Christine Lagarde, president of the European Central Bank, talked with Margaret Brennan on Face the Nation, and the first topic was inflation. Which, in case people haven't noticed, is a global problem, not simply a "Joe Biden did this" gas-pump-sticker problem.
Lagarde has suggested she'd wait a while before raising interest rates, noting that she and the Fed "share the same resolve" - taming inflation - but they're "facing a different beast." She said that energy prices account for 50% of the inflation in Europe.
If I raise interest rates today, it is not going to bring the price of energy down... So, we will be interrupting the purchases of assets in the course of the third quarter. High probability that we do so early in the third quarter. And then we will look at interest rates and how — and by how much - we hike them. But we have to be data-dependent because of the sources of inflation that we have at the moment.
She said her bank's mandate is restoring price stability at around 2%, but they have to act in a "sufficiently well-sequenced, well-calibrated for us in Europe, gradual way" to not cause a recession. And, she said, they have to do things "in a sufficiently smart and subtle way" to achieve their goals, including reducing the flow of money that allows Russia to continue the war against Ukraine.
That includes sanctions, cutting off their access to SWIFT, seizing assets from Russian oligarch, and so on. That said,
If we were to take abrupt measures that would induce an increase of the price of oil or gas around the world, from which the Russians would eventually benefit, then that would not be the right policy move.
Europe has adopted a compete boycott of Russian coal, and there's "a lot of work going on concerning oil, concerning gas, and, you know, there will be more stories to tell a bit later on."
Brennan noted there's a bit of debate here that the government bears some blame for inflation, including $6T in COVID stimulus, a third of which went out "on President Biden’s watch last spring when the economy was already recovering." Noting "Europe didn’t spend like this," she wondered if our path exacerbated inflation.
Lagarde said Europe put "half as much" as the US on stimulus; rather, the focus was "predominantly on keeping the jobs, not necessarily sending the checks." That's not the same as what's going on here.
And the current situation you have in the labor market here in the US is clearly contributing to possible strong inflation and second-round effect, where prices go up, wages go up, short supply of labor, wages continue to go up, and that feeds back into prices. That’s one of the differences between our two economies.
Lagarde said we're in a "difficult moment, but it’s one where a very interesting phenomena developed." She explained that Russia's attack on Ukraine "has produced three key results."
... it has resurrected NATO. It has united the Europeans more than ever. And it has strengthened a nation, Ukraine. The price of that is terrible. The death, the destruction, the devastation, and we are all concerned and all want to help. But this is quite an interesting development. And we have to be united and resolved to actually address the situation together because there has to be solidarity.
Another well-known woman was in the classrooms yesterday: Sen. Elizabeth Warren (D -I'm a Progressive Capitalist, not a Socialist Like Bernie), who talked with Kristen Welker on Meet the Press. Warren had an op-ed in the NY Times, which Welker quoted in part.
Democrats cannot bow to the wisdom of out of touch consultants who recommended we simply tout our accomplishments. Instead, Democrats need to deliver more of the president's agenda, or else we will not be in the majority much longer.
Warren also said that, even though Dems hold both houses of Congress, "Republican senators and broken institutions have blocked" a lot of the progress the Dems promised during the 2020 campaign. Welker asked her to explain that; here's Warren's answer.
Look, my point is not to look in the rear-view mirror. My point is to say we've got nearly 200 days left between now and the election.
And she went on to talk about what families are facing: which groceries to send back, unaffordable student loan repayments, inflation (food, gas), and said
Democrats ran and always run on trying to make government work for working people. We've got nearly 200 days left. That's what we need to put our energy on. If we don't, then we haven't been there. So that's what we need to do.
Welker circled back around to one of the Dems who is blocking his party's agenda: Sen. Joe Manchin (D- I'm a Coal Farmer, Dammit!) and his position that he'll support big legislation solely if it addresses climate change, prescription costs, and reducing the deficit - nothing else. Welker wondered if Warren could support a package like that.
Ignoring the question, Warren focused on her agenda: attacking inflation by bringing down costs for families by making childcare more affordable so millions of women can go back to work and that increases our capacity and helps drive down inflation (I paraphrased her).
Welker tried again, this time naming Sen. Kyrsten Sinema (D-Roadblocks Are My Favorite Kind of Infrastructure), who agrees with Manchin; Warren's wish list would add to the deficit and make inflation worse. Welker asked again if Warren could go along with the three-issues-only bill - and Warren added more things to her 200-day to do list.
So, the point I'm trying to make is that we need to do more. Yes, we need to do climate change. Yes, we need to do prescription drugs. And we need to make sure that we're paying for it by making sure that giant corporations that make billions of dollars in profits and pay nothing in taxes are actually paying a minimum tax – and yes, Amazon, I'm looking at you in that one – and other corporations. Look, we need to also authorize the FTC so they can go after companies that are price gouging. And we need to remember that it's not only what Congress can do. It's also what the administration can do.
And that's where she said, "Mr. President, today would be a great day to cancel $50,000 in student loan debt for tens of millions of people across this country."
My point is that we have nearly 200 days. And not just one negotiation going on. We should have multiple negotiations going on. There is a lot we can deliver for American families. And we need to make that happen.
Welker said that "two Obama-era economists" have said extending the moratorium on loan repayment "during this kind of inflation" is both regressive and inflation-inflating. Warren disagrees.
No, actually not paying student loan debts has already been baked in. But what matters is how we're going to be out there helping millions of American people. You know, keep in mind, 40% of the folks who have student loan debt do not have a college diploma. These are people who tried, but life happened... But now, they earn what a high school grad earns and they are trying to manage college level debt...It is the job of Democrats, it is the job of the party in power to help make people's lives better. We can do that. And the president can do that one all by himself.
She did answer one question, firmly and repeatedly.
I'm not running for president in 2024. I'm running for Senate. President Biden is running for re-election in 2024 - and I'm supporting him. You can ask it any way you want, but I'm going to say the same thing. President Biden is running in 2024 and I'm supporting him. Cheerfully.
Finally (and I'm not sure why), Welker asked if Warren was satisfied with the administration's handling of the decision ending the mask mandate on public transportation, including the appeal. Warren said the appeal is about looking forward and ensuring the CDC can implement decisions to protect public health, whether it's COVID or something else down the road.
Sadly, neither mentioned how confused people were, seemingly not knowing the difference between state and federal mandates, and how people didn't realize that wearing their mask until they were at their final destination, where they could get familiar with any applicable state or local regulations, made sense. And yes, that sounds judgmental, but based on last week's reporting, it seems necessary.
FYI, when you come to class, if you want to wear a mask, you're free to do so. You're also free to not wear one, because we're an online educational institution.
See you around campus.
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