Federal Reserve Chairman Jerome Powell warned Americans on Friday that more pain was on the way as they tried to float President Biden’s sinking economy. And on CNN’s Here’s What We Do, White House correspondent John Harwood flashed a sadistic streak, boosting the administration’s argument that all the pain and anxiety Americans were being subjected to was really for their own benefit down the line.
“[T]he Fed has two different mandates, one is to maximize employment, the other is to keep inflation at a reasonable level,” Harwood said, noting that the Fed had been mostly focused on “maximizing employment” out of fear of a “slow recovery from the pandemic.”
He added that Powell’s speech “was signaling that he is not going to be the Fed chair who eases up too quickly. He is determined – now that he has pivoted toward addressing inflation, he’s going to get the job done.”
Harwood suggested that we would be better off if there was an increase in economic hardship.
As Rahel said in his soundbite, “There’s going be pain.” And while we agree that there is going to pain, it is also in service of Jerome Powell’s belief that inflation will have an impact on the economy. It is a major problem that must be solved. According to him, the American economy is going to be better off than the American population.
Economic and political commentator Catherine Rampell tried to take the edge off by suggesting Powell was just trying to “convince markets that the Fed is super serious about inflation.” “And I think the subtext here is a little bit, well, if they talk tough, if they talk super hawkish then maybe they don’t have to act quite as hawkish down the line,” she explained.
They eventually pivoted to talking about Biden’s student loan bailout plain and Harwood boasted – on behalf of the White House – that they were ready and confident in taking on the critics:
At this stage in the political campaign, Joe Biden has gotten the Congress’ legislative agenda passed. Having seen inflation numbers improve for at least a little while, I believe Joe Biden would be happy to fight him on student debt relief and wiping out student debts of 20 million.
(…)
I think the administration – Joe Biden has a new bit of a chip on his shoulder and I think he’s happy to wage that fight and point to other things that may be unfair in our tax code and our economy and satisfy himself that voters are going to come down on his side on this issue.
Rampell however was one of the critics. “What I mean is Democrats seemed to have decided that the only way to help the needy, the only way to help the poor and the middle-class is also to give some money to the rich,” she sniped. “In this case, the argument from the progressive left is, well, the only way we can help people who are struggling with student debt is to also give forgiveness to households making $250,000 a year which is what this plan does.”
The lucrative sponsorships of Audi and 4imprint enabled this spin that claimed your pain was good. You can find their contact information here.
You can find the transcript below. To read it, please click on “expand”.
CNN’s Here’s What We Do
August 26, 2022
Eastern at 11:19.48(…)
KATE BOLDUAN [Federal Reserve Chairman Jerome] Powell’s speech. Was there anything that stood out? What is the White House taking away from it?
JOHN HARTWOOD: Kate. The Fed is charged with two mandates. One is to increase employment and the second is to maintain a moderate level of inflation. For a very long time Jerome Powell, like the Biden administration, leaned heavily toward maximizing employment as a – in their monetary policy and in the administration’s fiscal policy because they were concerned about a slow recovery from the pandemic.
Jerome Powell, having made the same mistake, and after hearing many warnings by economists that there could be a serious multi-year problem in inflation, was signaling that Powell isn’t going to be the Fed chairman who slows down too much. He is determined – now that he has pivoted toward addressing inflation, he’s going to get the job done.
It’s also important to remember that Rahel’s soundbit indicated that there will be pain. We say that there will be pain because Jerome Powell thinks that inflation will have an overall positive effect on the economy. Inflation is a serious problem that must be addressed. He believes that the American economy will be better off than the American population.
BOLDUAN – Catherine, there are always two sides to the Fed Chairman’s speech. There’s what he says and what he doesn’t. Which was your take?
CATHERINE RAMPELL – I believe he wanted to convince the markets that the Fed was serious about inflation; recent encouraging data on inflation is not enough to make them take the foot off the gas pedal. This is where the subtext lies. They can speak tough but must be very hawkish if they are talking super hawkish. This means that the Fed will not have to raise interest rates much if the market is convinced that they’re very focused on inflation.
BOLDUAN
RAMPELL: Right. It is important to have expectations. There is much debate about economics and what causes price rises. However, the theory is that people who believe that prices will go up become a self-fulfilling prophecy. Right? Right? You want to stop this from happening and convince the public, markets, consumers, businesses, that it is under control.
(…)
Eastern, 11:24:46
BOLDUAN. On the student — he was speaking about the student debt relief program last night. John is finally answering the questions about its price. How does this affect the political and economic conversation around all of that?
HARWOOD This is not a policy economists, Republicans and Democrats, like. It’s a wasteful way to distribute money, giving it to those who may need it or benefiting from it. But it gives money away to others who have more money and shouldn’t.
After advancing their legislative agenda to the Congress and seeing inflation numbers improve for at least a few months, Joe Biden seems happy to offer student debt relief. He wants 20 million students debt eliminated. Pen Wharton released today’s new report, stating that 75 percent would go to individuals earning under $88,000 per annum.
I think the administration – Joe Biden has a new bit of a chip on his shoulder and I think he’s happy to wage that fight and point to other things that may be unfair in our tax code and our economy and satisfy himself that voters are going to come down on his side on this issue.
BOLDUAN: Catherine, your column on this is headlined: “Biden’s student debt plan is a Democratic version of ‘trickle-down’ economics.” I read it with quite a bit of interest. How do you interpret this?
RAMPELL. What I meant is that Democrats seem to believe that tax cuts for the wealthy are the best way to aid the poor, and that this is the only way they can help them. Progressive left arguments that we cannot help those who struggle with student debt are, in this instance, to give forgiveness to families making over $250,000 per year.
(…)
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