The Problem with Jon Stewart (2021) s02e09 Episode Script

[Stewart] Coming up on The Problem,
we are gonna be discussing
[imitates trumpet sound]
inflation!
Is a permanent underclass a necessity
for American capitalism?
Where the stork drops you
in the United States matters.
By the way,
that's not actually how babies--
Oh, forget it. We're not--
-[audience laughs]
Why can't the Fed intervene
on behalf of the worker
to cool the profit market?
I guess that means just giving people
lots of money.
Handing people money--
-Don't slippery slope my--
I want to understand--
-They've done it for corporations.
It's gonna be a burner, baby!
[audience cheering, applauding]
Hey!
Welcome. Hello, hello.
Uh, my name is Jon Stewart.
Happy St. Patrick's Day.
[audience cheers]
Because that's what day it is.
-[audience laughs]
It is March 17th.
[audience laughs]
Personally, I don't like holidays
that focus on race and divide us.
But let the Irish have their day.
[audience laughs]
You couldn't have picked
a better night to be joining us
because tonight we are gonna
be discussing [imitates trumpet sound]
inflation! [chuckles]
[audience murmurs, cheers]
And Romanian sex trafficking.
[audience cheers, applauds]
[groans] Inflation.
Rising prices and its effect
on the overall economy, huh?
You might wanna wake the kids.
It's gonna be a burner, baby.
Prices are up about 6% from last year.
And as usual,
one group is bearing the brunt.
Working families [chuckles]
clobbered by inflation.
Millions of people can't afford groceries,
toiletries, other goods
necessary to provide for their families.
They're not even going
for medical treatments that they need
because they need the money
to pay the gas bill.
It falls most heavily on working folks,
middle-income, blue-collar,
hard hats, lower-middle-income.
Grease goblins. [groans]
-[audience laughing]
Mid-lower income, unwashed masses,
lower-lower-middle-income, the Irish.
That's who it falls on [mumbles]
-[audience laughs]
It sucks that inflation makes it harder
for the working class
because pre-inflation,
66% of Americans were already
just living paycheck to paycheck.
With no cushion for a health crisis,
or a job loss,
or a charcuterie board
for your MILF Manor watch parties.
[audience laughing]
But fear not, working class,
America's most treasured
and politically convenient demographic.
Chairman of the Federal Reserve
Jerome Powell has heard the call.
It's clearly time to raise interest rates.
Yes!
-[audience laughs]
Inflation is bringing pain
to ordinary households.
So this is an action we must take.
Higher interest rates
will bring down inflation.
They will also bring
some pain to households.
[audience laughs]
Hey, you know what might help
your kick in the nuts?
A nut kick.
Housing prices go higher.
Credit card debt go higher.
We need wages
to come down pretty significantly.
We need fewer jobs.
We need a higher unemployment rate.
We actually want to see and hear
about more layoffs
and lower wages, more firings.
There's gonna need to be increases
in unemployment to contain inflation.
I gotta say, it takes major balls
to promote unemployment while in
Bermuda, Bahama ♪
Poughkeepsie, Sc ♪
So to help people
living paycheck to paycheck,
the plan is to reduce or take away
said paycheck.
Which sounds bad
but only because you're dumb.
You would think, as an individual worker,
I wanna be paid more,
but from a macroeconomic sense
That a good point, yeah.
-a lot of these trends are tough.
It will hold the whole economy back.
Yeah!
What are you thinking, you greedy,
1997-Honda-Civic-driving,
T.J.-Maxx-wearing motherfuckers?
[audience laughs]
Remember when the world shut down
and they sent you a check
so as not to have you die?
This is your fault.
-[audience laughs]
The root cause of spiking inflation
is the COVID-19 relief package.
We're all paying the price
for having overstimulated this economy
during the pandemic
and putting too much money
into people's pockets.
They're in some of the best
financial shape they've ever been,
and the result is that demand
is outstripping supply a little bit.
We have to act!
Americans are starting to have enough.
[audience laughing]
But not to worry, if inflicting pain
on already suffering workers
is a little microeconomic for you,
there's a macroeconomic way to explain it.
He's going to ask everyone
to just take a little bit of medicine now
[anchor] Yeah.
-for the good of the country.
It tastes terrible and hurts too.
Very, very bitter indeed.
Is it necessary? Yes.
We have to accept our medicine.
Say, "Listen, we're not gonna dribble out
the medicine. Let's take it now!"
Yes!
And we're gonna deliver the medicine
directly into your dick hole.
