The problem this time is immense, and there are immense dangers. We have a rapidly growing economy, with a serious shortage of workers. To slow an economy as robust as ours, we will have to slam on the monetary brakes in a huge way. Mr. Powell, the Chair of the Federal Reserve and its Federal Open Market Committee, promised to do that in a statement yesterday. He said his goal was to get inflation down from its current roughly 8.5 percent annual rate to 2 percent, while keeping unemployment at 2 percent.
To do this, he will have to use a hydrogen bomb of monetary restraint. Slowing an economy suffering from an intentionally caused hyper-inflation rate of above 8 percent will take turning America into a severely recession-bound nation. Consumer demand for oil, food, and lodging will have to literally collapse.
Can it be done in an America clamoring for more, not less, government spending? No. To do it will require a whole different nation from what we have now.
Or Mr. Biden could show some sense and some backbone by reversing course on fracking and on the pipeline. Gasoline prices would fall drastically. All energy-related prices would fall. That would mean a generalized disinflation, as we economists call it. There would be no need to shutter our factories.
Can we please do it, Mr. Biden? Fracking never hurt anyone. Severe inflation and then stunning recession will hurt plenty.
To do this, he will have to use a hydrogen bomb of monetary restraint. Slowing an economy suffering from an intentionally caused hyper-inflation rate of above 8 percent will take turning America into a severely recession-bound nation. Consumer demand for oil, food, and lodging will have to literally collapse.
Can it be done in an America clamoring for more, not less, government spending? No. To do it will require a whole different nation from what we have now.
Or Mr. Biden could show some sense and some backbone by reversing course on fracking and on the pipeline. Gasoline prices would fall drastically. All energy-related prices would fall. That would mean a generalized disinflation, as we economists call it. There would be no need to shutter our factories.
Can we please do it, Mr. Biden? Fracking never hurt anyone. Severe inflation and then stunning recession will hurt plenty.
