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 Issue 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 huge stimulus and an economy that could only make so a great deal. So we had a substantial level of demand, and these substantial levels of demand kept pushing up rates and pushing up wages,” he explained. “But in the end, it was, you place also a great deal water in the bathtub, you place also a great deal demand into the economy, and you get higher and increasing rates.”
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 doctor desires their patient to endure the side effects. But if you never address the sickness, you can have a larger challenge down the road.”
Stewart, on the other hand, fired back, saying, “The stock industry assets have gone up 150%. CEO spend has gone up 1,500%. Workers wages have not gone up at all. I consider you are misdiagnosing the sickness.”
“The most really serious challenge in the U.S. economy has been the cleavages amongst these like you and me, who are extremely fortunate. That is why we will need a method and strengthening financial labor energy. Is it an concern that somebody whose manage is more than setting interest prices and printing cash can do a great deal about?” Summers asked in response.
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Speaking later about financial recovery, Stewart mentioned, “This pandemic was the very first time the government, in my opinion, did the point 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 applied 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 industry did terrific. So our fiscal policy and our monetary policy has constantly 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 greatest challenge as possessing to do with inflation,” Summers retorted. “So although you may perhaps see this as possessing been tremendously thriving, our fellow Americans who never reside as comfortably as you and I do have a lot of queries.”
Touching on the subject of corporate profit, Stewart told the former Treasury Secretary, “But what you are not addressing is not all of inflation was stimulus. The tools that we have, even though, are fundamentally saying to somebody, everyone’s paying far more for gas and groceries, and that is genuinely challenging. 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? Due to the fact that is been estimated to be 30% of inflation, 40% of inflation?”
Summers responded by saying that he did not consider that “it really 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 income for the duration 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 extremely unfortunate if, out of solicitude for the banking method, the Fed have been to slow down its price of interest-price raise beyond what was proper offered the credit contraction,” Summers mentioned for the duration of an interview with Bloomberg.
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