[audience laughs]
Which is, as you know, the only avenue
to deliver medicine
that eases pain and suffering.
Open up your dick hole and say, "Ah!"
[audience laughs]
That-- I don't actually even think
that would work, would it?
Mine just wheezes now.
-[audience laughing]
[laughing]
What's the opposite of a mushroom cloud?
So, the working class
needs to take its medicine
for the overall good of the country.
It's gonna be painful, but it's necessary.
Hey. What about since CEO pay
has far outpaced worker wage increases,
should we come up
with a medicine that deals with that?
Some of these people are worth
a lot more than they make.
They're the ones, Judge, to your point,
that are producing the wealth.
These are small countries
these people are managing.
Oh, my God. We should be
praising these people to heaven.
The way I see it,
you need to look at CEOs
like they're great athletes.
[audience laughing]
Yeah, I don't think I see it.
[audience laughs]
And thus
"The Problem with Inflation."
Our leading economic minds have one,
and only one fix,
for easing the pain of inflation
for the working people.
And that fix is
the Fed raises interest rates
to crush demand and lower wages.
Because wages rising
must be the principal cause of inflation.
Is there anything else, though,
that the chairman of the Fed
wanted to add to that?
I don't think wages
are the principal story
of why prices are going up.
I don't think that.
Then what the fu--
-[audience laughs]
So it turns out, the only tool we have
to bring down inflation
doesn't actually address
the principal reasons inflation went up?
Just the part that helped you.
The factors impacting inflation globally
are complicated.
Inflation,
we have to remember, was caused by COVID.
We've got supply chain issues.
It's got everything to do with
Russia invading Ukraine
labor shortage
-drought in California
tax hikes
-avian flu
corporate greed.
Corporate avian greed.
-[audience laughs]
Yes, it turns out one of the things
rising much faster than wages is profit.
US corporate profit margins
are the biggest they've been
since the 1950s.
Oil companies,
the highest profits in 115 years.
Meat packing profits, 300% up.
Egg profits, 65% up in one year.
I mean, for God's sake, if it helps,
I'll just start laying eggs.
Can't be that hard.
[audience laughing]
[clicks tongue] I stand corrected.
That is not an egg.
[audience laughing]
Well, it turns out, demand factors, like
the COVID stimulus and higher savings,
only account for about 30% of inflation,
while rising corporate profit margins
are to blame for 40%.
Look, the pandemic was a crisis.
So, our government
created stimulus packages
to do what a government is supposed to do.
Keep people fed and housed
and stave off a depression.
And, by the way, it worked.
How is that bad?
This is called
the Great American Comeback,
the economy roaring back
in the first quarter.
It's almost back to where it was
before the pandemic.
That unemployment rate, 3.4%.
Fifty-three-year low!
Unemployment's low, the job market's hot
and that's gonna be bad
for working people.
We live in the Upside Down.
[audience laughs]
Were any of you alive
in the last crisis in 2008?
The banks got $1.5 trillion
Right.
-in secret loans.
[anchor] The government handed over
$3.3 trillion to the banks.
[anchor 2] The government has already
spent $4.7 trillion
to survive the financial crisis.
[reporter] The Fed loaned or guaranteed
the banks some $7.7 trillion.
The banks got so much fucking money,
they were laughing all the way
to themselves.
[audience laughs]
We gave trillions of dollars of stimulus
to banks and Wall Street,
and Wall Street recovered quickly.
But no one else did in 2008,
and unemployment stayed high
for nearly a decade, peaking at 10%.
But since macroeconomists
only learn visually,
perhaps this will help.
This is the graph of the recovery
from the pandemic.
Look at the V.
We plunged, we got stimulus,
and then the graph shot back up
and the economy recovered.
Here's the graph from 2008.
It sucked when the banks were giving
big fat stimulus checks, and yet,
only one is being called "America's
worst economic policy in 40 years."
For the last half-century,
our economic policy
has just been a flow chart
where, no matter what the input is,
the answer is
the worker must pay the price.
Mortgage derivatives tanked our economy?
Fuck you. Pay me.
[audience laughs]
COVID pandemic?
Fuck you. Pay me.
[audience laughs]
Continuing a long tradition in America
of politically fetishizing
the working class
Fuck you. Pay me.
Take a look at this.
-[audience applauding]
Prices continue to go up and up and up.
Higher oil prices
higher egg prices
higher real estate prices.
It cost me about $28
at Taco Bell for lunch
and it's just out of control
and it's hurting
good, hardworking Americans.
