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The New York Times on Friday published a new episode of “The Ezra Klein Show” with an interview with Rana Foroohar, CNN’s global economic analyst and Financial Times columnist. In the interview, Foroohar called for a “friendlier” and greener economy, saying that inflation needs to happen in the short term to achieve those goals. Foroohar also heavily criticized the Federal Reserve for creating what it calls an “everything bubble” in financial markets.
“What does something cost when you actually have a real price of carbon, and then you have to add up how much it costs to ship it tens of thousands of miles from the South China Sea? What does it cost if you have an appropriate environment? and labor standards?” Foroohar asked. “That’s the conversation that’s going on. And when you start pricing in all these costs and start thinking about the economy really differently, then yes, it’s certainly inflationary.”
She pointed out that Democrats are reluctant to admit that inflation may be necessary to transform the economy as the midterms are fast approaching.
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US President Joe Biden announces the nomination of Federal Reserve Chair Jerome Powell for a second four-year term in the South Court Auditorium of the Eisenhower Executive Office Building at the White House in Washington, United States, on November 22, 2021. (REUTERS/Kevin Lamarque)
“And that’s something that I think unfortunately no politician, especially the Democrats, want to end up with right now before a midterm or a presidential election, which is some of the transitions to a kinder, smoother, I think more stable, and ultimately more resilient economy, will be inflationary in the short to medium term.”
Foroohar urged the US and Europe to “put a price on carbon”.
“There is, of course, an amazing opportunity right now for the US and Europe to come together on climate standards and maybe even put a price on carbon, which would immediately turn off Chinese mercantilism because it would actually help us calculate the cost of cheap labor , Child labor, long supply chains that use too much energy to ship cheap stuff to us to store at Walmart or sell on Amazon, all these things happen.”
She added: “We also have a new generation of consumers, citizens and workers who are younger and who really care about the environment. And they care about groceries and they care about where they don’t want fast fashion. You understand the cost of these things.”
The CNN analyst predicted that deglobalization will continue as “security hawks on the right” want “safer, more resilient, independent supply chains” and “some green new dealers” want “to support America’s workforce and have jobs.”
“And so I just see so much tailwind and I think ultimately we’re going to see a lot of upheaval, but I think they’re going to put us in a better place. Because we talked about it in the last hour plus, the old system was unsustainable,” she said.
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Pedestrians pass by the New York Stock Exchange, May 5, 2022, in the Manhattan borough of New York. ((AP Photo/John Minchillo, file))
Foroohar also criticized the role the Federal Reserve has played in contributing to inflation and what she calls the “everything bubble” in financial markets. The Fed has “made things that have no value look like they have a lot of value until they don’t anymore,” Foroohar said.
“Long before COVID, long before the financial crisis, the prices of housing, education, health care, those things were all rising faster than anyone’s wages. So that’s one reason many of us haven’t felt more prosperous despite all the money sloshing around in the economy,” she said. “The Fed is kind of manipulating the economy, keeping interest rates down, keeping borrowing costs down. This allows for large debt accumulation. It allows for riskier assets, which in many cases may not even be profitable, or as in the case of crypto, could be entirely speculative, allowing them to inflate the price to a certain extent because investors of all types are looking for returns.”
Foroohar likened cryptocurrency’s inflation in value and its recent crash to gold during the Weimar Republic.
Graphic with inflation measurements (istock)
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“But if you look at how gold prices went up in the Weimar Republic and compare it to crypto until recently, very similar, boom-bust, and we can understand why that might be,” she said.
She has criticized elected lawmakers and the Fed for market manipulation, from which Wall Street has benefited more than Main Street.
Inflation is at a 40-year high and the stock market entered bearish territory on Friday. Many economists are forecasting a recession in the near future.
Joe Silverstein is a production assistant at Fox News Digital.