Food price inflation

Larry Kudlow: A different plan to crush inflation

Today CPI Inflation Report came much stronger than expected and in fact there were many signs that not only is inflation not peaking, but in fact may be picking up. I’ll get to that in a moment, but I think it’s my duty to report President Biden’s response. “Exxon has made more money than God this year,” then he later criticized the oil companies for not drilling.

Why don’t they drill? Because they make more money and buy back their shares, which should be taxed. I’m paraphrasing his indecipherable word salad, but that’s the bottom line – blame the big tankers.

Later, his director at the NEC, Brian Deese, said that if you really isolate what is happening here, Vladimir Putin has decided to embark on this irresponsible war.

There you have it: the blame game – big oil, big pharma, big poultry, big, big, big, blame business and of course, blame Putin.


Food price inflation

A man shops at a Safeway grocery store in Annapolis, Maryland on May 16, 2022, as Americans brace for summer sticker shock as inflation continues to soar. (Photo by JIM WATSON/AFP via Getty Images/Getty Images)

Of course, what is driving inflation is the lagged impact of massive federal spending, borrowing and money printing and on top of that Biden’s sweeping environmental policies, that have made it virtually impossible to obtain a permit for almost anything – oil, natural gas, pipelines, highways, roads, bridges, even wind and solar farms will be stopped by the woke policies of the most radical EPA in history. And then add the Departments of Energy and Interior pursuing the same Green New Deal agenda.

So the oil companies don’t feel like making long-term investments because they read the papers and watch our show and they know all about Biden’s war on fossils and they think he doesn’t. there may be no fossil fuel industry after Biden is done. Frankly, I can’t blame them. Can you?

Either way, it turns out that the top CPI over the past three months rose 10.7% at an annual rate, a few points higher than the 12-month rate of 8.6%. .

Basic prices (excluding food and energy) have risen 6.3% over the past three months, which is higher than the 6% change over 12 months.

Wait, folks, I’ve got more numbers to come. Excluding food and energy, house and shelter prices are accelerating — 6.7% over the past three months compared to 5.5% over the past year. Another bad trend.

The prices of services, not good, but services: up 9% over the last three months, against 5.7% over the year and even removing energy, services are up 8% against only 5.2% over the year.


Used car prices are skyrocketing as well as new car prices. Health care costs are starting to escalate and electricity and utilities are out of the ordinary. Electricity, for example, is up 18.3% over the last three months against 12% over the year.

Consumer confidence dipped today in the University of Michigan report and inflation expectations in that tally rose again. The Atlanta Fed’s wage tracker is now up 6.1% in May. It’s another awkward number and the other day, Janet Yellenour friend from the hostage video, claimed that Europe and all major countries have the same inflation problems as we do in the US, but that’s a big lie.

A few months ago the San Fran Fed showed that underlying inflation in the United States was more than double that of OECD countries and former Clinton and Obama economist Jason Furman the other day in a WSJ editorial showed that the United States had about 3% more cumulative inflation points than the euro zone since the start of the pandemic.

In fact, recently core inflation in the United States in May was up 6.3%, as I mentioned, compared to just 3.8% in the eurozone, and wages in the United States are growing about twice as fast as in the euro zone. This is primarily because our fiscal policies in the US have created significant excess demand, while Europe’s nominal GDP remains several percentage points below trend.

MM. Furman, Sommers and Ratner have consistently warned against overspending, but neither Ms. Yellen, Mr. Deese, nor their boss, Mr. Biden, will admit it and never owning it means never understanding it.

Now I remember years ago the famous movie quote “being in love means never having to say you’re sorry”, but being in high inflation is really another matter.


Inflation by Janet Yellen

Treasury Secretary Janet Yellen speaks during a Senate Banking Committee hearing on Capitol Hill in Washington, Tuesday, Nov. 30, 2021. (AP Photo/Andrew Harnik/AP Newsroom)

Another thing Ms. Yellen refuses to learn: When she testified before Congress last week, she continued to push Biden’s FY23 budget, which has at least $5 trillion in new spending and $3.5 trillion in higher tax dollars – which would massively increase inflation and of course with today’s report real wages continue to plunge over 3% and frankly the economy is barely in balance , after falling 1.5% in the first quarter.

The Atlanta Fed’s latest GDP tracker is 0.9% for Q2. Unfortunately, the Federal Reserve, which got it badly wrong with the Bidens a year and a half ago, will now have to adopt a much more aggressive policy to raise its target rate and pull money out of the economy.

To quote my friend Steve Forbes, “If they can print money, they can unprint it.” There is probably no way out of this inflationary recession scenario, but as an optimist, I have a different plan.


First, make Trump’s tax cuts permanent and also reduce personal tax rates in a simplified code. This would increase the production side of the economy.

Second, deregulate energy and industry everywhere, also boosting the supply side of the economy. Third, freeze domestic spending. Fourth, defend the value of the king dollar. Wrapped in a balanced fiscal plan, this will skyrocket growth and crush inflation. It doesn’t have to be more difficult than that.

The cavalry arrives.

This article is adapted from Larry Kudlow’s opening commentary on the June 10, 2022 edition of “Kudlow”.

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