On Friday’s “PBS NewsHour,” New York Times columnist David Brooks stated that we are “probably overheating” the economy and causing inflation, but he has “high tolerance for inflation in this kind of economy. Because I think we need it as a society to heal.”
Brooks said, “I want a white-hot economy that will raise wages at the bottom, which is happening, that will bring people back into the labor force, which is happening, which is spreading wealth around the country, not concentrating it in a few cities, which is happening. The cost of that is that, since we can’t really fine-tune an economy, we’re probably overheating. And we’re getting inflation. And the question — the crucial question becomes, what kind of inflation? Is it post-COVID inflation, we’ve got a lot of supply chain problems and it’ll get ironed out in a year, or is it 1970s inflation, which builds on itself? And so, I have high tolerance for inflation in this kind of economy. Because I think we need it as a society to heal. But if it turns out to be accelerating 1970s inflation, that becomes its own monster.”
Follow Ian Hanchett on Twitter @IanHanchett