alberta. Mr. Biden said it would take two years or more, and now we're stuck with a major inflation problem and a major spending problem with no administration solutions in sight, and I fear this will end badly.  

The only hope: The cavalry is coming. 

This article is adapted from Larry Kudlow's opening commentary on the March 11, 2022, edition of "Kudlow."