SUMMERS PREDICTS A WINTRY ECONOMY – OVERNIGHT:  Larry Summers, smart economist and former president of Harvard, doesn't have a warm greeting for economic conditions.  From Fox Business: 

Former Treasury Secretary Larry Summers on Thursday warned the U.S. economy could slide into a recession as the Federal Reserve takes what he described as long-delayed action to cool the hottest inflation in nearly four decades.

Summers, during an interview on a Bloomberg Economics podcast, said the U.S. central bank has been late to spot the dangers of inflation, and that steps it takes now to mitigate soaring prices risk tipping the economy into a slump.

"If I thought we could sustainably run the economy in a red-hot way, that would be a wonderful thing, but the consequence – and this is the excruciating lesson we learned in the 1970s – of an overheating economy is not merely elevated inflation, but constantly rising inflation," Summers said. "That’s why my fear is that we are already reaching a point where it will be challenging to reduce inflation without giving rise to recession."

Summers, a Harvard University professor who served in both the Clinton and Obama administrations, has repeatedly sounded the alarm over rising inflation and has spent much of 2021 arguing that the Biden team, as well as Fed policymakers, have underestimated the risk of soaring consumer prices. 

He has warned that putting off tackling inflation will only require more severe action down the road that could undermine the economy's recovery from the pandemic.

"We’ve got a fairly serious inflationary situation," Summers said. 

Soaring inflation that has shown no signs of slowing down has forced the central bank and the White House to shift closer to Summers' stance. The government reported earlier this month that prices jumped 6.8% in November from the previous year, the fastest pace since June 1982, when inflation hit 6.1%. 

COMMENT:  Clearly, the economy is building as a key issue, maybe the key issue of the upcoming 2022 midterms.  But don't take that as gospel.  The economy is almost always at the top of the issue list, but I wouldn't be shocked if, next year, culture, and especially the culture of our schools, is at the top as well.  Remember what happened just last month in Virginia, where a parents' revolt played a key role in putting a Republican in the governor's chair.

December 23, 2021