Larry Summers, who held economic positions in the Clinton and Obama administrations, told PBS’s “Firing Line with Margaret Hoover” on Saturday that the Federal Reserve was, “in the face of a housing market on fire,” “intervening in the markets,” adding, “Seems like that’s adding gasoline.”
Summers’ warning comes as jobs report numbers have seen abysmal months under Joe Biden and inflation has skyrocketed.
“If you looked at how the economy was coming into this year, we had total wages and salaries coming to people were 20 or 30 billion dollars a month lower because many of them had to be home because of COVID and the economy was slowed,” Summers said. “But we put in a stimulus that was putting into the economy more than 200 billion dollars a month. And so when you take a hole and you overfill it, you’re likely to have problems. That started to manifest itself. It manifests itself in the fact that even though people say there’s high unemployment, the number of businesses with vacant jobs is higher than it’s ever been. Another indicator that economists use to kind of sort things out is how many people are quitting, because when times are really tight in the labor market, people feel like they can quit. So, on all these kinds of indicators, you’re seeing, it seems to me, some inflationary psychology take hold.”
“And I think we know that inflation’s like a lot of other things, it’s a lot easier to prevent than it is to cure,” he continued. “And I think the credibility of policymakers, including those at the Fed, is much easier to preserve than it is to restore.”
https://www.dailywire.com/news/top-democrat-economist-warns-of-biden-inflation-hard-to-put-out-fire-without-doing-a-lot-of-damage
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