LARRY KUDLOW: It looks like Kamala still hates business

Looks like Kamala still hates business and that’s the subject of “The Riff.”

Kamala Harris is expected to give a speech on Friday outlining some kind of economic program, perhaps aiming at the ongoing Biden-Harris virus of high prices. You just watch, she’s going to blame business. She always does.  

Earlier in the Biden-Harris administration, when prices started skyrocketing, they immediately blamed businesses for price gouging, something called “excess profits,” and another thing called “corporate greed. ” And, then, of course, they told us the problem would be transitory.

Well, they were wrong on all counts.  

So, they formed a task force, consisting of the Justice Department, the FTC, the Agriculture Department, and a variety of others – and came up with nothing. There was no proof that food businesses were price gouging, or neighborhood gasoline pumps were sneaking in excess prices and profits, or anything. No proof! 

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Not the oil companies, not the poultry companies – nobody. Then they blamed “junk fees,” which may be a nuisance, but have nothing to do with inflation.  

Then the San Francisco Fed came out with a study that corporate price gouging has not been a primary driver of U.S. inflation. Ouch. But I virtually guarantee that Kamala is going to try and make that price-gouging case one more time, because even with her recent flip-flopping on all of her left liberal progressive positions, she – still today – does not like business. 

Government is never wrong in her book, it’s always business that’s wrong. So, here’s something to consider: Even today, the level of consumer prices is up over 20% during the 42-month term of Biden-Harris, including a 22% hike in grocery prices, 22% increase in rent, a 32% rise in electricity, and a 50% increase in gasoline. Or, in July alone, the price of fresh fruits and melons jumped 10%, beef prices 8%, coffee prices over 3% and real weekly earnings for typical families are down 4% – because prices have increased higher than paychecks. 

So, the long tail of inflation continues to plague Middle America. Meanwhile, the budget deficit for fiscal year 2024 is expected to hit just south of $2 trillion, nearly 7% of GDP. And this is in peace time, with no national emergencies, and an economy that’s only recently left full employment.  

The CBO baseline shows $2 trillion deficits as far as the eye can see, with publicly held debt rising to 120% of GDP. Ms. Harris utters not one peep about this insane federal spending that really is the root cause of this particular unfortunate cycle of inflation. Not a peep. And you won’t hear about it in her speech on Friday either.  

The Bidens’ regulatory attack on business and their constant war against fossil fuels, along with their repeated efforts to raise taxes, have muzzled the productive supply side of the economy that creates goods and services. But while they’ve thrown a wet blanket over production and work incentives, they continue to increase demand through government spending and deficits.  

Regrettably, the Jay Powell Fed has been a handmaiden to the Biden-Harris spending profligacy. Too much money chasing too few goods breeds inflation. So, the year-to-year CPI has slowed to 2.9% for all items, and 3.2% excluding food and energy. 

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That disinflation will not last as long, as Democrats continue their free-spending and borrowing ways. American businesses didn’t force higher government spending, or borrowing, or regulating, or taxing.  

Those mistakes came from government action and unless that government action is curbed, inflation is likely to flare up again, especially if the wrong crowd is re-elected to the White House. 

This article is adapted from Larry Kudlow’s opening commentary on the August 14, 2024, edition of “Kudlow.”