Commentary “Having a little inflation is like being a little pregnant.”
— Leon Henderson, FDR Administration This past summer, Sen. Elizabeth Warren (D-Ma.) berated Larry Summers and other interest rate hawks for possibly causing a recession with their calls for higher rates. She called Summers “someone who has never worried about where his next paycheck will come from.” While that’s probably true, Warren outed herself as one of several progressives who are willing to accept higher inflation if it means low unemployment.
This seems to be a growing and preferred trend among progressives: they’ll sacrifice the Federal Reserve’s congressional mandate to maintain stable prices in order to prioritize the Fed’s other mandate to maintain “full employment.” For example, Jason Furman, who headed Barack Obama’s Council of Economic Advisors, recently retweeted a graduate student’s thesis calling for a Fed target rate of inflation between 2 percent and 3.5 percent after citing the supply shock as a major contributor to inflation….