Tuesday, May 25, 2021

Once Again, Former Treasury Secretary Larry Summers Warns About Price Inflation


The Keynesian establishment economist, former Treasury Secretary Larry Summers, must be given credited for recognizing the price inflation tsunami headed our way.

His understanding as to what is developing is much more reality-based than that of current Treasury Secretay Janet Yellen and Federal Reserve Board Chairman Jay Powell.

Summers writes in a new Washington Post column:

 The consumer price index rose at a 7.5 percent annual rate in the first quarter, and inflation expectations jumped at the fastest rate since inflation indexed bonds were introduced a generation ago. Already, consumer prices have risen almost as much as the Fed predicted for the whole year...

We are seeing very substantial inflation,” Warren Buffett recently observed in remarks typical of business leaders throughout the country. “We are raising prices. People are raising prices to us, and it’s being accepted.”

Fed and Biden administration officials are entirely correct in pointing out that some of that inflation, such as last month’s run-up in used-car prices, is transitory. But not everything we are seeing is likely to be temporary. A variety of factors suggests that inflation may yet accelerate...

 How much does it matter whether inflation accelerates? In general, increases in inflation disproportionately hurt the poor and are associated with reductions in trust in government.

Summers does make some shaky Keynesian-style policy recommendations in his essay but the fact he recognizes the developing price inflation is the key thing. He is pretty much ahead of anyone in the Biden administration in understanding what is developing.

  -RW

14 comments:

  1. Sorry to hear of your passing. You’ll be missed.

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  2. RIP Mr. Wenzel:

    https://www.lewrockwell.com/lrc-blog/robert-wenzel-rip/

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  3. It's so incredibly sad to hear about Robert's passing. He was one of my very favorite thinkers and contributed greatly to my understanding of what liberty truly is. Thank you, Robert. I'd also like to thank the EPJ/Target Liberty community. That is, the people who commented on the posts. Not only were you entertaining, but also very thought-provoking. I will sorely my daily visits to the websites, Robert's commentary, and you all.

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  4. Rest in Peace, Bob. Please look after us, as we will look after you.

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  5. Very sad news:
    http://www.ronpaulinstitute.org/archives/featured-articles/2021/may/26/robert-wenzel-rip/

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  6. RIP Robert. You EPJ and TG will be missed. What a huge loss.

    I will also miss you regular commenters.

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  7. Since I have no other way to express this: rest in peace, Bob. We may not have always agreed but I always respected your arguments. Thank you for fighting the good fight.

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  8. I’m gonna miss you Wenzel. . I came to your page a few times today out of habit hoping to gain knowledge. I’ve always enjoyed your commentary and not to mention your daily alert where you always called it right. RIP. Long live Mises and his torchbearers.

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  9. RIP Robert Wenzel. You were a beacon of liberty in the darkness of tyranny.

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  10. RIP, Robert. The world is a lesser place without you.

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  11. It is fitting that one of Robert's last posts is about the inaccuracies of a Keynesian.

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  12. RIP Robert Wenzel, I will miss not having EPJ or Target Liberty to keep me informed and entertained:

    https://www.lewrockwell.com/lrc-blog/robert-wenzel-rip/

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  13. Robert Wenzel will truly be missed. I could not read enough of his writing, as he had a special way of presenting things and clearly an amazing intellect. Both of his websites and his EPJ alert were great resources. Despite the fact that we never met, it was clear from his writing that he had a good heart and vigorously worked towards improving the world. His efforts to make the world a better place through advancing liberty will be missed and his impact on my thinking will last forever. We must continue to spread his ideas and be sure his legacy lives on. Thank you Robert Wenzel! RIP and condolences to your family.

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