One of the consequences of 40 years of low inflation is that everybody who'd

warned about inflation had turned out to be wrong. New administrations often have

one big policy debate that defined their first year. Bill Clinton and deficit

reduction, George W. Bush and terrorism, Barack Obama and the stimulus. For Joe

Biden, it was about inflation and he got it wrong. Policy makers have a tendency

to want to make new mistakes rather than to want to make old mistakes. Larry

Summers was president of Harvard, Bill Clinton's treasury secretary and Barack

Obama's top economic advisor. But nowadays he's best known as the democratic

policy maker outside the government who got the biggest question of the last two

years right when all of his colleagues inside the government got it wrong. I

hadn't seen a moment before where I was led to think we were having hugely

dangerous overheating. In February 2021, he wrote not bad in the Washington

Post making two big points. One, the Biden stimulus package was too big and could

overheat the economy. And two, if inflation did take root, it could make it

politically impossible to pass the long-term progressive priorities in the

president's bill back better plan, which he supported. White House aides scoffed

at his arguments, but he was right. Inflation is running higher than it's been

in decades. And both the White House and the Fed have declared that addressing

inflation is their single highest priority. Last week, when Joe Manchin ended

discussions on climate and taxes, neutering even Biden's scaled-back, billed

back better plan, he blamed it on inflation. In fairness, it wasn't just Biden and

his White House team who got it wrong. Jerome Powell, the Fed chairman and Janet

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