During an interview aired on Friday’s broadcast of Bloomberg’s “Wall Street Week,” economist, Harvard Professor, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers argued that the core issue with inflation is the fact that the economy is overheated and the problem of inflation won’t be fully solved until the overheating in the economy is solved. Summers also argued that blaming corporate greed and price gouging for inflation is “likely” to make the inflation problem worse because doing so will hurt business confidence and lower the level of needed investments.

After dismissing President Joe Biden’s attempt to blame the February inflation numbers on the war in Ukraine, Summers stated, “This is a consequence, fundamentally, of an overheated economy, and we are not going to have a full solution until we do something about that overheated economy. That’s just the fact of the situation. Buying America[n] will make this worse. Because it will mean higher prices. Blaming corporate greed will chill business confidence, will reduce investments in expanding capacity, and will likely make this worse. We need to simply operate the tools of macroeconomic policy in responsible ways.”

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