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 costs and wages.
“What occurred to us is we had huge stimulus and an economy that could only make so considerably. So we had a big level of demand, and these big levels of demand kept pushing up costs and pushing up wages,” he explained. “But in the end, it was, you place as well considerably water in the bathtub, you place as well considerably demand into the economy, and you get higher and increasing costs.”
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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 never address the sickness, you can have a larger issue down the road.”
Stewart, having said that, fired back, saying, “The stock marketplace assets have gone up 150%. CEO spend has gone up 1,500%. Workers wages have not gone up at all. I feel you happen to be misdiagnosing the sickness.”
“The most really serious issue in the U.S. economy has been the cleavages among these like you and me, who are really fortunate. That is why we require a approach and strengthening financial labor energy. Is it an problem that somebody whose handle is more than setting interest prices and printing cash can do considerably about?” Summers asked in response.
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Speaking later about financial recovery, Stewart mentioned, “This pandemic was the 1st 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 becoming employed 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 marketplace did fantastic. 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 never have college degrees, they regard the country’s most significant issue as possessing to do with inflation,” Summers retorted. “So whilst you may possibly see this as possessing been tremendously productive, our fellow Americans who never reside as comfortably as you and I do have a lot of inquiries.”
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 a lot more for gas and groceries, and that is seriously really hard. So here’s what we’re going to do: We’re going to throw ten million of them out of function so that we all never 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 feel 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 in the course of 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 really unfortunate if, out of solicitude for the banking program, the Fed had been to slow down its price of interest-price raise beyond what was acceptable provided the credit contraction,” Summers mentioned in the course of an interview with Bloomberg.
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