During this time of relatively tight labor market conditions and soaring prices (or “inflation” as it’s simplistically referred to), something remarkable is happening. Pundits, executives, and even a few politicians are openly saying that we need to make more people unemployed — that a lack of joblessness is a problem that must be rectified.

Lawrence Summers, the former chief economist of the World Bank who has served in roles in the Clinton and Obama administrations and has the ear of Biden’s White House, made this point on January 6. Interviewed against a background of what appears to be a luxurious tropical setting, he praises the Federal Reserve for drawing closer to his viewpoint. “They explicitly recognize that there’s going to need to be increases in unemployment to contain inflation,” he says, referring to the Federal Reserve’s efforts to spur a recession and increase unemployment by raising interest rates.

“They explicitly recognize that there's going to need to be increases in unemployment to contain inflation,” says @LHSummers when discussing the Federal Reserve and the US labor market.

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 — Bloomberg TV (@BloombergTV) January 6, 2023