FAST FIVE: "Dangerous Nonsense": Larry Summers Warns Democrats' Price-Gouging Bill Could Backfire

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-Bloomberg Summers got in dig at former President Donald Trump, saying “The 'price-gouging at the pump' stuff, the more general price-gouging stuff, is to economic science what President Trump's remarks about disinfectant-in-your-veins was to medical science,” referring to Trump's suggestion at the beginning of the pandemic that scientists should explore whether injected disinfectant could be used against Covid-19.

Meanwhile, Summers said it's unlikely that the Fed will be able to bring inflation down to its 2% target “anytime soon,” and that it may take multiple slowdowns to bring down CPI gains.

He also suggested that consumer-price gains this decade would likely prove larger than they were last decade, when CPI inflation averaged 1.8% through 2019.

“I'm not yet prepared to join the chorus,” Summers said regarding chatter about a Fed inflation target above 2%.

“It could conceivably be ultimately right, but I think moving in that direction immediately would very much undermine what limited anti-inflation credibility the Fed has.” If politicians do want to be helpful, “to the limited extent they can,” Summers offered the following suggestions (via Bloomberg): Reducing tariffs Letting more immigrants into the country Reducing regulatory burdens including the Jones Act — which requires oil to be transported between US ports only by US-built, -flagged and -operated vessels At a time when demand in the economy should be dampened, ask borrowers who are “in better financial condition than any time in a very long time to pay back their student debts, rather than maintaining the moratorium” “This gouging talk is a diversionary confusion,” he added.  Tyler Durden Sat, 05/14/2022 – 12:00.

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