During an interview on last Friday’s edition of Bloomberg’s “Wall Street Week,” economist Larry Summers made the statement saying “We’re actually closer to being back to the inflation levels of the 1970’s than most believe.

Speaking to David Westin, host of ‘Wall Street Week,’ Summers stated, “Look, there’s been an effort as there always is when you have inflation., to dismiss it as due to specific or temporary factors.”

Summers continued, “That is much more wrong than right. You can see it when you take out all the extreme observations in both directions, you can see it, as I’ve emphasized, by looking at the wages, which are the ultimate source of costs in the economy. We’ve got a pretty fundamental inflations problem in our country.”

Summers added, “You know David, I saw something recently that brought this home to me. People think of us as having had 13%, 14% inflation in the 1970’s. But that’s only because of the way it was calculated then. If you use the same way we calculate inflation now, it got just above 10% in the 1970’s. So, getting to 8.5%, we’re actually closer to being back there than I think most people realize.”

Summers has held a number of titles including Professor, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton.

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9 months ago

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