Inside the Meeting When ‘Great Man’ Shinzo Abe Dazzled the Trump Team

To begin, I want to extend my sincere condolences to the family of Shinzo Abe and to the people of Japan. During my three years in government, I got to know the former prime minister well. He was head-and-shoulders above all the heads of state. He was a brilliant politician, a great leader of Japan. President Trump, with whom I spoke earlier today, regarded Abe as his closest friend and ally. I once witnessed, during a UN bilateral meeting with Mr. Trump and Abe, the single best presentation I saw in my three years as NEC director and international sherpa. Abe calmly presented my boss with a roughly 50-page chart book showing clearly that Japan is America’s top investor and manufacturer. Indeed, more Japanese cars are made in America than in Japan. In fact, more Japanese cars were made here than produced by several U.S. carmakers. Jaws dropped in that room while the Japanese prime minister went through his paces. Talk of trade protectionism was cast aside permanently and instead the Abe chart book opened the door to several U.S.-Japanese trade improvement deals. Abe was always kind to me, personally, especially after my brief — and thankfully minor — cardiac episode. Every time he saw me at the White House, at meetings at the G-7, the G-20, the UN, he would come up to me to see how I was doing. I appreciated that. Abe was a great Japanese patriot. America’s most loyal supporter. In plain English, he was what you call a “great man.” Again, my condolences to his family and the Japanese nation. May God watch over him. May he rest in peace.***Now, onto today’s jobs report, which virtually guarantees a 75-basis-point Fed policy rate hike in three weeks, and another 75-basis-point rate hike in September. Those would bring it to 3.25 percent, still way below the base inflation rate of 6 percent.The Fed right now is more determined to fight inflation than recession, or so says Chairman Jay Powell, who has recently regained his price-stability manhood and is daily growing new hair on his chest. Yet today’s jobs report was not as strong as many think. While revised non-farm payrolls did increase by 300,000, the household survey fell by 315,000 and over the past three months has dropped by 116,000. This survey depends more on family members and small businesses and is frequently a leading indicator at turning points in the economy.Also, production worker wages increased 6.4 percent over the past year, but that’s 2 percentage points below the CPI inflation rate. So working people are being paid more, but it buys less. And disposable income after inflation is down 3.3 percent for the past year. So, I still think we’re on the front end of a recession. Caveat emptor. ***That brings me to my third point: It is sheer folly, given the high inflation and a likely recession, for the Biden Democrats to float a trillion-dollar spending spree accompanied by a trillion-dollar tax hike. The spending would steepen inflation and the tax hike would deepen the recession. Moreover, this new scheme to extend the 3.8 percent net investment tax to pass-through companies such as LLCs, wholly owned proprietorships, and subchapter S companies, and put the money into general revenues and then swear up and down to the American people that it’s really going to finance the Medicare hospital fund: This is a phony gimmick, in my view. That fund is supposed to be financed by payroll taxes, not general revenues. This would be a big break from the past.They’re going to have to somehow create language that would earmark or designate that these taxpayer funds would in fact go to Medicare and then convince the reconciliation people to score it. That’s just one of many gimmicks likely to come in this insane BBS. Save America. Kill the Bill. From Mr. Kudlow’s broadcast on Fox Business News.

Inside the Meeting When ‘Great Man’ Shinzo Abe Dazzled the Trump Team

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