LARRY KUDLOW: Never bet against the Trumpian America First economy

If any of the Iranian thugs from the Islamic Revolutionary Guard Corps think a minor bump up in gas prices is gonna kill the American economy, and force President Trump to withdraw our military and make some watered-down Obama-Biden deal, those thugs had better think twice. Not only is Mr. Trump not going to back down on his key demands to end Iran’s nuclear capability, and transfer the enriched uranium to America from Iran, and stop the state-sponsored terrorism, and long-range missile building, but the economic fact is the American economy is doing quite well despite the bump in gas prices.

It’s the Iranian economy that’s sinking and will continue to sink with the United States Navy’s blockade, basically ending Iran’s money and ability to pay their IRGC troops. The IRGC controls about a third of Iran’s economy. And roughly half of their energy revenues. They’ve been stealing and looting from the Iranian people for decades. It’s like a mafia-run operation. And Mr. Trump and Treasury man Scott Bessent are putting an end to it. Secretary Bessent spoke to me last night about Operation Economic Fury.

"The president gave the operation, gave the order for maximum pressure campaign more than a year ago," Mr. Bessent said. "It was that pressure that brought the Iranian economy to a standstill," and "the largest bank in Iran collapsed. The central bank had to monetize the debt, and that created massive inflation." He added that "their currency is down about 60 or 70 percent versus the U.S. Dollar, so they’re in the middle of a currency crisis. And what we’re doing now is we’ve been in a long race and we are sprinting for the finish line."

Now, as far as the American economy. Lots of good economic numbers today and a record-breaking stock market. Over the past year, real GDP has increased 2.7 percent. If the Democrats hadn’t shut down the economy last winter, we’d have had growth higher than 3 percent. Yet inside that number the One, Big, Beautiful Bill and its 100 percent cost expensing has produced an amazing business investment boom. It’s up by 17 percent in the first quarter and almost 10 percent over the past year. It’s huge. And don’t forget record-breaking tax refunds from the One, Big, Beautiful Bill used by more than 50 million Americans, which is offsetting the temporary gas price spike, and even then consumer spending doing better than you think, up nearly 2.5 percent over the past year.

And more recently in April, Redbook consumer sales year to year in April rose almost 7 percent. Our energy dominance is producing record-breaking exports of oil, diesel and gasoline fuels. Here at home we’re setting oil production records.

Here’s one other thing, inflation numbers came in a bit on the high side today, but call me skeptical, the Cleveland Fed’s median consumer price index is up only 2.7 percent over the past year. And its 16 percent trimmed mean, a weighted average of recent inflation statistics, is up 2.6 percent. Unit labor costs rose by 2.4 percent. And the big, big story is profits, the mothers’ milk of stocks and the lifeblood of the economy. Profits drive business, and business drives the economy. Profits and profit margins are breaking records, running 15 percent or better, and that’s driving productivity. And that’s producing an economy that’s the envy of the world.

Once the world normalizes, the American economy will grow even faster, and the inflation rate will move even lower. Remember this, though, it is the strong American economy that is creating the resources to destroy gruesome Nazi-like regimes such as Iran. Never bet against the Trumpian America First economy.