You’ve read my double-barreled criticism of the so-called Inflation Reduction Act — a $750 billion monstrosity that does not reduce inflation, does not reduce global warming, does raise taxes for middle-class working people, will deepen recession, and has not one iota, scintilla, whit, shred, or morsel of economic growth incentives — and I’m not alone: Just 12 percent think the bill will reduce inflation, an Economist/YouGov poll shows, and 40 percent think it will increase inflation.
Speaking of recession, we had a soft retail sales number today, and the GDP tracker from the Atlanta Fed dropped to 1.6 percent growth in Q3, from 2.5 percent just 10 days ago. As you know, GDP declined in the first two quarters of the year.
Big-box retailer Target reported a 90 percent drop in profits, and sales fell way below estimates. Housing starts and permits have fallen significantly. A new TIPP poll showed 62 percent of Americans believe the U.S. is in a recession.
As the Biden Democrats have repealed President Trump’s successful tax-cut, deregulation, and energy dominance policies in a mere 20 months, the economy has turned to bust from boom.
Until the GOP recaptures Congress and saves America by repealing this bill, we’re going to have to live with this monstrosity. So, I want to point out two major energy provisions you may not be familiar with. Both are insane.
First is the national climate bank.
A $27 billion government bank will be administered by the U.S. Environmental Protection Agency, the EPA. Now, you might ask what banking or credit risk or payment facilities the EPA has. If you guessed “none,” you’d be right. This is a green “slush fund” to hand out favors to Biden world’s political allies.
There’s a $7 billion bucket for low-income and disadvantaged communities to reduce greenhouse gas emissions. There’s an $8 billion bucket also earmarked for low-income and disadvantaged communities to fund direct or indirect investments in renewables lacking financial access, and a third bucket of $12 billion to be used broadly to support renewable projects nationwide.
In other words, no strings attached. I think it would be much more efficient if the government were to just write a direct check to the Democratic National Committee. Right? That’s not all.
Also buried in the legislation is $250 billion for the energy department. For context, the entire DOE budget in FY 2021 was around $40 billion. Now, to be sure, the $250 billion is predominantly loan guarantees, though there will be direct lending in there too.
Here, too, you might ask what banking experience the energy department has or how many credit risk officers it has employed. Again, if you answered zero, you’d be right. Washington wags are calling this Solyndra on steroids. Not bad.
This is a bit like the IRS story. Remember, the bill created a second IRS by doubling its budget and the number of its agents: Double your pleasure, double your fun.
When it comes to the Energy Department, it’s 600 percent your pleasure and fun. I can see a Solyndra Industrial Complex growing up overnight on this one.
In the spirit of empirical accuracy, it behooves me to note Bjorn Lomborg’s research, using the UN climate model, that calculates that the $400 billion climate spending binge will reduce global warming, best case, by 28 thousandths of one degree Fahrenheit. Or, worst case, by nine ten-thousandths of one degree Fahrenheit. In other words, nothing.
Sure hope the cavalry’s coming to save America and repeal this bill.
Larry Kudlow was the Director of the National Economic Council under President Trump 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.