The only way, the only way
to help them is to
raise interest rates
-raise unemployment
lower wages and lower retirement savings.
That's the ticket!
But we can't touch
Wall Street
-corporate profits or
CEO pay.
It's just too important.
Punishing
-good, hardworking Americans
is the only way.
You may be
-an essential worker
but in the grand scheme of things
you don't matter,
your family doesn't matter,
your children don't matter.
But the big banks
and the fat cats on Wall Street
they are the only ones who matter,
not you.
Thank you
-good, hardworking Americans
for your sacrifice
-for the greater good.
It's just economics.
-Do-- Do-- Do you understand that?
[audience cheering, applauding]
-Of course we understand it.
All right, look.
Inflation is obviously a painful
and serious problem for the working class.
But it's frustrating that the first
[chuckling] and maybe only solution
seems to be hurting those
who are already hurting the most.
To help understand why,
we've got Lindsay Owens,
an economist and executive director
of Groundwork Collaborative,
a group that advocates
for progressive economic reform.
John Rizzo, former Senior Spokesperson
for the Department of Treasury
and currently a senior vice president
at the Clyde Group.
And Kenneth Rogoff,
a Professor of Economics at Harvard
and former chief economist
at the International Monetary Fund.
Thank you all for joining us.
[audience applauding]
It's exciting!
We-- We had a pandemic.
It's an unprecedented crisis.
The government stepped in
and provided relief for regular people,
and the country didn't collapse.
Which was the point.
How do we now fix
that terrible mistake we made?
I think we can take a beat
and celebrate the fact
that we didn't repeat
the mistakes of the Great Recession,
where we presided over a jobless recovery.
Americans were out on the street
for years and years.
They lost their homes.
Um, we did things
a little differently this time
[Stewart] Right.
-during the COVID pandemic.
We put money in people's pockets,
and it worked. We got people back to work.
Apparently too much money.
Oh, right. The fundamental problem
with our economy right now
is that Americans have it too good.
-Thank you.
Let's move on now.
-[panelists laugh]
But, John,
you were at the Treasury Department.
The Fed, don't they have a dual mandate?
Aren't they supposed to
deal with price stabilization
but also deal with full employment?
Why does it seem like they only bring out
the guns for price stabilization?
Well, you know, there was a period of time
when President Obama was president,
and we didn't--
-When was that?
Uh, 2009 to, what, 2016?
And there was a period of time where
we didn't have full employment, right?
It wasn't viewed as an emergency
in the same way as we view
increases in inflation as an emergency.
Now, that doesn't mean
that inflation isn't painful
or challenging for working people,
but we do have to be honest that we treat
those two realities differently.
If we don't have full employment,
we don't treat it as an emergency.
When we have inflation, we do.
And we can have an honest discussion
about why that is,
but we should be honest about the fact
that we do treat it differently.
It does seem as though they want us
to forget that 2008 and 2009,
that crisis ever happened.
When the Fed and the federal government
pumped trillions of dollars
into the system on the supply side,
into the banking system.
And now they're telling us
that these stimulus packages that came
to the people were just too irresponsible.
How do you square those?
Well, I think they do
need to worry eventually
Mm-hmm.
-[Rogoff] to have inflation come down.
They're not, I think,
aiming to have a lot of unemployment.
It's a debate about if you need it or not.
They'd like to have inflation come down
without having that.
And the only tool the Federal Reserve has,
and it's the most powerful tool,
is to raise interest rates.
But, Lindsay, that gets to the point
of who's in the room with the Fed?
Because it doesn't sound like
labor has a voice in any of this.
Yeah,
it's technocrats and multimillionaires.
The people don't have a voice at a Fed.
You can call your congressman if
you're upset about a piece of legislation.
You can say, "Hey, vote no on that,
'cause it's gonna throw me out of work."
You have no recourse at the Fed.
You can't call the Fed up and say,
"Hey, enough with the interest rate hikes.
I'm gonna be out on the street,
if you keep this up."
Um, there's really very little
accountability at the Fed right now.
It's not really a democratic institution.
The last 40 or 50 years,
you can make the case that
we've only done supply-side stimulus,
whether it be big tax cuts
that mostly went to wealthy
or cutting the corporate rate to 20%.
When you stimulate it at the demand level,
giving people checks,
it was really clear
the effect was immediate,
robust and-- and really efficient.
Doesn't that tell us we've been
doing it backwards for 40 years?
Well, I'd certainly say it's a good idea
to give money to lower-income people
and to tax higher-income people more.
