LARRY KUDLOW: Biden’s emphasis on manufacturing is baffling

I hate to say it, but Joe Biden’s “Bidenomics” is really a lot of Biden baloney. I don’t mean to be personally disrespectful, but he is incapable of telling the truth about the poor state of the American economy. 

To quote my hero, President Abe Lincoln: “You can fool all people some of the time and some people all the time, but you can never fool all people all the time.” 

The AP-NORC University of Chicago poll showed only 30% of Americans believe the economy’s good, while 69% believe it to be poor. Another poll from the Democracy Institute showed only 26% approve of Joe Biden’s handling of the economy, while 63% disapprove.   

What is so baffling about Mr. Biden’s recent economic speeches is his emphasis on manufacturing. He keeps making the case that we’re in some kind of manufacturing boom, but the numbers show we’re in a manufacturing recession. Global manufacturing is in contraction, especially in the U.S. 

JOB OPENINGS DIP BELOW 10M IN MAY BUT REMAIN HIGH 

Hat-tip to my pal Peter Boockvar on Substack, who writes that the June S&P global manufacturing PMI was 48.8 — the lowest of the year, and below 50 for the 10th straight month. The June U.S. ISM out Monday was under 50 for the eighth straight month.   

Manufacturing production in May was down 0.3%. Business equipment production, which is the key to manufacturing, and probably one of the absolute vital economic indicators, has been negative for two of the past three months. Then we checked on Mr. Biden’s boast that the construction of new manufacturing is booming, up by something like $500 billion, depending on which speech he gives in whatever town he happens to give it.   

So, we checked and in inflation-adjusted terms, the accompanying chart shows real private investment was no better than it was back in 2015, eight years ago, and has barely recovered in the most recent business cycle.   

So, I don’t know where the president gets this stuff. Look at the red line, OK? Now, wait a second — he’s phonying up the numbers by using nominal construction, but that’s because he’s in complete denial about Bidenflation. It’s a Bottomless Pinocchio, and he keeps saying it.

Of course, in his speech today, he repeats the original Bottomless Pinocchio that he cut the budget deficit by $1.7 trillion — and no one else has ever done that. Listen and weep:  

PRESIDENT BIDEN: I cut the deficit $1.7 trillion in two years. Nobody has ever done that — cut the debt 1.7.

It’s still the original Bottomless Pinocchio, because actually he’s spent $6 trillion, which generated a huge inflation, and that inflation continues to this very day. Bidenflation overshadows Bidenomics. That’s the man’s problem. The level of consumer prices has increased nearly 16% since he came into office. The most recent core CPI report is running 5.3% ahead of last year. The Cleveland Fed’s median CPI is 6.7%.   

Meanwhile, in Mr. Biden’s first full year in office in 2022, plus the first half of ’23, he has produced an average real GDP growth of 1.3% at an annual rate. That isn’t really growth. That’s stagnation, combined with high inflation and, on top of all that, real wages under Bidenomics continue to slump 26 straight months for an average decline of 2.1%. These are reasons why Bidenomics has failed.   

Today, for example, the ADP private sector jobs report was up almost 500,000, but the stock market cracked by nearly 400 points because people fear inflation, which means the Fed will keep raising interest rates, and all that represents a total lack of confidence in Bidenomics.   

I have no idea if the ADP report is accurate or what tomorrow’s official BLS jobs report will bring, but stocks would not fear more people working if we had confidence in low inflation, limited government, minimal regulations and low tax rates, but, wait a minute: That’s Reaganomics or Trumpanomics. It sure ain’t Bidenomics. 

This article is adapted from Larry Kudlow’s opening commentary on the July 6, 2023, edition of “Kudlow.”