LARRY KUDLOW, FOX BUSINESS NETWORK: So, why is the Federal Reserve fighting the blue-collar paycheck boom? That is the subject of the riff. Before we get to Fed head J. Powell’s gobbledygook-and why President Trump is right and Powell is wrong about interest rates-first, let’s look at some good news. In her Pod Force One podcast, ace New York Post columnist Miranda Devine interviewed Treasury Secretary Scott Bessent. He spoke about the great success blue-collar working folks are having with higher wages in the first few months of the Trump administration. SCOTT BESSENT: Blue-collar wage growth-only other time it has been this high, wait for it-during President Trump’s first term. We have seen real wages for hourly workers, non-supervisory workers, rise almost 2% in the first five months. MIRANDA DEVINE: Why is that? SCOTT BESSENT: No president has done that before-the president’s emphasis on manufacturing. Biden opened the border, and it was flooded. And that, for working Americans, is a disaster, because it puts pressure on their wages. LARRY KUDLOW: So, Bessent is on target. Part of the jump in real wages is the decline of the inflation rate-CPI eased down to 1.4% annually since January. Powell doesn’t talk about that, but he should. During Biden’s years, as Jay Powell collaborated wkith big government socialism, prices rose by 20%, while real wages fell by 4%. Oof! The worst inlfation in 40 yeard. Another important point is the seeming end to illegal alien border crossings. Border Patrol agents did not release any illegal aliens into the U.S. in the month of May, there was a decrease from more than 60,000 released into the U.S. the year before. Joe Biden let in about 15 million. President Trump has let in zero. Border Patrol agents caught 8,075 illegals attempyting to cross the southern border, but none of them were released into the coutnry. That is a 93% decrease from May 2024. Biden released everyone into the U.S., rather than put them into an ICE bed or a hotel. That meant their hearings could last up to nine years or more-if they ever happened at all. So policies matter, and elections matter. Coming back to higher paychecks for working folks: nearly one million illegal immigrants have self-deported under Trump. That is leading to higher wages. DHS Secretary Kristi Noem implemented a self-deportation registration program, rebranding the “CBP One” app that Biden used to funnel hundreds of thousands of illegals into the country as “CBP Home,” which illegals can use to notify the U.S. government of their intent to depart. And there’s a financial incentive-a stipend of about a thousand bucks. So even the Washington Post claimed that a million foreign-born workers have exited the workforce since March. Data show that since January, 600,000 foreign-born workers have dropped, and native-born have jumped by a million. Now, is that a sign of a weaker labor market? No. As Scott Bessent pointed out, average hourly wages have accelerated. In other words, with fewer illegal immigrants, businesses are raising wages to attract workers at home. Tis is similar to President Eisenhower’s deportation round-up in 1954, that was driven ten-to-one by self-deportations. Hat tip to Andrew Arthur at the Cneter for Immigration Studies. Working folks’ take-home paychecks are rising and inflation is falling. Why is that not a win-win for the American economy? Well, go ask J. Powell. He doesn’t understand any of this. Actually, before we ask Powell, let’s ask President Trump first. PRESIDENT DONALD TRUMP: If you look at him, every time I did it, I was right 100%. He was wrong. Maybe I should go to the Fed. Am I allowed? I don’t think he’s political. I think he hates me. That’s okay. He should. I have been so nice to him. Let’s have dinner. Too late. I call him-too late. Come on, too late. Let’s have dinner. Every way-I’m nasty, I’m nice-nothing works. LARRY KUDLOW: Heck, I’m available for dinner, Mr. President. J. Powell and the Fed crowd still predict higher inflation and now slower growth and are stubbornly avoiding interest rate cuts-but they never tell us why. And it looks to be wrong. The Federal Reserve is the most opaque and least transparent government agency in Washington, D.C. They wield so much power over the economy-and make it worse. Change is on the way-yes, Mr. Trump will appoint a new Fed chair in May of next year. Meanwhile, all this reminds me of the great Winston Churchill description of old Soviet Russia: a riddle wrapped in a mystery inside an enigma.

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