Larry Kudlow: What is probably the worst part of Manchin-Schumer bill has been removed
Larry Kudlow: What is probably the worst part of Manchin-Schumer bill has been removed
Larry Kudlow weighs in on inflation and the Democrats’ social spending
Larry Kudlow: This is a pathetic agenda
Some good news today, in two parts. First, more Americans are working. That is unambiguously good. Corporate payrolls up 471,000 in July, with a 5.2% year-to-year wage increase, 6.2% if you’re a blue-collar worker.
The unemployment rate is down to 3.5%. The small-business oriented household survey, not quite as strong: +179K.
So, in the first half, economy was negative in recession. We’ll see about Q3 after the good jobs report. We’ve still got a big inflation problem, although market price indicators have tailed down.
The Fed has got more work to do to drain its balance sheet and bring its Fed funds target rate above the inflation rate. I don’t know where that will land, but 2.5% is still way too low. My guess is base core inflation is probably around 5 to 6%, but let us cheer that more Americans working.
Sen. Joe Manchin (D-WV) leaves the U.S. Capitol following a vote on August 03, 2021 in Washington, DC. (Photo by Kevin Dietsch/Getty Images / Getty Images)
By the way, if we had decent supply-side economic policies with lower tax rates and deregulation, we would have nothing to fear from 5 to 6% wage increases, but we have a heavily overregulated economy and plenty of threats and more is coming.
Think of the right policy as tax cuts and king dollar. The former generates growth incentives, the latter holds down prices. That’s the optimal policy mix. Second piece of good news: capex investment is being carved out of the Manchin-Schumer monstrosity.
Courtesy of Senator Kyrsten Sinema, probably the worst part of this dumb bill has been removed. Taxable profits will replace minimum corporate book profits, at least as far as 100% expensing of plant equipment and technology is concerned.
