Larry Kudlow: Americans are pessimistic amid high inflation

In his first interview in a very long time, our president, Joe Biden, launched quite a few whoppers while talking to the Associated Press. 

I think my favorite one is his claim that the idea that spending causes inflation is "bizarre." This is a double whopper. 

At this point, outside of the White House building, virtually no one doubts that excessive spending, including the $2 trillion rescue package in March 2021, was the cause of inflation—virtually everyone. 

That's why, for example, the latest Fox News Poll shows him at a 29% approval rating on the economy vs. a 67% disapproval, and 23% to 71% on inflation specifically. Joe, what's "bizarre" are your poll numbers. 

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Leading Democratic economists have said all along that massive government spending added stimulus into a Trump economy that was already a V-shaped recovery coming out of COVID. Business people everywhere have made the same point. It's just common sense and yes, the Federal Reserve bought up the deficit spending bonds and printed far too much money. 

Uncle Joe, give this one up. Would you, please? You've basically gone from no inflation to transitory inflation, to Putin's inflation, and in the last few days, to ExxonMobil's inflation. 

Oh yes, and Exxon didn't pay their fair share of taxes, so they're not "patriots," And you're going to use your emergency powers to go after them. 

Trouble is, ExxonMobil has invested $118 billion in new oil and gas supplies over the past five years, compared to a net income of $55 billion and basically increased their production by 50%. In 2020, they lost $20 billion, but here's the best—they paid $40 billion in taxes last year. 

Think that qualifies as paying their fair share? It's a lot like Elon Musk paying $11 billion in taxes last year. I'd say they both qualify. 

Trouble with Joe Biden's attack on fossil companies is that his own policies have resulted in closed refineries, shuttered pipelines, denied permits—all in pursuit of ending fossil fuels, which was his all-too-clear campaign pledge. 

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Another whopper is that every other major industrial country has higher inflation. Well once again, that's just not true. Sorry, Joe. Inflation is lower in China, Saudi Arabia, Japan, Switzerland, Australia, France, South Korea, South Africa, Canada, Italy, India, Mexico, Germany and the entire Euro area. 

The San Francisco Fed, a month or two back did a study that core inflation in the U.S. is running significantly higher than core inflation in the OECD countries. 

More recently, leading Democratic economist Jason Furman wrote in a WSJ op-ed piece that a large gap has emerged between core inflation in the U.S. and is running about twice the rate as in Europe. 

What's more, U.S. spending stimulus to boost aggregate demand was substantially higher than Europe's and nominal wage growth running at roughly 6% annually in the U.S. is about double the 3% wage rate in the Euro area. You were right in one way, Mr. President. Your policies are changing peoples' lives, but for the worse, not for the better. 

With essentially 10% inflation, falling real wages, record gas prices, huge increases in grocery foods, no baby formula on the shelves, a couple million illegal people blowing through our border, your radical progressive defense of woke sex, gender and racial education in the classrooms, defending the teacher's union and labeling the parents "domestic terrorists," a massive crime wave that continues, and your complete bungling of Afghanistan—well the effect on peoples' lives shows up in even the latest left-wing Politico poll, with only 26% saying America is on the right direction and 74% saying we're on the wrong one. 

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You're on to something that national morale is really down for all the reasons I just gave. They're not positive reasons, and you're also on to something when you say the need for mental health in America is skyrocketing. But, sir, the COVID is only a small and fading part of this. 

What's really happening is a collective national high anxiety over inflation and gas prices and baby formula and all the rest of your failures. People are pessimistic, not optimistic. 

The economy is on the front end of a recession, real wages are falling, and so are stock markets, where the middle class is invested in their retirement accounts. Folks are stressed out during times like this. 

Alcoholism and drug use are both up. It's part of the national stress. It's damaging to our mental health. Show me a time when the majority of folks are making good money, with good jobs, with low prices, with easy gas at the pump, with super market shelves well-stocked, with a high labor participation rate, and I'll show you a happy country. 

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Right now, this nation under your policies has once again become a welfare nation. You are paying people not to work, you have thrown out the window work requirements in return for federal assistance, and the inevitable result of that is unhappiness, low self-esteem, high anxiety, continued stress, and plenty of mental health problems. 

Your efforts to transform this country into some kind of woke progressive paradise have completely failed in just 18 months. It's time for a change. Make that a big change. The cavalry is coming.

This article is adapted from Larry Kudlow's opening commentary on the June 17, 2022, edition of "Kudlow."