That's absolutely a good idea.
If you do it all the time,
you do end up with a lot of inflation.
So there are a lot of countries
in the world
where it just runs out of control
all the time.
We have seen this movie before.
Why do they call it wage inflation,
but they never call it profit inflation?
I mean, the stock market has, what,
doubled or tripled in that time?
That money hasn't come down
to normal people.
Is it just that we're just very
comfortable with that as the status quo?
Yeah.
I think we have to think about the idea
that there's not a perfect economy,
but there is an econ--
What? Sir?
-[Rizzo] Right. Right.
But there are a series of choices
that we make, and they have results.
And there's a real trade-off
between what's good for capital
and what's good for labor.
You could argue, over the course of--
And-- [chuckling] And when does
the "what's good for labor" part kick in?
Yeah. I-I think that's the real difficulty
is that decisions we do make
over and over again
tend to be better for capital
than they are for working people.
When we talk about raising interest rates,
whether that's needed or not,
we know that there are downside impacts.
The downside impacts is that
economic growth is reduced.
People lose their jobs.
Those people who lose their jobs are at
the lower end of the economic spectrum.
So there are a lot of challenges and risks
involved with the decisions we've made.
The catch here is if you don't raise
interest rates when you need to,
then inflation goes up.
And everybody wants higher interest rates
for mortgages and everything,
'cause they want to be compensated
for inflation.
Here's what the workers have suffered:
automation has taken their jobs,
globalization has taken their jobs,
regulations have been removed.
Union power has, uh, dissolved.
So, it's been one erosion after another
of their power.
They finally get a little bit of
a foothold,
and immediately the Fed says,
"We gotta put a stop to this."
Yeah. I mean, the inflation hawks, um--
We may not be giving them enough credit.
I think the viewpoint
is much more dangerous
than just their cures for inflation,
right?
Their diagnosis is also a problem.
The prescription is obliterate
the labor market. We don't want that.
But the diagnosis is
Americans have it too well off,
and that means nothing else.
-[Stewart] Right.
And that's driving--
And then they're gonna want more,
and we can't have that.
-Right.
And-And these are the same folks
who are gonna oppose, um,
you know, student debt cancellation,
because we can't put another dollar
in Americans' pockets
because "Oh, no,
that will increase inflation."
Is a-- Is a permanent underclass
a necessity for American capitalism?
We-- We-- It didn't used to be.
[Stewart laughing]
-There used to be a-- a lot of rotation.
Well, we were able to change that,
weren't we?
[laughs] No, I mean, that's--
That is the single biggest problem
with our system at the moment.
There's not the mobility,
the Horatio Alger story,
if that means anything to this generation.
You know, it used to be--
Doesn't even mean anything
to my generation.
[audience chuckling]
-No, it used to be,
you know,
you were-- you were born in poverty,
and you'd work hard,
and you're enterprising,
and you pull yourself up,
and that's possible,
but it gets harder and harder.
And that's part of the reason
that Americans were tolerating
such high levels of inequality
and such high levels of
persistent inequality--
was the idea, "Okay, fine,
we're okay with a few rich people,
as long as everybody
has their shot at making it."
Um, but over the last few decades
it's become really clear
that economic opportunity in this country
is highly concentrated.
I mean, where the stork drops you
in the United States matters,
what race, um, you know, you are,
where-where you're born.
By the way, a brilliant economist,
but that's not actually how babies--
Oh, forget it.
We're not--
-[audience chuckling]
Do we have a free market economy?
Is it a free market economy?
Well, I think,
from a political perspective,
it's free in a sense.
But, no question, over the dozen years
that I spent serving
as a staff member of Congress,
when interests need something,
they tend to get it. And--
Moneyed interests.
-Sure.
And those needs that they have
sometimes pervert
what you might call a free market.
This actually brings up
a really interesting point,
and-and, Lindsay,
I'll let you end on this.
The-The thought I was having
as you were talking was,
"Well, those are political solutions,
and our political system is broken."
And, so, I think it's why I find
the Fed's actions so frustrating.
It's the one government institution
unencumbered by that analog system
of a broken democracy,
and to see them always act
with that agility and that decisiveness
on the side of a more corporate interest
is maybe the most frustrating part.
Yeah. I mean, look,
they can act with agility,
but they can't actually
solve the problem at hand, right?
And so the question is,
what can we do instead?
And there-- There's an answer to that.
We can build a different kind of economy.
[Stewart] What?
-[Owens chuckles]
There's no such thing as a free market.
