Kudlow: Maximizing growth in America means minimizing government

Good evening folks. Let me shout out 'happy Thanksgiving' right at the top.

It's a great American holiday. We will discuss later in the show why we must not let the 'woke' progressives demean or destroy both the holiday and the meaning of this great holiday. So much of it should be about gratitude and abundance. For we have been endowed by our Creator with the greatest country in the history of history.

Now, to me the biggest story today is a series of massive blowout economic releases. In the spirit of Thanksgiving, I rate this a three 'gobble' story. 'Gobble, gobble, gobble.'

First, the lowest number of unemployment claims declining to just 199K. The lowest since 1969. One leading wall street firm called it a game-changer.

Also, continuing unemployment claims in all programs including pandemic emergency compensation has collapsed.

In fact, since the federal 'plus-up benefits ran out in early September nearly 9 million people have stopped receiving unemployment benefits.

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This will translate into very big job numbers in the months ahead. Just as we've had in the last couple months. If we quit paying people to stay home, then guess what? They'll go back to work. It's the American way.

And wage rates are strong and work-inducing. In fact, there are virtually no more lay-offs in the American economy. On top of that, we had a big consumer spending number.

Real personal consumer spending is now up nearly 7% over the past year. And nominal spending pre-inflation up an incredible 12%. What's more. Wage and salary income up nearly 10% over the past year.

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And, the fed's inflation target called the 'PCE deflator' jumped six tenths in October and is now 5% above a year ago. The Atlanta fed's GDP now has moved up to 8.6% for Q-4 ending December.

An extrapolating 5% inflation, which may well be higher in November and December. Nominal GDP could be up 15% or 16% in that quarter. You may recall I first started talking about this blowout a couple of weeks ago when soaring retail sales were published. But there's still more.

A revised GDP report for the last quarter now shows a massive increase in profits. Overall profits up 21% in the past year and core profits -- domestic non-financial profits up 25% for the last four quarters.

Of course, profits are the mother's milk of stocks and the lifeblood of the economy. Left-wing progressives hate profits. But you can't have more jobs at higher wages unless businesses are generating big profits.

The trouble with the progressives is they love employment, they just don't like employers. It's like my dear friend and mentor, the late jack kemp who used to argue that you can't have capitalism without capital.

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And of course, not only is uncle Joe Biden slamming businesses left and right, attacking excess profits, blaming business for higher gasoline prices and inflation overall, nearly all of his reckless tax hikes are aimed at destroying capital, profits, investment, and therefore assaulting jobs, wages and average family incomes.

But whatever Joe says, profits are booming. The economy is strong. and regrettably, inflation continues to rise. That's why I call these numbers a 'blowout.' And let me add, economic growth by itself does not cause inflation. More people successfully working does not cause inflation. The fundamental cause of inflation is when the Federal Reserve creates too much money chasing too few goods.

And the fed keeps pouring new money into the economy. Even though the economy doesn't really need it or want it. And Biden policy with a $5 trillion budget, that is being financed by our central bank, with for example a 13% increase in M2 on a yearly basis, a 12% jump in U.S. bank deposits, therefore continuing to create money and inflation that people do not want.

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And then of course the Biden tax hikes are damaging growth incentives to invest and work, thereby shrinking the supply side of the economy. So that's why we have too much demand, too much money behind the demand, and too few goods. Now that is not the case this moment on the supply side damage.

But if the 'bankrupt, benefits, bureaucracy' bill passes, that will be the story. Right now we're in a boom. Rising profits, falling unemployment, and zero interest rate free money. I fear that unless the $5 trillion budget is paused for another year at least, and unless the fed wakes up and starts fighting inflation instead of climate change or other wokeisms, this story is not going to end well. Please don't get me wrong. I love prosperity. I love abundance.

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In fact, years ago I wrote a book called 'American Abundance.' But in order to maximize growth we need to minimize government. The Biden gang does not understand this. and that's our challenge on Thanksgiving eve. So, save America. Kill the bill. 'Gobble, gobble, gobble.' And that's my riff.

This article is adapted from Larry Kudlow's opening commentary on the November 24, 2021 edition of "Kudlow."