Friday March 18, 2022
12:30-1:30 p.m.
Online Zoom Meeting
Dear Colleagues:
On March 11, the print edition of the New York Times headlined that, “Inflation Rises At Fastest Clip in 4 Decades, based on February economic data. Then, the Sunday Times ran a long article (originally online March 9) titled, “Skyrocketing Inflation Starts to Get Deeply Personal,” based on a February survey that asked 2,200 respondents about their perceptions of price trends. The report emphasized that inflation now is very different from when it first began to become visible a year ago: “when asked which of the price increases have caught their attention, many mentioned necessities like gas, milk, ground beef and bread – a notably different universe of products than the narrower set of items, like used cars and raw lumber, that were soaring in price last spring.”
Inflation seems to have become the major domestic policy issue, and public opinion about the Biden administration’s response is decidedly negative. Concern about inflation has revived beliefs that the federal budget deficit needs to be reduced so as to prevent high inflation and interest rates – beliefs that were extremely powerful in the 1980s but had faded after a few decades of not coming true. Concern about increased debt feeding inflation was one of the major reasons Senator Joe Manchin gave when announcing that he would not vote for President Biden’s Build Back Better proposal. Obama Administration economists Larry Summers and Jason Furman, who in 2019 were saying it was time to start worrying less about budget deficits, now say this is different. Summers claims that the American Rescue Plan Act passed in 2021 helped cause the current price increases. Furman has supported the Build Back Better Act on the grounds that it would be largely paid for and not increase the deficit, but nonetheless also says that “90 percent of inflation is the result of excess demand driven by fiscal and monetary policy.”
The current inflation directly threatens the well-being of most Americans; makes it even more likely that the Republicans could re-take both chambers of Congress in November; and therefore could cause the further effects of a Republican takeover. But what can be done about it? Consider the concept of “excess demand.” Prices should rise when demand grows more quickly than supply. But does that mean that, if supply shrinks due to supply chain problems, demand therefore should be constricted? So, if tankers can’t get in or out of ports, we need to reduce wages or increase unemployment to reduce demand to match? If fossil fuel prices increase due to supply shocks, even if those shocks are partly due to government policy (such as boycotting Russia), does that mean policy-makers should induce a recession so as to control inflation? That could be done by either fiscal or monetary policy, both of which contributed to the recessions of 1974 and 1982. Neither was good for the party that held the presidency. Each created a lot of misery.
As happens so often, we’re back to Lenin: What Is to be done? Hopefully with better answers. It’s great to welcome, as a guide to the problem, Mark Sniderman. In addition to his long career with the Cleveland Fed, he also served as senior economist for economic policy analysis for the U.S. Senate Budget Committee, while on leave from the Fed. He can bring us deep understanding of the varying views of fiscal and monetary policy, and how the economy works beyond those factors. Join us to get a sense of the perspective from which some of our lucky students benefit.
Signing In
The “Friday Lunch” has been convening each Friday that classes are in session during Fall and “Spring” semesters since 1989. Regrettably, after more than three decades meeting in person and eating lunch (or at least coffee and cookies) together, we had to take our gatherings online after the pandemic hit in 2020. I am hoping we can do some sort of dual-delivery, in-person and online combination, before this semester ends.
But not yet. For now we will still meet by Zoom. Our discussions begin at 12:30 p.m., the usual time. Even when we resume in-person meetings, we will set it up so people can participate by Zoom. Each week we will send out this newsletter with information about the topic. It will also include a link to register (for free) for the discussion. If you do not get the newsletter, you should also be able to get the information each Monday by checking http://fridaylunch.case.edu/. When you register, you will automatically receive from the Zoom system the link to join the meeting. Please note that we will open the meeting at Noon so people aren’t all signing on at once, but the speaker starts at 12:30.
This week’s link for registration is:
https://cwru.zoom.us/meeting/register/tJUtf-mprjsiHdx30J1wv8ji_nrCuqGe7kr0
After registering, you will receive a confirmation email containing information about joining the meeting.
Please e-mail padg@case.edu if you have questions about how the Zoom version of the Friday Lunch will work or any other suggestions. Or call at 216 368-2426 and we’ll try to get back to you. We are very pleased to be partnering this semester with the Siegal Lifelong Learning Program to share information about the discussions.
Best wishes for safety and security for you and yours,
Joe White
Luxenberg Family Professor of Public Policy and Director, Center for Policy Studies
About Our Guest
Mark Sniderman’s academic and professional interests are focused on macroeconomics and financial regulation, especially the roles played by central banks. He is currently studying the unconventional monetary policies being employed by central banks in the wake of the global financial crisis, as well as their newer responsibilities for promoting financial stability. Sniderman came to Case after a career with the Federal Reserve Bank of Cleveland, culminating in his position as Executive Vice President and Chief Policy Officer. In that role, Sniderman served as principal adviser to the Bank president for economic and financial policy issues. As a senior executive officer, Sniderman had responsibilities for leadership of the Bank’s economic research, public affairs, and community affairs departments; he also served on the Bank’s management committee. Sniderman chaired the Bank’s Senior Policy Committee and was a member of its Credit Risk Management Committee. During his Federal Reserve career, Sniderman attended more than 100 meetings of the Federal Open Market Committee, the Fed’s monetary policy body; and spoke frequently to public audiences about the economic conditions and monetary policy issues. Sniderman continues to speak on these topics to a variety of business and professional audiences.
Schedule of Friday Lunch Upcoming Topics and Speakers:
March 25: Covid-19 Through Covid-22: The More Things Change the More They Stay the Same? Wtih Mark Cameron, Ph.D., Associate Professor of Population and Quantitative Health Sciences.
April 1: The French Presidential Election. Wtih Patrick Chamorel, Ph.D., Senior Resident Scholar and Lecturer, Stanford in Washington, Stanford University.
April 8: Greening the Grid: The Energy Storage Challenge. With Robert F. Savinell, Ph.D, Distinguished University Professor and George S. Dively Professor of Chemical Engineering.
April 15: TBA
April 22: The Present and Future of Cryptocurrency. With Peter Zimmerman, Ph.D., Research Economist, Federal Reserve Bank of Cleveland. |