We make markets.
Humans, nation states, governments.
We make decisions, the rules
that the markets play by, that's us.
That's-That's our responsibility.
And we can create a different market.
We can create a resilient economy.
I'm sorry, rainbows are shooting out
of your mouth right now.
[Owens laughs]
-And I am lovin' it!
Uh, first of all, thank you all
very much for joining us.
Second of all, uh,
I don't know what it is,
but economists have
the most soothing way of talking
I've ever heard in my life.
-[Owens laughing]
Uh, but thank you all for joining us.
Lindsay Owens, John Rizzo, Kenneth Rogoff.
Uh, thanks for joining us.
-[audience cheering, applauding]
So
Why? Why are we so focused
on raising interest rates,
basically employing the tool
of unemployment, to address inflation?
For more perspective on the fight
against inflation,
I sat down with former Treasury Secretary,
and interest rate hype man, Larry Summers.
Larry Summers, thank you for joining us.
-Good to be with you, Jon.
[Stewart] Inflation.
There are so many different elements
that contribute to inflation.
It's very complicated.
Well, ultimately,
inflation actually isn't that complicated.
When you have rising demand
and only so much supply,
prices keep going up.
And that's what basically happened to us,
as we had massive stimulus
and an economy
that could only produce so much.
We had huge levels of demand,
and those huge levels of demand kept
pushing up prices and pushing up wages.
But ultimately it was, uh,
you put too much water in the bathtub,
the bathtub overflows.
You put too much demand
into, uh, the economy
and you get high and rising, uh, prices.
But the San Francisco Fed says that is--
demand is maybe 30% to 35%
of the inflation.
Wages are really around 20%
of the inflation.
There's a huge
corporate profit aspect to it.
There's a huge supply chain aspect to it.
But our method for controlling it
seems really much more focused
on wages and employment.
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're gonna have a bigger problem
down the road.
But the stock market assets
have gone up 150%.
CEO pay has gone up 1,500%.
Workers' wages haven't gone up at all.
I think you're misdiagnosing the sickness.
First, Jon, inequality's a terrible thing.
The most serious problem
the American economy has
has been the cleavages
between those like you and me,
who are very fortunate--
-[audience chuckling]
That's why we need a strategy
of strengthening, uh, labor power,
uh, in the economy.
[audience laughing]
-The question, though, is,
is it an issue that somebody whose control
is over setting interest rates
and printing money can do much about?
Now you could say
-[Stewart] Boom!
that they shouldn't have responded
to the 2009 recession
Boom again.
-by cutting money.
Yes.
-By cutting interest rates.
You could say that.
-Yes, you could.
But do you really think--
And certainly that wasn't what
progressives were saying at that time--
[speaks indistinctly] It doesn't matter.
-[Summers] At that time,
progressives were saying,
"We need lower interest rates
so people can borrow money
to buy houses and put people to work."
But they were-- They were stimulating it
-"We need lower interest rates
for car loans."
-at the corporate level,
where they just put the money
in the hands of the bankers
and say, "You decide."
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.
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.
Just so we're clear, if--
-[Stewart] Yes.
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, uh, inflation.
Mm-hmm.
-So while you may see this
as having been tremendously,
uh, successful,
our fellow Americans who don't live
as comfortably as you and I do
have a lot of questions, Jon,
about what's happened.
And it's not hard to understand
why they have a lot of questions
Well, then--
-in light of what's happened
Right.
-to their purchasing power.
But you're suggesting
their purchasing power--
We took a good idea and overdid it
-I disagree.
by providing for too much, uh, inflation.
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 gonna do.
We're gonna throw ten 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.
I don't think it's a tenable view
that all of a sudden
corporations became greedy.
Of course there's monopolies
in the economy, Jon,
and we should be for
much more aggressive--
They've been bragging about it
on their earnings calls.
They're-- On their earnings calls,
they're saying,
"Our profits have never been higher.
We're killing it."
The markups during the pandemic are--
sometimes they're saying 70%
of what they were.
If there was a huge increase in the demand
for shrewd television commentary,
I imagine the demand for what you do
would go way up,
and I imagine you'd convert that
into higher wages
[audience chuckling]
-and getting more-- getting paid better.
You're saying it's the market at work.
-I don't think you'd call yours--
I don't think you'd call yourself
a gouger, um, when you
I would absolutely call myself a gouger.
-when-- when you did that.
And by the way, the effect of, uh,
the talk show business
is very different
than the effect of ExxonMobil, right?
