Former Obama economic adviser Larry Summers was recently interviewed in the New York Times and made some grim predictions about where our economy is headed under Joe Biden.
If it feels like the 1970’s to you now, just wait. According to Summers, it’s going to get even worse.
It’s stunning to hear this coming from one of Obama’s people.
Hot Air has details:
I’m probably as apprehensive about the prospects for a soft landing of the U.S. economy as I have been any time in the last year. Probably actually a bit more apprehensive. In a way, the situation continues to resemble the 1970s, Ezra. In the late ‘60s and in the early ‘70s, we made mistakes of excessive demand expansion that created an inflationary environment…
And so now I think we’ve got a real problem of high underlying inflation that I don’t think will come down to anything like acceptable levels of its own accord. And so very difficult dilemmas as to whether to accept economic restraint or to live with high and quite possibly accelerating inflation. So I don’t envy the tasks that the Fed has before it.
…I think it’s very important not to be shortsighted and to recognize that what we care about is not just the level of employment this year, but the level of employment averaged over the next 10 years. That we care not just about wages and opportunities this year, but we care about wages and opportunities over the long-term.
And the doctor who prescribes you painkillers that make you feel good to which you become addicted is generous and compassionate, but ultimately is very damaging to you. And while the example is a bit melodramatic, the pursuit of excessively expansionary policies that ultimately lead to inflation, which reduces people’s purchasing power, and the need for sharply contractionary policies, which hurt the biggest victims, the most disadvantaged in the society, that’s not doing the people we care most about any favor. It’s, in fact, hurting them.
It’s hard to imagine things getting worse, but that’s what we have to prepare for.
No one wants Larry Summers to be right about where the economy is going — perhaps not even Larry Summers.
But so far, he’s been a lot closer to the mark than his critics. So what if what he’s saying now is true, too? https://t.co/KEOm2nj1q4
— Ezra Klein (@ezraklein) March 29, 2022
Step one is for Republicans to take over next fall.
At least that will freeze Biden in his tracks.