Posted on October 14, 2021

Summers Slams Woke Fed for Risking Losing Control of Inflation

Rich Miller, Bloomberg, October 13, 2021

Former Treasury Secretary Lawrence Summers castigated monetary policy makers in the U.S. and elsewhere for paying too much attention to social issues and not enough to the biggest risk to inflation since the 1970s.

“We have a generation of central bankers who are defining themselves by their wokeness,” Summers, who is now a professor at Harvard University, said on Wednesday. “They’re defining themselves by how socially concerned they are.”

Speaking to a virtual conference organized by the Institute of International Finance, Summers compared the arguments by the Federal Reserve and other central banks downplaying the risk of inflation to those made by former Fed chairs Arthur Burns and G. William Miller, who presided over the central bank in the 1970s when the annual pace of price rises often topped 10%.

“We’re in more danger than we’ve been during my career of losing control of inflation in the U.S.,” the 66-year-old Summers, a paid contributor to Bloomberg, said. {snip}

Fed policy makers last year adopted a more inclusive approach toward their goal of achieving maximum employment, going well beyond the headline unemployment rate. {snip}