Kudlow: Russia is going to take a hit

We're in a period of crisis as Russia moves quickly to essentially take over Ukraine and greatly change the European political story for the worse, as Robert Kagan writes in WaPo today. 

There's a new frontline of conflict in Central Europe as Russian control over Belarus, Ukraine, probably soon Moldova, immediately threatening Poland, Slovakia, Hungary, Romania, and of course the Baltics. Whether NATO can defend the Baltics is an open question. Putin knows this. 

We'll talk geopolitics later in the show with former senator and NATO ambassador Kay Bailey Hutchison and Gen. Jack Keane. 

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I don't really feel like taking pot shots at President Biden’s presser today. I worry a lot more about American security than Biden's political standing. The latter is going down, but it's the former that we must preserve. I don't think the sanctions program is near severe as advertised. 

U.S. stock market indexes actually winding up in the green, oil up slightly to $93. The dollar exchange rate was strong. Gold prices actually fell $14, and the 10-year bond rate is about flat. 

The story is different in Russia as the ruble collapsed and the stock market fell about 35 percent. So, Russia is going to take a hit, and that's very good indeed. We will parse through the sanctions over time. Certainly, the lead Russian financial companies are being hit hard, and that's good. 

U.S. export controls are also good. Capital fundraising for Russia will be nearly impossible. Throwing them off the swift transaction system is not yet in place. Again, Mr. Biden’s diplomacy has utterly failed and Putin is on the rampage, but here's the part that just makes the hair on the back of my neck stand up: Joe Biden just can't help himself. 

If we're waging at least economic war with Russia, wouldn't we want more energy power in the U.S. and less energy power in Russia? In fact, if we're worried about gas prices and all the rest, wouldn't we want to increase American energy supplies, not reduce them? 

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At the existing rate of rising economic demand, wouldn't 14 or 15 million BPD, which is what we're capable of, or a massive LNG export campaign to help Europe and harm Russia be a good thing? Or, in general, wouldn't we want our American president, the leader of the free world, to tell our great American energy companies to turn the spigots back on full throttle in order to pin Putin’s ears back and reduce oil and gas prices? Nah, not Joe Biden. He just can't help himself.  

Take a listen: 

JOE BIDEN: You know, we're taking active steps to bring down the cost and American oil and gas companies should not, should not exploit this moment to hike their prices, to raise profits. 

Just keep on attacking our energy businesses. Just keep attacking business in general. 'Atta boy, Joe! Those leftie greenies just have a complete hold on you, and you don't have enough economic understanding of supply and demand to tell them why they're wrong. At current oil prices, Vladimir Putin could make $100 billion this year pure profit. 

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When Biden was inaugurated, west Texas crude was $53 a barrel. It averaged about $76 a barrel for the year. By some estimates, that gave Putin another $84 billion in extra cash, and that's before this crisis. Do we really want to finance Vladimir Putin’s crazy, ahistoric romanticized versions of Russian conquest? 

I don't think so, but we are by suppressing our great fracking and LNG export industries as the Biden administration is. 

C'mon, Joe! America first! Put your baseball hat on straight for a change. 

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