Harvard economist Lawrence Summers, who served in the Democratic administrations of Clinton and Obama, continues to attack his colleagues in the Biden administration.
Now hired by Bloomberg, he came out shooting this Thursday (14) not only at Jerome Powell’s central bank, but at Janet Yellen’s Treasury Department.
About Powell, his target over the last year for minimizing inflation as “transient”, Summers now questions the projection of a “soft landing”, a soft landing for the heated US economy.
“The chances of a hard landing in the next two years are certainly more than half, possibly two-thirds or more,” he said, describing a recession as “the most likely thing”:
“If you look at history, there has never been a time when, with inflation above 4% and unemployment below 5%, we didn’t have a recession in the next two years.”
Summers then turned to Yellen, who a day earlier had threatened action against China for remaining neutral toward Russia. She highlighted several global priorities, before China.
“The US has other pressing issues to address on the world stage, including a lack of US funding for post-Covid recovery efforts and Washington’s slow action to combat climate change.”
DEMOCRAT REFLECTION
Paul Krugman’s New York Times, which fought Summers’ inflation warnings for a year, is still holding out. But he invited a former adviser to Summers himself, Steven Rattner, to warn, prominently: “We could be on the path to a recession by the time the 2024 campaign begins.”
It points to “a potential electoral nightmare for Democrats to ponder.”
GLOBAL RECESSION NOW
In addition to the US, Bloomberg warns that “the risk of global recession increases until the end of the year”.
Based on a report by the Peterson Institute in Washington, it highlights that “a combination of factors – including rising oil prices, consumer retraction amid the highest prices in four decades and slowing growth in China – increases the chances of a contraction”.
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