8/13/2023 0 Comments Meld price prediction![]() What he actually forecast was often not what in fact occurred.Īs John Cassidy recently observed in The New Yorker, Summers in March 2021 forecast three possible scenarios-a one-third chance of stagflation a one-third chance that “the Fed hits the brakes hard” and we get recession and a one-third chance of growth that “will moderate in a non-inflationary way.” (Note the spurious mathematical precision-one-third, based on what?)Ĭassidy quotes financial analyst and longtime Fed watcher Tim Duy that Summers “also put out plenty of other scenarios-enough that he almost couldn’t be wrong.” Exactly so. Moreover, Summers tends to backdate his predictions to make himself look prescient. Search “Summers” and “monopoly pricing” and you get superficial tweets denying the problem, based on no data. He doesn’t deign to look at structural particulars, except at a level that is breathtaking in its shallowness. Summers-relentlessly-is a macroeconomist and when the only tool you have is a hammer, everything looks like a nail. It’s understandable that Summers doesn’t focus on these-they are consequences of the policies of deregulation and hyper-globalism that Summers (and Bob Rubin) persuaded Bill Clinton to impose on the country. Most of the outlay was not intended as random macro-stimulus it was targeted relief.Ĭontrary to Summers, recent price hikes have been substantially the result of two factors that Summers largely omits from his analysis- supply chain shocks and monopolistic corporations with market power taking advantage of an inflationary climate to impose opportunistic price hikes. ![]() But Summers drastically overstates the degree to which the inflation is the result of excessive macroeconomic stimulus, as well as exaggerating his own prescience.įor starters, when President Biden sponsored the American Rescue Plan Act in March 2021, the economy was still in a deep COVID recession, and people were suffering. Inflation did accelerate faster than most other economists forecast, and the Fed will raise interest rates more than Fed Chair Jay Powell predicted last fall. Let’s first give Larry partial credit on the big picture. He epitomizes the old line “often wrong, never in doubt.” His arm must be sore from patting himself on the back. It’s hard to imagine any other prominent policy adult with this level of narcissism.
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