The situation of the US economy is underlined by the skyrocketing inflation, and it is being exacerbated by an entire generation of “wokeness”-plagued American central bankers, according to leading economist Larry Summers.
Summers, who served as President Bill Clinton’s Treasury Secretary back in 1999-2001, and as President Barack Obama’s Director of the National Economic Council, again for a two-year period, in 2009-2011, sought to raise alarm over the issues in question in media comments this week.
Wokeist central bankers with wrong priorities
His warnings came against the backdrop of Wednesday’s government figures showing the inflation has surged by 5.4% over the past year, and is up by 6.5% in 2001 so far on an annual basis.
Summers emphasized that the inflation has turned out to be even worse than he had anticipated earlier this year.
What is more, he made chilling warnings about “woke” bankers as a major issue for the US economy since those tend to focus on the wrong priorities.
According to the former Treasury Secretary, the US has a “generation of central bankers” who define “themselves by their wokeness”, i.e. by their level of social concern.
He told an online conference of the Institute of International Finance that America is in greater danger of letting inflation slip out of control than at any point so far during his decades-spanning career as an economist.
Comparing the US to other advanced Western economies he declared that Britain is in the riskiest inflation situation and that there is “some risk” in Europe as well.
Earlier this year, Summers warned that the gigantic economic stimulus of Democrat President Sleepy Joe Biden – i.e. the $1.9 billion COVID-19 relief package – was going to cause the US economy to “overheat”, and that once this happens, it will be very hard to extinguish the fire without causing further problems.
This is precisely what seems to be happening at the moment.
Bathtub is overflowing
Earlier this week, Summers issued other grave warnings about inflation in an interview for an Australian media outlet.
He recalled how back in February he warned that “the bathtub will overflow” as the inflation would spike due to a combination of a big savings overhang and the specific fiscal and monetary policies of the Biden administration.
However, he revealed that he is surprised by how fast the labor market has gotten to become so tight as it is at present – plus the fact that so many supply chain bottlenecks have emerged, all of which leads to inflation increases.
Summers actually went ahead and described the situation as a “gathering storm of inflation,” with the storm either “coming to fruition”, or we might see a scenario in which the central bank acts to check the inflation but that would have “serious financial consequences.”
He concluded that the United States at present is faced with a “pretty unstable financial environment”.