I mean, let's be fair, that--
I think-- Isn't this show
gonna be on Apple TV?
Correct.
-And I think Apple TV
is worth about
five times as much as Exxon.
I think Apple's price--
Since the stimulus began,
Apple's value has gone up
by about 1.2 trillion, uh, dollars.
-Right.
That's $4,000 for every American,
just in increase in the value
of, uh, Apple.
You just made my point for me.
Do you feel that Apple is somehow
gouging or doing something wrong?
Yes. Of course.
-[audience laughing]
So--
-And Exxon is, and Mobil is--
So let's-- Let's talk about Apple.
Let's talk about Apple.
Do-- Do you think Apple
-Okay.
should just sell phones for less
and not have enough phones?
What would you have Apple--
What would you have Apple do?
You're saying to me, "Jon,
market forces are market forces.
And if demand goes up,
are you suggesting, young man,
that Apple should charge less
than they could charge?"
Let me flip that on you.
When there's a tightness
in the labor market,
what you're saying is
the workers shouldn't do the same.
That the workers, just following
the same capitalistic principles
that allow Apple to charge more
for their phones,
shouldn't charge more because
wage inflation is driving inflation.
Every-- That's not at all
what I'm saying, Jon.
That's exactly what you're saying.
-No, no. Actually it isn't.
Every worker should get
as high a wage as they can.
It would be a terrible idea
But the Fed is going to intervene--
-to try to restrict the wages.
The Fed is going to intervene
to make that not possible.
No. The Fed is intervening
to control the overall level
of demand growth.
And what will that do to-- And what
will that do to the labor market?
Because if it goes
much faster than supply--
What will it do to the labor market?
It will loosen it.
-Look, it is likely to lead to
To looser labor markets.
-uh, a somewhat, uh, looser labor market.
Exactly. Now--
-We hope to minimize
that, uh, consequence.
If the labor market
had not gotten to the point
where there were two vacancies
for every job,
then it wouldn't have been necessary to--
But why is it, though,
that when we get to a point
where corporate profits
are at record highs,
why can't the Fed intervene
on behalf of the worker
to cool the profit market?
'Cause-- What the Fed does
is the Fed has control
only of the overall level of demand.
Now you could be saying--
-That's--
You could be saying
-That's not true.
what Richard Nixon said.
-That's not their mandate.
And if inequality is, as you say,
the biggest problem facing our economy,
then always penalizing workers in a crisis
is not the answer to the biggest problem.
So what I would suggest is
that somehow the Fed
honor its dual mandate.
Not just the mandate
for price stabilization,
but the mandate for full employment,
and not put those two things at odds.
And that, if we were okay
with 10% unemployment,
uh, after 2008,
when inflation was below 2%,
why can't we be okay riding 4% and 5%
while still trying to maintain
as many jobs as we can possibly maintain?
I guess that means just giving people
lots of money
and just have the Fed handing people--
-Don't-- Don't--
Handing people money--
-Don't slippery slope my--
I'm not talking about irresponsibility.
I want to understand--
-They've done it for corporations.
Your point is there's only one way
to control it,
and my point is
that's a failure of imagination
and one that has caused
the workers to suffer.
If I thought that allowing inflation
to continue
would add to the purchasing power
of American workers,
I would be for it.
But the approach of taking inflation
at high rates
and just allowing it to continue,
I don't know of any instance in history
where that's ended
other than with some kind of
really hard crash
of which the workers
were really the victims.
Well, I'm saying let's not be hasty
with saying inflation's too high,
so let's create a recession
for ten million people,
or a depression for five million people,
by raising unemployment
from 3.6% to 8% or 10%.
So that's what I think.
And I don't think it's crazy.
But I do appreciate you sitting down.
And thank you very much for joining us.
[audience cheering, applauding]
-You know
I think from now on,
I'm gonna end every conversation
with "And I don't think it's crazy."
[audience chuckling]
"But I appreciate you coming by."
That's our show. For more resources,
head to our website.
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We also have a weekly podcast.
It's woke. You don't worry about it.
And, uh, I leave you
with one final "for fuck's sake."
Costs are spinning out of control.
I've brought the wheel of inflation.
Let's go ahead and give it a spin.
As a percentage,
how much is milk up in 12 months?
[reporter] 50%.
-50-- [chuckles] 50%. Anybody else?
Okay.
-[reporter 2] 30%.
30%.
So milk is up 5.5%.
-[audience chuckling]
Let's give her a good spin.
All of these prices need to come on down.