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The New York Times published a new episode of “The Ezra Klein Show” on Friday featuring an interview with Rana Foroohar, CNN’s global economics analyst and Financial Times columnist. In the interview, Foroohar called for a “softer” and more environmentally friendly economy, and said inflation must occur in the short term to achieve these goals. Foroohar also strongly criticized the Federal Reserve for creating what it describes as the “everything bubble” in financial markets.
“What is the cost of something if you actually have a real price on carbon, and then you have to calculate how much it costs to ship it tens of thousands of miles across the South China seas? What is the cost if you do you have a good environment and work standards?” Foroohar asked. “That’s the conversation going on right now. And once you start evaluating all those costs and you start really thinking about the economy in a different way, then yeah, it’s definitely inflationary.”
She noted that Democrats are unwilling to admit that inflation might be needed to transform the economy as the midterm elections fast approach.
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“And that’s something that I think, unfortunately, that no politician, especially Democrats right now before a midterm or a presidential election, wants to land on, which is part of the transitions to a kinder environment , softer, I believe more stable, and an ultimately more resilient economy, are going to be inflationary in the short to medium term.”
Foroohar called on the US and Europe to “put a price on carbon”.
“There is of course an incredible opportunity right now for the United States and Europe to come together on climate change standards, and perhaps even put a price on carbon, which would immediately eliminate commercialism. Chinese because it would actually help us calculate the cost of cheap labor, child labor, long supply chains, that take too much energy to haul us cheap things to put in Walmart or for sale on Amazon, all of these things happen.
She added: “We also have a new generation of consumers, citizens, workers who are younger, and they really care about the environment. And they care about food, and they care about what they don’t want fast fashion. They understand the cost of these things.”
CNN analyst predicted de-globalization will continue as ‘right-wing security hawks’ want ‘more secure, resilient and independent supply chains’ and ‘some new green resellers’ want to ‘support the hand to work in America and have jobs”.
“And so I see so many tailwinds and I think ultimately we’re going to have a lot of turbulence, but I think they’re going to take us to a better place. Because, as we talked about during the last hour and more, the old system was untenable,” she said.
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Foroohar also criticized the role the Federal Reserve has played in contributing to inflation and what it describes as an “everything bubble” in financial markets. The Fed has “made things that have no value look like they have a lot of value until they have no more,” Foroohar said.
“Long before COVID, long before the financial crisis, the price of housing, education, health care, all of that was going up faster than anybody’s wages. So that’s one of the reasons why which a lot of us didn’t feel richer despite all that money shaking the economy,” she said. “The Fed is kind of manipulating the economy, keeping rates low, keeping costs down. low loan. This allows a lot of debt creation. This allows for riskier assets which may not even be profitable in many cases or could be totally speculative like in the case of crypto, it allows them to kind of inflate the price because investors of all kinds are looking for returns. »
Foroohar compared the surge in value of cryptocurrencies and its recent crash to gold under the Weimar Republic.
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“But if you look at how gold prices were rising in the Weimar Republic and compare it to crypto until very recently, very similar, boom-bust and we can understand why that might be,” a- she declared.
She criticized elected lawmakers and the Fed for manipulating the market which benefited Wall Street more than Main Street.
Inflation is at its highest level in 40 years and the stock market entered bearish territory on Friday. Many economists predict a recession in the near future.