Inflation blew in hot today, with a producer price number that was twice as high as consensus and up 1 percent in January, pushing the total to 9.7 percent for the past year. It’s a very bad number, and with all the excess money floating around the financial system and the economy, wholesale price increases are leading to consumer price jumps. In this high-inflation environment, corporate pricing power is very strong.Some ugly details: food prices up 12.8 percent, energy 28.8 percent, construction 16.1 percent, services 7.7 percent. In other words, broad-based price gains. Something’s gotta be done about this.I have mentioned the memo from a former senator, Phil Gramm, saying spending must be paused and welfare must be reformed. I’m adding that money supply growth must be reduced. The House speaker, Nancy Pelosi, didn’t get the Gramm memo, but I’ve been hoping somebody in Washington is thinking about this. So, it’s good to see that Senator Toomey has managed to convince 11 other Republicans on the banking committee to boycott a vote on President Biden’s Fed nominees. Bravo, Mr. Toomey, you are a true free-market conservative. And one with a backbone. At issue are a bunch of ethics allegations aimed at Sarah Bloom Raskin, who was nominated to be the Fed’s vice chairwoman of supervision. It’s possible she used her insider status as a former Treasury and Fed official to get her fintech company a coveted master account with the Fed. No other fintech company before, or since, has gotten that privilege.Consequently, the charge of unethical influence peddling after leaving the Obama administration’s Treasury is in the air, and the Kansas City Fed finally acknowledged that Ms. Raskin called about this special privilege for the fintech company on whose board she sat.The issue of possible unethical influence peddling is not the only determining factor. Also being weighed are the core beliefs of the Biden nominees. This is a pivotal, historic juncture for the central bank, which has an unbelievably difficult inflation fight in front of it. Now, every president deserves to make nominations, be they conservative or liberal. Elections have consequences, But, presidents don’t deserve to nominate radicals who are far out of the mainstream.On the Fed, for example, one longtime board member Lael Brainard, is a liberal with a lot of experience. So her nomination as vice chairwoman is justified. I may be wrong, but I don’t think she’s a far-out radical.However, Ms. Raskin is one, a green new deal climate fanatic who numerous times has publicly stated that the Fed should allocate bank credit away from fossil fuel companies. This is radical because the Fed’s not in the credit allocation business, and also radical is the idea that if the fossil fuel companies went bankrupt and stopped production, the shortage of oil and natural gas would blow inflation sky-higher, much worse than today. So, Ms. Raskin’s climate views are completely at odds with the Fed’s mission for price stability. And once the Fed has to take the punchbowl away from sky-high inflation, it will lead to a deep recession and high unemployment — and minorities will get hit the hardest.The other radical nomination is that of Lisa Cook from Michigan State, who has called for assistance to looters and rioters, believes that America’s racist, and argues for slavery reparations. Although she has an economics Ph.D., she has never written on anything to do with monetary policy or the Fed — or about inflation or macroeconomics. Her most cited paper is about providing credit to small businesses in Russia. These are radical views. She is completely unqualified.Right now, we need people who will defend the value of the dollar, sharply cut back on the nation’s money supply, advocate for a spending pause in Congress, and in general support a hawkish view on curbing inflation. Like, for example, James Bullard of the St. Louis Fed, who really is the only guy out there who has this story right. Except, of course, for our steely backboned friend, Senator Toomey.________From Mr. Kudlow’s broadcast on Fox Business News.
