Larry Summers Forecasts a Recession

The Biden administration is on message. Having no real use for reality, and certainly not for the reality of the everyday lives of the average American, Biden and Co. have decided that all we need is to keep hearing, over and over again, that everything is for the best in the best of all possible worlds.

Take the dulcet tones of Commerce Secretary Gina Raimondo, another highly qualified diversity hire:

Under this president's leadership, he has overseen the greatest resurgence in an economy in his first year in office, greater than any other president that we know of.

At a time when inflation is running rampant and where cargo ships are delayed for over a month outside of Long Beach, the commerce secretary tells us that we have never had it so good.

At a time like this, we turn to someone who not only knows what he is talking about, but who is surely not a member of the vast right wing conspiracy. That is, we turn to Lawrence Summers.

Earlier in the year, when the Biden administration was downplaying the chance that its policies would produce runaway inflation, Summers sounded the alarm that inflation was in our future.

He gains credit for displaying integrity. So, we pay special heed to his prediction, now, that the Federal Reserve’s feckless attitude toward inflation was about to produce a recession. As it happens, the chairman of the Fed, one Jerome Powell, has just been renominated by President Biden-- for a job not-so-well done.

Sobering thoughts for the holiday season. The Street has the story:

Former U.S. Treasury Secretary Lawrence Summers paints a grim picture of the future of the U.S. economy, according to a Bloomberg report.

Noted economist Summers has cautioned that the Federal Reserve's delayed response to tackle record high inflation could tip the world's largest economy towards a recession.

“We’ve got a fairly serious inflationary situation,” Summers told Bloomberg during a podcast titled "Stephanomics."

The fed said it may also set the stage for three potential rate hikes in the coming year.

But Summers says it might be too late already.

“My fear is that we are already reaching a point where it will be challenging to reduce inflation without giving rise to recession," Summers told Bloomberg.

Apparently, runaway inflation is like a runaway truck. It’s not just a messaging problem. It’s a policy problem, and as of now, it may well be too late to bring it under control without causing considerable economic damage.

"If I thought we could sustainably run the economy in a red-hot way, that would be a wonderful thing, but the consequence, and this is the excruciating lesson we learned in the 1970s, of an overheating economy is not merely elevated inflation, but constantly rising inflation,” Summers told Bloomberg.

If you had bought the Biden optimism, you should take a deep breath and batten down the hatches. The dawning of 2022 does not give Larry Summers cause for optimism.