​Curry: Tame inflation through less oil consumption

Brookfield CT

13 June, 2022

3:04 PM

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By Scott Benjamin Bill Curry says in the immediate future, neither the president nor the Federal Reserve Board can contain the worst inflation - 8.6 percent in May - since the first Billy Idol video aired on MTV. "The president, any president, is not someone who is well-situated to manage the short-term economy," said Curry, who served for two years as a counselor to Democratic former President Bill Clinton. During the surge in inflation in the 1970s, Republican former President Richard Nixon imposed wage-price controls, without success. Republican Gerald Ford, who succeeded Nixon, established a Whip Inflation Now campaign in which he encouraged personal savings and disciplined spending habits." It was considered a public relations blunder. Curry said, "Most of these strategies are ineffective." Regarding the response to the current surge in inflation: "They're going to hold hearings on the Hill as to whether there has been price-gouging," Curry said. "There may have been, and good luck to them. But that search to throw a net over some hapless culprit doesn't make a lot of sense to me." "Imagine what the average person feels when they turn the television on and hear a politician say they're going to address the problem by holding a hearing," he exclaimed. "The only thing worse is to set up a Blue Ribbon Commission." "People want to know what you're going to do about it," Curry said in a phone interview with Patch.com Washington Post columnist Catherine Rampell recently wrote, "There is not much Democrats can do to curb inflation now. That's mostly up to the Federal Reserve." Wall Street Journal chief economics commentator Greg Ip has stated, "if [Democratic President Joe] Biden had the last word on inflation, you might worry the U.S. was about to repeat the 1970s. But Mr. Biden doesn't have the last word; Federal Reserve Chairman Jerome Powell does. Moreover, Mr. Biden affirmed exactly that in a Wall Street Journal Op-Ed last week, giving Mr. Powell the political cover to raise interest rates and get inflation down." Curry declared, "The Federal Reserve Board can do nothing about oil prices. The Federal Reserve cannot end the Ukraine War. The Federal Reserve Board cannot restore the supply chain. The reasons for the high inflation are not connected to those tools" that the Fed can employ. However, retired Washington Post economics columnist Robert Samuelson has praised Republican former President Ronald Reagan for providing political support to former Federal Reserve Board Chairman Paul Volcker in the early 1980s when he substantially increased interest rates and unemployment rate surged to 10.8 percent, the highest at that point in the United States since World War II. However, the result was that it broke a cycle of inflation that had lasted for about 15 years. Curry said, "One day we will live in a society that will recognize that the macroeconomic tools of economic management are as cruel as the tools of medieval surgery." He added, "The Volcker pain was substantial. I don't think we ever really recovered in wage policy. So, I don't heroize him as much as others do. . . There has to be a better way to tame inflation than a recession." Curry also disagrees with Larry Summers, who served as Treasury Secretary in the Clinton Administration and recently said that "wage inflation is a core measure of inflation." Curry remarked, "Wage increases have been trailing inflation, not driving it." Curry - a two-time Democratic gubernatorial nominee who lives in Farmington - said the current inflation is due to the pandemic, supply chain obstacles, climate change and the war in the Ukraine. He explained, "I've never seen a time when the sources of inflation are more obvious." "Biden didn't cause inflation," Curry exclaimed. "Inflation is usually a global phenomenon." Curry added that the rate of inflation in Europe is "slightly ahead" of the United States. "We need to realize that there is no answer to this except getting off oil," he commented. "We can't be dependent on the Venezuelas, Saudi Arabias and Russias of the world forever." Curry said that although presidents can't do much in the short term, they "can be very well situated to create long-term prosperity through wise decision-making" on energy, transportation and education policies. He said that Biden should "talk about doubling and tripling our solar investment" to "bring down the consumption of oil, gas and coal," and get the legislation on expanding semiconductor manufacturing, which is now in conference committee in Congress, to his desk. However, as a former member of the Clinton White House, isn't part of the answer to follow the game plan of the 42nd president, which resulted in four successive federal budget surpluses through his second term? Those were the first surpluses in 29 years. A 2021 C-SPAN poll of historians and journalists rated Clinton fifth out of the 45 former presidents in the category of Economic Management. Wall Street Journal columnist William Galston, who was a domestic policy adviser to Clinton, recently wrote, "During eight years of the Clinton administration, annual real growth in gross domestic product averaged a robust 3.8% while inflation was restrained, averaging 2.6%." "In sum, during the heyday of neoliberalism, Americans weren't forced to choose between high growth and low inflation or between aggregate growth and fairness for the poor, working class and minorities," he added. "This helps explain why Mr. Clinton's job approval stood at 65% when he left office." Curry said Clinton made the correct decision in "reducing the deficit, which helped bring down interest rates." He indicated this was an instance where a president can have short-term impact on the economy. However, he said the former president was too committed to the Internet boom of the 1990s. "It's the first technological change that destroyed more jobs than it created," Curry said, noting that Clinton did not take the steps that former presidents Theodore Roosevelt and Woodrow Wilson did in the early 20th Century to combat the impact of the industrial revolution. "Clinton believed in [the technology expansion] 100 percent," Curry exclaimed. "Clinton believed in the consolidation of capital. He believed in global unfettered trade. There was a bipartisan consensus that these were going to create a whole new world and stable economic growth. That as president, all he had to do is get out of the way and let it happen." He said that, "It became almost impossible for workers to negotiate for higher wages because the economy was so integrated. Corporations "scoured the world for weak governments and low wages." Curry added that the Wall Street deregulation in 1999, including the revisions in the Carter Glass-Henry Steagall Act, of 1933 - which had prohibited banks from combining their investment and commercial portfolios – led to "the greatest financial implosion since the Great Depression" as banks became over-leveraged. During the floor debate in 1999, then-U.S. Sen. Byron Dorgan (D-N.D.) said, "I'll bet one day somebody's going to look back at this and say, 'how on earth could we have thought it made sense to allow the banking industry to concentrate through merger and acquisition to become bigger and bigger and bigger. How did we think that was gonna help this country?" Curry said that Dorgan was correct. It led to a "financial disaster." 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