CNN economic analyst says to have a ‘kinder’ economy, inflation needs to occur

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The New York Times ran a new episode of “The Ezra Klein Show” on Friday with an interview with Rana Foroohar, a global economic analyst at CNN and a columnist for the Financial Times. In the interview, Foroohar called for a ‘kinder’ and environmentally friendly economy, and said inflation must occur in the short term to achieve these goals. Foroohar also strongly criticized the Federal Reserve for creating what she describes as the “bubble of everything” in financial markets.

“What is the cost of something if you actually have a real carbon price, and then you have to calculate how much it costs to carry it across tens of thousands of kilometers of the South China Seas? and labor standards?” asked Foroohar. “That’s the conversation that’s going on right now. And once you start pricing in all these costs, and you start really thinking about the economy in a different way, then yes, it’s certainly inflationary.”

She noted how Democrats are unwilling to admit that inflation may be necessary to transform the economy with the midterm elections fast approaching.

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U.S. President Joe Biden announces the appointment of Federal Reserve Chairman Jerome Powell to a second four-year term in the Southern Court Auditorium of the Eisenhower Executive Office Building at the White House in Washington, U.S., Nov. 22 of 2021.
(REUTERS/Kevin Lamarque)

“And that’s something that I think, unfortunately, that no politician, particularly Democrats now, before a midterm or presidential, wants to land, which is some of the transitions to a kinder, kinder government, I believe more stable and more stable. ultimately, a more resilient economy, will be inflationary in the short to medium term.”

Foroohar called on the US and Europe to “put a price on carbon”.

“Of course, there’s an incredible opportunity now for the US and Europe to come together on climate change patterns and maybe even put a price on carbon, which would immediately bring down Chinese mercantilism because it would really help us calculate the cost of labor. Cheap, child labor, long supply chains, that consume a lot of energy to sell us cheap stuff to put at Walmart or sell on Amazon, all these things are happening.”

She added: “We also have a new generation of consumers, of citizens, of workers who are younger, and they really care about the environment. And they care about food, and they care where they don’t want fast fashion. understand the cost of these things.”

The CNN analyst predicted that deglobalization will continue as “security hawks on the right” want “safer, more resilient and independent supply chains” and “some green New Dealers” want to “support work in America and have jobs”. .

“And so I see so many tailwinds and I think at the end of the day we’re going to have a lot of turmoil, but I think they’re going to take us to a better place. Is it over there.

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Pedestrians walk past the New York Stock Exchange on May 5, 2022 in the Manhattan borough of New York.

Pedestrians walk past the New York Stock Exchange on May 5, 2022 in the Manhattan borough of New York.
((AP Photo/John Minchillo, Archive))

Foroohar also criticized the role the Federal Reserve has played in contributing to inflation and what she describes as an “everything bubble” in financial markets. The Fed is “making things that have no value look like they have a lot of value until they are not,” said Foroohar.

“Long before COVID, long before the financial crisis, the price of housing, education, healthcare, all these things were going up faster than anybody’s wages. plummeting in the economy,” she said. “The Fed kind of manipulates the economy, keeps rates low, keeps borrowing costs low. That allows for a lot of debt creation. cryptocurrency, this allows them to get inflated in price because investors of all types are looking for returns.”

Foroohar compared the rise in value of cryptocurrencies and their recent drop to gold during the Weimar Republic.

Graph showing inflationary measures

Graph showing inflationary measures
(inventory)

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“But if you look at how gold prices were rising in the Weimar Republic and compare it to the cryptocurrency until recently, very similar, boom-bust, we can understand why this might be,” she said.

She criticized elected lawmakers and the Fed for manipulating the market that benefited Wall Street more than Main Street.

Inflation is at a 40-year high and the stock market entered bear territory on Friday. Many economists predict a recession in the near future.

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