Saturday, May 15, 2021

Larry Summers: The Price Inflation is Even Worse Than I Warned About

Larry Summers

 As detailed here at EPJ in the past, former Treasury Secretary Larry Summers has been wisely warning about accelerating price inflation.

U.S. consumer prices rose in April by the most since 2009.

Now that the April inflation numbers are in he is doubling down on his warning.

“I was on the worried side about inflation and it’s all moved much faster, much sooner than I had predicted,” Summers said in an interview with David Westin on Bloomberg Television’s “Wall Street Week.” “That has to make us nervous going forward.”

Summers said the 0.9% jump in the core measure in April left room for temporary price increases and “for us still to have an extremely serious problem of inflation rising to the 4% range. I don’t think you can dismiss these figures.”

“The Fed seems to be planning for a very benign scenario that we certainly can’t count on,” he said.

Summers is one of the few establishment Keynesian economists who gets what is developing.

“The better part of wisdom is that there are slippery slopes, and once you start a process of accelerating inflation there are precious few examples of where inflation has been brought back down without very substantial economic disruption and without enormous disruption to financial markets,” he said.

Oh yeah, he gets it but Federal Reserve Board members appear clueless as to what is developing.