The Bitcoin Standard Author Saifedean Ammous On Larry Summers’ Comments On Fixiing Economy
Saifedean Ammous give his thought on former US Treasury secretary Larry Summers’ “fix” on the royally screwed US economy and refers to Summers and his ilk as “deranged sociopaths”…hahaha…
Deranged Sociopaths’ and Higher Unemployment Can Fix US Economy
“The bust-up comes as U.S. consumers face significant financial pressures, with inflation currently at its highest in over 40 years. Despite this, unemployment currently sits at 3.6%. According to Summers, unemployment figures would need to rise above 5% for five years to solve inflationary woes.
Summers says to achieve higher unemployment the Federal Reserve (Fed) would need to pursue a strict course of harder and faster monetary tightening, raising interest rates significantly. Summers, who served as secretary from 1999 to 2001, likened the task to that faced by former chair Paul Volcker.
“The U.S. may need as severe monetary tightening as Paul Volcker pushed through in the late 1970s early 1980s,” he said as reported by Bloomberg. “We need five years of unemployment above 5% to contain inflation. In other words, we need two years of 7.5% unemployment or five years of 6% unemployment, or one year of 10% unemployment.”
Summers went on to question whether the incumbent chair of the Fed, Jerome H. Powell, would have the steely fortitude required to take all necessary action. “Is our central bank prepared to do what is necessary to stabilize inflation if something like what I’ve estimated is necessary?”…
…Saifedean Ammous was among those particularly displeased. Ammous took to Twitter to rail against Keynesians like Summers who he called “deranged sociopaths” who think that inflation can be tackled by “raising unemployment among poor people and ruining their lives.”
Ammous believes a better strategy for the economy would be to stop printing money.
“Keynesians think money printing doesn’t cause inflation,” said Ammous. “Their ideal economic system should oscillate between inflationary booms that enrich the rich and deflationary crashes that impoverish the poor.”