As we’ve said many times, Americans are smarter than President Biden thinks they are. No matter how many displays of cognitive dissonance from Mr. Biden, or falsehoods, or — to use a phrase I don’t like to apply to presidents, but must in this case — outright lies, Americans see right through it. 

You simply cannot tell the public that there is no inflation when prices for food, groceries, electricity, natural gas, and cars are rising sharply. Even with the recent drop in gasoline prices, they’re still up 26 percent over the past year.

As a result, working people have been forced to take a 3.4 percent pay cut during that period.

That’s why I don’t blame the railroad union workers for demanding higher wages. They’re just trying to catch up to higher prices. They don’t control the government spending and monetary spigots. They are victims of very bad policies.

Mr. Biden’s zero-inflation “celebration” on the White House lawn was a slap in the face of these people. When he says he “inherited” an economic crisis and turned it into a “resurgence,” it’s just factually wrong.

People know this. The fact is, he inherited a V-shaped resurgence from President Trump, and turned it into a crisis. No number of James Tayler songs is going to change that.

The economy was growing at roughly 6.5 percent in the first quarter of 2021, with about 1.5 percent inflation. So far this year, the economy has contracted into negative territory. And more may be coming. 

The Atlanta Fed’s GDP tracker has been marked down for the third quarter to just 0.5 percent from 2.6 percent. The CPI is rising 8.3 percent ahead of a year ago, and of course people feel this in their bones and their budgets. The Cleveland Fed’s median CPI, which is a very useful measure of core inflation, is now up to 6.7 percent after rising month after month. And, as the economy sinks into recession, we are experiencing a price-wage spiral that is embedded into the economy.

Milton Friedman called this “inflationary recession.” Nowadays we call it “stagflation.”

Biden Democrats are now at war with the Federal Reserve. The former keeps spending and borrowing like there’s no tomorrow, while the Fed is tightening money. This is not good. Actual inflation is three to four times the Fed’s 2 percent target.

Team Biden is giving Jay Powell & Co. no alternative but to tighten even more aggressively, which is going to harm the economy even more. This is frankly not what anybody wants. Including me. 

Instead of opening up all the energy spigots, or reducing taxes, or removing business regulations, the Bidens are closing the spigots, raising taxes, and marching toward big-government socialism with their massive central-planning regulatory assault.

For now, the supply side is dead, while Democrats scratch every radical, progressive programmatic itch they can. Think of it this way: The economy has no oxygen. Its veins are completely clogged.

Mr. Biden continues to say this isn’t so. But the facts clearly speak otherwise. Again, Americans are not stupid.

There are lots of issues in the air, but none will be as dominant come November as America’s economic descent.

Let me end on an optimistic note. Mr. Biden’s failed policies will be changed. Why? Because the vast majority of people know they must be changed. Men and women of good faith and common sense are going to change them simply because people know change is absolutely essential to making America great again.

That is why the cavalry is coming. 

From Mr. Kudlow’s broadcast on Fox Business News.