Inflation cripples America's small businesses as consumer prices rise
Virginia congressional candidate Derrick Anderson joined 'Fox & Friends Weekend' to discuss why he is running for Congress and the impact inflation has on America's small businesses.
The New York Times published a new episode of "The Ezra Klein Show" on Friday featuring an interview with Rana Foroohar, CNN’s global economic analyst and a Financial Times columnist. In the interview, Foroohar called for a ‘kinder’ and more environmentally friendly economy, and said inflation must occur in the short term to achieve those goals. Foroohar also heavily criticized the Federal Reserve for creating what she describes as the ‘everything bubble’ in financial markets.
"What’s the cost of something if you actually have a real price on carbon, and then you have to tally in how much it costs to tote it over tens of thousands of miles from the South China Seas? What’s the cost if you have proper environmental and labor standards?" Foroohar asked. "This is the conversation happening right now. And once you start pricing all those costs in, and you start really thinking of the economy in a different way, then yeah, it is certainly is inflationary."
She noted how Democrats don't want to admit that inflation might be necessary to transform the economy with the midterms fast approaching.
U.S. President Joe Biden announces the nomination of Federal Reserve Chair Jerome Powell for a second four-year term, in the Eisenhower Executive Office Building’s South Court Auditorium at the White House in Washington, U.S., November 22, 2021. (REUTERS/Kevin Lamarque)
"And this is something that I think, unfortunately, no politician, particularly the Democrats right now in advance of a midterm or a presidential want to land on, which is some of the transitions to a kinder, gentler, I believe more stable, and ultimately more resilient economy, are going to be inflationary in the short to medium term."
Foroohar called on the U.S. and Europe to "put a price on carbon."
"There’s of course, an amazing opportunity right now for the U.S. and Europe to come together on climate change standards, and maybe even put a price on carbon, which would just immediately knock out Chinese mercantilism because it would actually help us to tally the cost of cheap labor, child labor, long supply chains, that take up too much energy to tote cheap stuff to us to put in Walmart or sell on Amazon, all of these things are happening."
She added, "We also have a new generation of consumers, of citizens, of workers that are younger, and they just really care about the environment. And they care about food, and they care about where they don’t want fast fashion. They understand the cost of these things."
The CNN analyst predicted deglobalization will continue as "security hawks on the right" want "more secure, resilient, independent supply chains" and "some green New Dealers" want to "support labor in America and have jobs."
"And so I just see so many tailwinds and I think ultimately, we’re going to be in for a lot of turmoil, but I think they’re going to take us to a better place. Because as we’ve talked about for the last hour plus, the old system was untenable," she said.
YELLEN SAYS ONLY WAY TO FIX ENERGY CRISIS IS TO GO GREEN
Pedestrians pass the New York Stock Exchange, May 5, 2022, in the Manhattan borough of New York. ((AP Photo/John Minchillo, File))
Foroohar was also critical of the role the Federal Reserve has played in contributing to inflation and what she describes as an "everything bubble" in financial markets. The Fed has been "making things that have no value look like they have a lot of value until they don’t," Foroohar said.
"Way before COVID, way before the financial crisis, the price of housing, education, health care, these things were all rising faster than anybody’s wages. So that’s one reason why a lot of us haven’t been feeling wealthier despite all this money sloshing in the economy," she said. "The Fed sort of manipulates the economy, keeps rates low, keeps borrowing costs low. That enables a lot of creation of debt. It enables 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 sort of get inflated in price because investors of all kinds are looking for returns."
Foroohar compared the ballooning of crypto currencies’ value and its recent crash to gold during the Weimar Republic.
Graphic showing inflationary measurements (istock)
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"But if you look at how gold prices were rising in the Weimar Republic and compare it to crypto until quite recently, very similar, boom-bust and we can get into why that might be," she said.
She criticized elected lawmakers and the Fed for manipulating the market that has benefited Wall Street more than main street.
Inflation is at a 40-year-high and the stock market entered bear territory on Friday. Many economists predict a recession in the near future.