Former Treasury Secretary Larry Summers on Thursday warned the U.S. economy could slide into a recession as the Federal Reserve takes what he described as long-delayed action to cool the hottest inflation in nearly four decades. Summers, during an interview on a Bloomberg Economics podcast, said the U.S. central bank has been late to spot the dangers of inflation, and that steps it takes now to mitigate soaring prices risk tipping the economy into a slump.
We are already seeing a bit of an economic slump and the Feds are looking at as many as three rate increased next year to help curb inflation. Generally you raise interest rates to control an out of control growth spurt, but in this case we are looking at a fairly sluggish economy with a need to raise rates due to the unprecedented record-setting inflation.
So Summers here is echoing what others have been saying, in spite of being a former Clinton and Obama guy. The former Treasury Secretary is someone who one might expect to cheerlead an economy that is being run entirely by a Democratic Administration and Democratic controlled Congress. But rather Summers has been a bit critical of the lack of seriousness given to the current inflation situation. Unfortunately for everyone, the Administration has been long on rhetoric (trying to tell us that inflation was transitory or even good for the economy) and short on any action.
So now the Fed is going to be stepping up and providing rate increases starting in early 2022. Rate increases always slow down economies. The question is to what degree our economy can afford to be slowed.
Oh yeah! Merry Christmas everyone!
8 comments:
This is a fucking lie
Generally you raise interest rates to control an out of control growth spurt, but in this case we are looking at a fairly sluggish economy with a need to raise rates due to the unprecedented record-setting inflation.
FRANKFURT—A booming U.S. economy is rippling around the world, leaving global supply chains struggling to keep up and pushing up prices. But Biden has opened up the ports for 24 hours per day!
The force of the American expansion is also inducing overseas companies to invest in the U.S., betting that the growth is still accelerating and will outpace other major economies.
U.S. consumers, flush with trillions of dollars of fiscal stimulus, are snapping up manufactured goods and scarce materials.
U.S. economic output is set to expand by more than 7% annualized in the final three months of the year, up from about 2% in the previous quarter, according to early output estimates published by the Federal Reserve Bank of Atlanta. That compares with expected annualized growth of about 2% in the eurozone and 4% in China for the fourth quarter, according to JPMorgan Chase.
Major U.S. ports are processing almost one-fifth more container volume this year than they did in 2019, even as volumes at major European ports like Hamburg and Rotterdam are roughly flat or lag behind 2019 levels. The busiest U.S. container ports are leaping ahead of their counterparts in Asia and Europe in global rankings as volumes surge, according to shipping data provider Alphaliner.
The chief financial economist at Jefferies in New York. “The U.S. consumer has a lot more purchasing power as a result of fiscal policy than consumers elsewhere. Europe could be in a stagflationary scenario next year as a consequence.”
The U.S. accounts for almost nine-tenths of the roughly 22-percentage-point surge in demand for durable goods among major advanced economies since the end of 2019, according to data from the Bank of England.
“It’s like a queue on a highway. The increase in volume in the U.S…takes ships away from other markets,” said Mr. Jensen. “Problems in one place will trigger problems somewhere else, we live in a global world.”
The U.S. economy will likely grow by around 6% in 2021 and 4% or more in 2022, the highest rates for decades, analysts say. Strong U.S. growth momentum is expected to push the unemployment rate to the lowest level in almost seven decades by 2023.
It's the economy stupid
https://www.wsj.com/articles/booming-u-s-economy-ripples-world-wide-straining-supply-chains-and-driving-up-prices-11640082604
Booming U.S. Economy Ripples World-WideSurging American demand draws investment from overseas with supply chains working to keep pace and driving up prices
Major U.S. ports are processing almost one-fifth more container volume this year than they did in 2019, even as volumes at major European ports like Hamburg and Rotterdam are roughly flat or lag behind 2019 levels. The busiest U.S. container ports are leaping ahead of their counterparts in Asia and Europe in global rankings as volumes surge, according to shipping data provider Alphaliner.
rrb will go crazy about beaners.
Latin America Is Now a World Leader in Vaccinations because their governments can
mandate vaccinations. https://www.wsj.com/articles/latin-america-is-now-a-world-leader-in-vaccinations-11640428207
Latin America Is Now a World Leader in VaccinationsA third of world pandemic deaths were in the region, but fatalities plummeted as shots were rolled out amid very little vaccine skepticism pushed by people like you Scott
https://finance.yahoo.com/video/fed-powell-done-great-job-172744541.html?guccounter=1&guce_referrer=YW5kcm9pZC1hcHA6Ly9jb20uZ29vZ2xlLmFuZHJvaWQuZ29vZ2xlcXVpY2tzZWFyY2hib3gv&guce_referrer_sig=AQAAAH3q-NEnhb1sxv9bZBTWSxGueuBNiEE8lQsorXPTl-OLdlbLphMjpgNr-fkACtzU06r9oNSTaIYwsq9obX24WaEqsyF0XhudCO3bYN9IdvkA45U13devua4NMCpaGFDbRpfVNuEW-Uh_hYcltVadFiXpXRVCuaIfaittYvKINeyO
Happy New Year ch
“A year ago this time ... Democrats would have been giddy at the idea of funding even one of Build Back Better’s initiatives.”
In figuring out which policies to include, Democrats would have to ponder a number of variables ― like which policies provide the most help to the people most in need, which ones are most likely to be politically sustainable, which ones would be most likely to become law on their own at some later date, and which ones have viable alternatives through executive actions that Biden could take on his own.
And no matter what the decisions, they would be painful for leaders to make ― especially given all the news illustrating the need for these programs, whether it’s natural disasters drawing attention to climate change or a shortage of care workers demonstrating why that part of the labor force needs so much new support.
But the choices at this point may be inevitable in a world where the barest of Democratic majorities depends on support from a senator who has made clear he is wary of too much government spending, who worries openly about assistance recipients using money to buy drugs and who comes from a state that voted for Trump over Biden by nearly 40 points.
And while it’s important to focus on what a reconfigured bill wouldn’t accomplish, it’s also important to think about what it could. A year ago this time, when a governing majority seemed impossible, Democrats and their supporters would have been giddy at the idea of funding even one of Build Back Better’s initiatives. Now they are looking at the possibility of funding several ― an outcome that seems disappointing primarily because, during the early months of Biden’s presidency, there was so much talk of doing so much more.
Of course, even a reconfigured bill might not be able to pass, given the work it would take to craft new legislation and then secure the necessary votes. Getting the current legislation through the House required a herculean effort by House Speaker Nancy Pelosi (D-Calif.), and doing it again might be beyond even her legendary talents, especially with so many Democrats wary of getting burned by Manchin again.
But if the choice Democratic leaders face is between trying to pass a more narrowly focused bill and passing nothing at all, this shouldn’t be a hard call. They have nothing to lose by trying, and quite a lot to gain.
Post a Comment