The mainstream belief among modern capitalists is that too many people working means a tighter employment market, making it harder for employers to fire and replace workers, meaning labor has more bargaining power, which in turn means rising wages. These rising wages mean rising demand, and therefore rising inflation. The fact that Americans’ wages have not kept pace with the inflation rate should be a red flag to these economists—but why think too hard? It is a profoundly myopic, self-serving, and ultimately inhumane view of an economy that disregards facts in service of being able to grow profits on the backs of the majority of humans living on the planet. This view is very quickly parroted throughout the traditional media landscape where most “experts” brought on represent the wealthiest one percent of our country, and they would like to continue making larger profits.
Larry Summers is an economist who has advised every Democratic leader since Michael Dukakis ran for president in 1988. Summers worked for the World Bank as its chief economist in the 1990s. You might remember one of the highlights of his tenure there was when a memo was leaked concerning Summers’ views on Africa, where he wrote, "A given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that." Summers' defense was that the whole memo was supposed to be sarcasm—the whole memo. I guess the chief economist for the World Bank mostly writes satire. [I’m being sarcastic.]
Summers has been running around for the past year saying that the federal reserve and President Joe Biden must continue to raise interest rates in order to loosen up the labor market. What that means is that there are too many people working and pulling in living wages, according to Summers, and we must therefore create an economic environment that promotes laying off millions of workers. He and others have disregarded the fact that as much, if not more, of the world’s inflation issues has been generated by corporate greed.
Summers joined Jon Stewart on his new interview show, The Problem with Jon Stewart. As always, Stewart was able to synthesize the fundamental flaws in Mr. Summers, and most of the Federal Reserve leadership, logic.
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The Problem with Jon Stewart only put up about 5 minutes of the interview, but it was more than enough to see the flawed (at best) logic of Summers and the class he represents. After a longwinded analogy to explain how the stimulus package caused inflation, Summers landed on a new analogy where he’s the economy doctor:
“There's certain sicknesses you can have where there's a drug and it has side effects and everybody hates the side effects, and no doctor wants their patient to suffer the side effects. But if you don't address the sickness, you can have a bigger problem down the road.”
Having explained how medicine works, Jon Stewart reminds Summers of the facts:
“But the stock market assets have gone up 150%. CEO pay has gone up 1500 percent. Workers wages haven't gone up at all. I think you're misdiagnosing the sickness.”
He is. Or, he’s purposefully being oblique about it all. I’m going to say it’s the latter.
Side note about Larry Summers: He urged California’s Gray Davis to relax environmental protections in order to help promote...Enron. Any the who!
Stewart continues to point out the facts: How, even though it wasn’t as much as most progressives wanted, or as frequent or as long as most progressives wanted, the stimulus package was arguably the only successful policy implemented for our forever-in-crisis economy over the last two decades. “This pandemic was the first time the government, in my opinion, did the thing that they're supposed to do in a crisis. When you look at the stimulus payments that went out, you know, 70% of it was being used for rent and food.”
Furthermore, Stewart reminds Summers that our continued lack of success in having an economy that serves the majority of Americans and not simply people Larry Summers has in his contact list is because elected officials have deferred to people like Larry Summers who cannot see how terribly self-involved his concept of economics is. “And if you look at the recovery in the pandemic versus the recovery from 2008, when you stimulated the economy at the demand level, jobs had plunged in the pandemic and then they shot back up. The recovery in 2009 was painstaking, but the stock market did great. So our fiscal policy and our monetary policy has always been on the side of corporate easing.”
The final tack Summers takes is the same one he’s leaned on in recent years, as decades of failed centrist economic policies have led to the Democratic Party losing millions of once solid working-class jobs: Not firing millions of Black and brown people is bad progressive policy. Wait, what? He didn’t say that, did he? Let me illustrate it.
Summers is critiquing the stimulus package as a progressive policy (one that he was against), saying, “If you talk to African-American voters, if you talk to Hispanic voters, talk to voters who don't have college degrees, they regard the country's biggest problem as having to do with inflation. So while you may see this (stimulus package) as having been tremendously successful, our fellow Americans who don't live as comfortably as you and I do have a lot of questions, John.”
The very easy-to-understand problem here is that Summers is openly promoting the loss of 2 to 10 million jobs in order to loosen up the labor market for the richest employers. There is no shortage of data and studies that show that Black and brown people are the last to be hired, the first to fired, and the people Summers is suggesting take a hit for the corporations are going to be predominantly Black and brown. You know what a bad policy for progressives is? Firing the people who are being hurt the most by corporate greed.
Jon Stewart, instead of calling Mr. Summers a quack, tries once again to get Summers to interact with the facts, “But what you're not addressing is not all of inflation was stimulus. The tools that we have, though, are basically saying to somebody, everyone's paying more for gas and groceries and that's really hard. So here's what we're going to do. We're going to throw 10 million of them out of work. So that we all don't have to share that burden. Why aren't we attacking corporate profit in any way? Because that's been estimated to be 30% of inflation, 40% of inflation?”
It is here that Summers sort of shows his ass—for the umpteenth time in his career. He tries to generate a new false myth about corporate greed, jumping off of Stewart’s last words to say, “I don't think it's a tenable view that all of a sudden corporations became greedy.” He proceeds to begin some hot garbage rhetorical concession about how there are monopolies that we should give lip service to regulating, but the cat is out of the bag, as they say. No one is saying “that all of a sudden corporations became greedy.”
What we are all saying is that corporations have always been greedy. Always. What this new “inflation” cycle has shown us is that those corporations, because of their eternal greed, have taken this opportunity to gouge people, and now you Larry Summers, are doing the dirty work of telling everybody to look elsewhere for solutions. Stewart cuts Summers off to remind him that there are recordings and reports on all of the earnings calls these corporations, where they’re giddy to talk about their huge increased profits.
Judd Legum is the founder and author of Popular Information, an independent newsletter dedicated to accountability journalism. Judd joins Markos and Kerry to talk about the Dominion Voting Systems defamation lawsuit against Fox News and the recent revelations of behind-the-scenes deceit practiced by everyone from on-air host Tucker Carlson, to the owner of it all, Rupert Murdoch.
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