Former Treasury secretary and Obama adviser says Republicans downplaying Jan. 6 riot are contributing to soaring prices
Economist Larry Summers, adviser to two Democratic presidents and Treasury Secretary under Bill Clinton, has found a new culprit behind America’s inflation crisis: Republicans downplaying the January 2021 US Capitol riot.
“I think the banana Republicans who say that what happened on January 6 was nothing or OK are undermining the fundamental credibility of our country’s institutions,” Summers said Sunday in an interview with CNN. “And that, in turn, affects inflation. Because if you can’t trust the government of the country, why should you trust their money? »
Democrats called the riot racially motivated “insurrection” and accused former President Donald Trump of allegedly inciting voter fraud protesters to try to block the peaceful transfer of power. The Democratic-controlled Congress began broadcasting hearings into the riot last Thursday, set up for a prime-time television hearing with the help of former ABC News executive James Goldston.
Summers, who was director of the National Economic Council under President Barack Obama, called for greater civility in Washington to help restore public trust in government. “I think it’s extremely important that we bring the temperature down in Washington, that we recognize behavior that is simply beyond the bounds of reasonableness and decency,” he said.
However, in 2017 Summers himself fueled distrust of the US government when he speculated that Russia had “hacked” the 2016 presidential election and may have colluded with the campaign. Trump. His resume also includes stints as chief economist at the World Bank and president of Harvard University.
The inflation rate in the United States hit a new 40-year high of 8.6% in May, which President Joe Biden has blamed on his Russian counterpart, Vladimir Putin. “We’ve never seen anything like Putin’s tax on food and gasoline,” he said after the inflation report was released on Friday. He then suggested that the energy companies were responsible for making “more money than God” while Americans suffer at the pumps.
Summers correctly predicted high inflation last year. He said he disagreed with Treasury Secretary Janet Yellen’s statement last week that there was no indication a recession was underway.
“When inflation is as high as it is now and unemployment is as low as it is now, it is almost always followed within two years by a recession,” he said. added. Summers said. He added, “I think the optimists were wrong a year ago saying we wouldn’t have inflation, and I think they’re wrong now if anyone is very confident that we’re going to avoid recession.”
Summers called for reducing the US budget deficit and lowering prescription drug prices to help dampen inflation. He also called for the elimination of many tariffs on imports from China.
Meanwhile, some economists argued that the United States was already in a recession.
“We are in a technical recession, but we do not realize it”, On Friday, Bank of America chief investment strategist Michael Hartnett wrote in a note to clients. He added that the “inflationary shock” will continue and that the economic shocks linked to the rise in interest rates have only just begun.
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