Comedian and political commentator Jon Stewart and former U.S. Treasury Secretary Larry Summers got into a heated exchange about the state of the economy during an episode of Stewart’s eponymous show, “The Dilemma With Jon Stewart.”
On Friday, Summers argued that the U.S. government’s stimulus measures have resulted in inflation, increasing rates and wages.
“What occurred to us is we had enormous stimulus and an economy that could only generate so significantly. So we had a big level of demand, and these big levels of demand kept pushing up rates and pushing up wages,” he explained. “But in the end, it was, you place as well significantly water in the bathtub, you place as well significantly demand into the economy, and you get higher and increasing rates.”
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In discussing wages and employment, Summers mentioned, “There are particular sicknesses you can have exactly where there is a drug, and it has side effects, and everyone hates the side effects, and no medical professional desires their patient to endure the side effects. But if you do not address the sickness, you can have a larger issue down the road.”
Stewart, even so, fired back, saying, “The stock market place assets have gone up 150%. CEO spend has gone up 1,500%. Workers wages have not gone up at all. I consider you happen to be misdiagnosing the sickness.”
“The most really serious issue in the U.S. economy has been the cleavages amongst these like you and me, who are extremely fortunate. That is why we want a method and strengthening financial labor energy. Is it an situation that somebody whose handle is more than setting interest prices and printing funds can do significantly about?” Summers asked in response.
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Speaking later about financial recovery, Stewart mentioned, “This pandemic was the initial time the government, in my opinion, did the issue that they are supposed to do in a crisis. When you appear at the stimulus payments that went out, you know, 70% of it was getting utilised for rent and meals.”
“And if you appear at the recovery in the pandemic versus the recovery from 2008, when you stimulated the economy at the demand level, jobs had plunged in the pandemic and then they shot back up. The recovery in 2009 was painstaking, but the stock market place did excellent. So our fiscal policy and our monetary policy has generally been on the side of corporate easing,” he added.
“If you speak to African American voters, if you speak to Hispanic voters, speak to voters who do not have college degrees, they regard the country’s most significant issue as getting to do with inflation,” Summers retorted. “So though you might see this as getting been tremendously thriving, our fellow Americans who do not reside as comfortably as you and I do have a lot of concerns.”
Touching on the subject of corporate profit, Stewart told the former Treasury Secretary, “But what you happen to be not addressing is not all of inflation was stimulus. The tools that we have, although, are fundamentally saying to somebody, everyone’s paying far more for gas and groceries, and that is definitely difficult. So here’s what we’re going to do: We’re going to throw ten million of them out of operate so that we all do not have to share that burden. Why are not we attacking corporate profit in any way? Mainly because that is been estimated to be 30% of inflation, 40% of inflation?”
Summers responded by saying that he did not consider that “it is a tenable view that all of a sudden corporations became greedy.”
At that point, Stewart cut Summers off, pointing out that there had been recordings and reports where corporate executives had spoken highly of their increased earnings through earnings calls.
The former Treasury Secretary had earlier mentioned that the Federal Reserve should not be spooked by the current banking crisis into easing its campaign to include inflation.
“It would be extremely unfortunate if, out of solicitude for the banking method, the Fed had been to slow down its price of interest-price boost beyond what was acceptable provided the credit contraction,” Summers mentioned through an interview with Bloomberg.
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