On Monday, Larry Summers, a former economic adviser to President Barack Obama, responded to comments from Biden’s Treasury Secretary Janet Yellen in which she dismissed Summers’ concerns about the inflation crisis. CNN’s Jake Tapper asked Yellen about Summers saying “We’re in moreMore
On Monday, Larry Summers, a former economic adviser to President Barack Obama, responded to comments from Biden’s Treasury Secretary Janet Yellen in which she dismissed Summers’ concerns about the inflation crisis.
CNN’s Jake Tapper asked Yellen about Summers saying “We’re in more danger than we have been during my career of losing control of inflation in the U.S.”
Yellen responded, “I think he’s wrong, I don’t think we’re about to lose control of inflation.”
“I agree, of course, we are going through a period of inflation that’s higher than Americans have seen in a long time,” she added. “And it’s something that’s obviously a concern and worrying them. But we haven’t lost control.”
Summers responded to Yellen in a Twitter thread, writing, “Yesterday on @CNN w @jaketapper, @SecYellen said I was wrong about my assertion that we are more at risks of losing control of inflation than at any time in my career. She expresses confidence that inflation is decelerating and will be back to target levels by the end of next year. I hope she is right but I think it’s much less than a 50/50 chance.”
“I began my career when Paul Volker was taking over at the Fed and not since then have I been more worried. I am curious at what point in the last 40 years Treasury thinks the risk of an inflation spiral are greater than they are now,” Summers continued. “When the Administration formulated its budget in February, it expected 2 percent inflation in 2021, I was warning about inflation. Their forecast is no longer operative. In May and June, @SecYellen expressed confidence that inflation would be back to the 2 percent range by late 2021 or early 2022. Now, this forecast is no longer operative.”
“In @CNN interview, @SecYellen asserts twice that inflation has decelerated. This is a bit misleading as the 3-month and 12-month CPI inflation rates are both around 5 percent on an annual basis,” Summers continued. “And the trimmed mean and median inflation rates that exclude aberrant sectors (which used to be a stable of Administration’s rhetoric) are now accelerating. The TIPS market is suggesting inflation in 3 percent range over 5 years and more next year. Breakeven inflation over 5 years is up 40 bps in the last month. Expectations data are even more disturbing. This is part of why my alarm is increasing and Treasury should be as well.”
“Given lags in the indices, housing inflation is almost certain to soar in coming months. With super-tight labor markets, rising strike activity and real wages having declined, increases in wage inflation are likely as well,” Summers added. “I actually believe the gap between Treasury & Fed statements and the everyday experience of businesses and consumers in terms of inflation has widened in recent months. Until the Fed & Treasury fully recognize the inflation reality, they are unlikely to deal with it successfully.”
Businesses are reportedly “pleading” with the Biden administration to delay its plan for COVID-19 vaccine mandates for employees of large businesses, saying the mandates could cause a “mass exodus” of employees.
“Worried that President Joe Biden’s Covid vaccine mandate for private companies could cause a mass exodus of employees, business groups are pleading with the White House to delay the rule until after the holiday season,” CNBC reported. “White House officials at the Office of Management and Budget held dozens of meetings with labor unions, industry lobbyists and private individuals last week as the administration conducts its final review of the mandate, which will require businesses with 100 or more employees to ensure they are vaccinated against Covid or tested weekly for the virus. It is estimated to cover roughly two-thirds of the private-sector workforce.”
“The American Trucking Associations, which will meet with OMB on Tuesday, warned the administration last week that many drivers will likely quit rather than get vaccinated, further disrupting the national supply chain at time when the industry is already short 80,000 drivers,” CNBC added. “The trucking association estimates trucking companies covered by the mandate could lose 37% of drivers through retirements, resignations and workers switching to smaller companies not covered by the requirements.”
“Now placing vaccination mandates on employers, which in turn force employees to be vaccinated, will create a workforce crisis for our industry and the communities, families and businesses we serve,” Chris Spear, the American Trucking Association’s president and CEO, wrote in a letter to OMB last Thursday.
Retailers are worried that the mandate would cause a spike in resignations while businesses are already short on employees.
Retailers are also particularly concerned the mandate could trigger a spike in resignations that would exacerbate staffing problems at businesses already short on people, said
“It has been a hectic holiday season already, as you know, with supply chain struggles,” Evan Armstrong, a lobbyist at the Retail Industry Leaders Association, told CNBC. “This is a difficult policy to implement. It would be even more difficult during the holiday season.”
According to a KFF poll last month, thirty percent of workers said they would quit their jobs rather than comply with a vaccine or testing mandate, CNBC noted.
The news comes after President Biden told those concerned about “mass firings” resulting from vaccine mandates that the “bigger story” is that the vaccine mandates are working.
“These requirements work,” Biden said. “And as a business round table and others told me when I announced the first requirement that encouraged businesses to feel they could come in and demand the same thing of their employees, more people are getting vaccinated. More lives are being saved. Let’s be clear: When you see headlines and reports of mass firings, and hundreds of people losing their jobs, look at the bigger story. I’ve spoken with Scott Kirby, CEO of United Airlines, who’s here today. United went from 59% of their employees to 99% of their employees in less than two months after implementing the requirement. 99%.”
Over the weekend, Treasury Secretary Janet Yellen admitted during a CNN interview with Jake Tapper that President Biden’s inflation crisis is expected to continue for the rest of the year.
“So let me ask you about that, because this rising inflation is hitting Americans’ wallets hard, impacting everything from gas prices to groceries,” Tapper said on CNN’s “State of the Union.”
“When do you expect the inflation to get back to the 2 percent range, which is considered normal?” Tapper asked. “2022? 2023? When?”
“Well, I expect that to happen next year. Monthly rates of inflation have already fallen substantially from the very high rates that we saw in the spring and early summer,” Yellen responded, suggesting that the maintenance of a record high inflation level is a good thing.
“On a 12-month basis, the inflation rate will remain high into next year because of what’s already happened. But I expect improvement by the end of — by the middle to end of next year, second half of next year,” Yellen added.
Yellen later went on to admit that the Biden era has seen “a period of inflation that’s higher than Americans have seen in a long time.”
Biden Treasury Secretary Janet Yellen says rising prices will continue until “the end of next year.”
In July, Yellen said it would only last “several months.” pic.twitter.com/W4GjxUCdmM
— RNC Research (@RNCResearch) October 24, 2021
On Thursday, White House Deputy Press Secretary Karine Jean-Pierre tried to suggest that the ongoing supply chain crisis has been a result of President Biden’s “historic economic recovery,” a claim that did not align with the reality of the economy’s consistent underperformance under Biden.
“You know, there’s a lot to talk about Christmas presents not arriving on time. But the issue is more severe and critical than that. I mean, it’s affecting small businesses. Autobody shops can’t get parts to fix cars, so they can’t make money,” a reporter said. “Ninety percent of school nutrition programs say they’re worried about continued supply chain issues, according to a School Nutrition Association survey. Some schools are making last-minute grocery store trips just to feed their students.”
“So, if this is an issue that the White House has been working on and aware of since February, why does it seem like this is a problem that is getting worse, not better?” the reporter asked.
“I would say this: When it comes to the supply chain, you know, it’s a — there are complexities there when you think about, you know, the — when we learn about the global supply chain as well — right? Those are — so that’s one thing that you kind of have to put it in the — in the bigger picture,” Jean-Pierre claimed. “There are port directors, terminal operators, ocean carriers, railroad, truckers, warehouse — warehouses, and retailers, and let’s not forget consumers who have a record level of demand as we have made a historic economic recovery.”
“Because we have — we have — the forecasters — the economic forecasters did not see — did not think we would be where we are today; we have surpassed that,” she claimed. “So, we have had some historic economic recovery.”
The Biden economy’s “historic recovery” has only been historic in its stunted recovery as it has consistently performed worse than the predictions of economists – with the unemployment rate even rising from March 2021 to April 2021, when the economy added back 650,000 less jobs than expected.
The Biden economy has continued to worsen since, with September being the worst month for the economy this year.
The Wall Street Journal explained, “The economy created 194,000 jobs in September, the smallest gain since December 2020 and down from 366,000 jobs added in August. Many workers gave up a job search and exited the labor force last month. The smaller pool of labor meant that despite the slowdown in hiring, the unemployment rate fell to 4.8% last month from 5.2% in August.”
While many are out of work, a historic supply chain crisis developed and inflation has continued to be at record high levels – meaning higher prices for already struggling Americans.
“U.S. inflation accelerated [in September] and remained at its highest rate in over a decade, with price increases from pandemic-related labor and materials shortages rippling through the economy,” the Wall Street Journal reported.
On Tuesday, Florida Governor Ron DeSantis (R) announced that he was working to solve President Biden’s supply chain crisis by creating incentive packages to push companies to abandon overwhelmed ports in Democrat states and use Florida’s ports instead.
DeSantis made the announcement during a press conference at the Jacksonville Port Authority (JAXPORT).
“At the event, JAXPORT announced that they will be offering incentives to any company that chooses to bring its business to the port, freeing up backlogs at other ports while ensuring Americans are able to receive the goods they order faster,” the governor’s office said in a press release. “Governor DeSantis was able to make the announcement that Florida Seaports are able to meet demand because Florida has continuously invested in its seaports.”
“Year after year we continue to invest in our seaports, in infrastructure and in workforce education to make sure our supply chain is resilient,” DeSantis said at the event. “I’m especially proud of Florida’s seaports. They are crown jewels in our state. While other U.S. ports are just now announcing around-the-clock operations, in Florida many of our ports are used to serving Florida farmers, families and businesses with 24 hour operations. As the rest of the nation faces rampant inflation and businesses stare down unprecedented supply chain problems, our message is this: Florida is here, we have capacity, we have incentive packages to help businesses who want to move here and we are going to make sure Americans get their Christmas Gifts this season.”
According to the press release, Florida has invested almost $1 billion into its ports since 2019 “to ensure there is capacity to serve as much cargo as possible.” The Florida Department of Transportation is set to invest an additional $200 million into infrastructure improvements over the coming years to “ensure there are no significant logjams or freight movement delays.”
“The Governor has displayed tremendous leadership in continuing to recognize the value our seaports provide in meeting the mission of safely moving goods throughout the region,” said Florida Department of Transportation Secretary Kevin J. Thibault, P.E. “The partnership we have with our deepwater seaports uniquely positions Florida to be that much needed destination to get goods to market and overcome the delays seen at other locations.”