PODCAST: "Hexapodia" is þe Key Insight! XXXVII: A Meta-Podcast on the Ezra Klein Show, Larry Summers Edition; or, The Inflation Outlook Again

Key Insights:* Not so much key insights, as key questions: (a) What are the teams? (b) 1920, 1948, 1951, 1974, or 1980? (c) Are there any true members of Team Transitory left? (d) Who is on Team The-Fed-Has-Got-This? (e) Who is on Team Hit-the-Economy-on-the-Head-with-a-Brick? (f) What inflation rate do we want to support economic reopening? (g) What inflation rate do we want to support the sectoral rebalancing—towards goods production, & towards the deliverator economy? (h) How would expected inflation get embedded in the labor market without strong unions and multi-year contracts? (i) How would expected inflation get embedded in the labor market without it first showing up in out-year bond market breakevens?* With Putin’s invasion-of-Ukraine supply shock, Summers’s position looks a lot stronger* Near the zero-lower-bound, there is a high option value to waiting to raise* That optionality still seems to us, for the moment, to be the major consideration* Thus it is too early to hit the economy on the head with a brick—even the small 5%-interest-rates brick* But it is not too early for Jay Powell to furrow his brow and say that the Fed is considering Larry Summers’s arguments very carefully.* Noah Smith finds that he is much more in accord with Larry Summers than he thought he would be.* Larry and Ezra like Brad’s forthcoming Slouching Towards Utopia* Elon Musk should take over Twitter* Hexapodia!Charts:References:* J. Bradford DeLong (2022): Slouching Towards Utopia: An Economic History of the 20th Century (New York: Basic Books, 978-0465019595) <https://www.amazon.com/Economic-History-Twentieth-Century/dp/0465019595/ref=sr_1_1?crid=3U3XCUXOZ37HW>* J. Bradford DeLong: America’s Macroeconomic Outlook * Ezra Klein & Larry Summers: I Keep Hoping Larry Summers Is Wrong: What If He Isn’t?: The Ezra Klein Show <https://www.nytimes.com/column/ezra-klein-podcast>* Paul Krugman: High Inflation in the United States: Newsletter 2022-03-29 <https://messaging-custom-newsletters.nytimes.com/template/oakv2?CCPAOptOut=true&emc=edit_pk_20220329&instance_id=57038&nl=paul-krugman>* John Scalzi: The Kaiju Preservation Society <https://www.amazon.com/Kaiju-Preservation-Society-John-Scalzi-ebook/dp/B0927B1P8L>* Noah Smith: When Will the Fed Drop the Hammer? * Neal Stephenson: Snow Crash <https://www.amazon.com/Snow-Crash-Novel-Neal-Stephenson-ebook/dp/B000FBJCJE>+, of course:* Vernor Vinge: A Fire Upon the Deep <https://archive.org/details/fireupondeep00ving_0/mode/1up> Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe