On Friday’s episode of “America’s Newsroom” on Fox News, former Obama administration Council of Economic Advisers Chair Jason Furman was asked about a recent tweet he sent out calling inflation and supply chain issues “high class problems.”
Most of the economic problems we're facing (inflation, supply chains, etc.) are high class problems. We wouldn't have had them if the unemployment rate was still 10 percent. We would instead have had a much worse problem.
— Jason Furman (@jasonfurman) October 14, 2021
“Jason, you started a prairie fire yesterday,” anchor Bill Hemmer said. “To paraphrase Jay Leno, what the hell were you thinking?”
Furman replied by suggesting that the inflation we’re experiencing can be seen as a “good thing,” echoing something White House Press Secretary Jen Psaki said on Friday.
“You know, I’ll tell you what I think’s going on in the economy. You need to keep two things in your head at once,” Furman stated. “One is, inflation is real. Inflation is creating a problem for families, and we should do something about it. Number two, the reason we have this inflation is actually a good reason — that the unemployment rate has come down, that families got money, and people are buying more things than ever before. The problem isn’t that our ports stopped working, it’s that people are buying so much stuff, that so much is trying to come through our ports right now.”
After a back-and-forth, Hemmer again brought up the tweet. “My guess would be is that if you were paying two bucks a gallon for gasoline a year ago, and now it’s over four bucks, that’s not a high class problem for anyone. Middle-class America is paying for that,” Hemmer said.
Furman again pivoted, saying that people are “spending more in restaurants; they’re spending more on sporting goods; they’re spending more on nights out; they’re spending more on travel. That’s all a really good thing.”
But Hemmer wouldn’t let it go, pressing once more: “But you’re standing by this whole ‘high class problem’ thing? You haven’t backed away from that in this conversation.”
“…I’ll tell you what I think,” Furman concluded. “There’s a good side to what’s going on — people are spending more than they’ve ever spent before — and there’s a bad side to what’s going on. When everyone spends more than they’ve ever spent before, that drives prices up.”
Full transcript below:
HEMMER: Jason, you started a prairie fire yesterday. To paraphrase Jay Leno, what the hell were you thinking
FURMAN: You know, I’ll tell you what I think’s going on in the economy. You need to keep two things in your head at once. One is, inflation is real. Inflation is creating a problem for families, and we should do something about it. Number two, the reason we have this inflation is actually a good reason — that the unemployment rate has come down, that families got money, and people are buying more things than ever before. The problem isn’t that our ports stopped working, it’s that people are buying so much stuff, that so much is trying to come through our ports right now. We have record volumes, you know, [that] both has a good side, a bad side, you need to keep both [of] those in your head.
HEMMER: A lot of people would say you saw it coming last February, you did very little about it. Why would the chief of staff retweet that?
FURMAN: You should have the chief of staff on to ask him that question.
HEMMER: We put in a lot of requests for that.
FURMAN: The reason that we’re having this problem is that people are buying a lot. You know, I was in the White House 12 years ago when we were suffering a really slow recovery. We didn’t have these types of problems then. In fact, inflation was falling in 2009, but we weren’t celebrating that. It was falling because we had a high unemployment rate. So, big picture U.S. economy is in much better shape than almost any economy in the world. But yes, the U.S. economy has an inflation problem, and we need to deal with that.
HEMMER: RNC really fired back on you. Here’s one tweet one, one statement rather: “Struggling to pay food, fuel, and housing because of rising prices is not a ‘high class problem.’ Biden is making everyone worse off, but instead of stopping the damage, their strategy is to try to gaslight Americans.”
You said this was your social judgment; what you’re explaining now is your economic thinking behind it. My guess would be is that if you were paying two bucks a gallon for gasoline a year ago, and now it’s over four bucks, that’s not a high class problem for anyone. Middle-class America is paying for that.
FURMAN: Americans are traveling more than they were a year ago. That’s a good thing. Americans are spending more; they’re spending more in restaurants; they’re spending more on sporting goods; they’re spending more on nights out; they’re spending more on travel. That’s all a really good thing. That’s what’s most important. In part that’s happening because every person in this country got a $2,000 check, or almost every person in this country, got a $2,000 check earlier this year. That was due to a combination, the first legislation was signed by President Trump, the second legislation that was even bigger was signed by President Biden. That’s had positive sides; that’s had negative sides…
HEMMER: And we have watched that play out. … You were quoted as saying that with the overall economy, it’s not an off-the-shelf playbook for this kind of situation. You said, I think they’re trying to figure it out as they go. I don’t think you’re wrong about that. But with jobs being weak over the past two months, with inflation, with wages coming out of the pandemic, how would anyone know what the state of the economy is below the surface?
FURMAN: Oh, look, it’s a very uncertain time in the economy. None of us have ever been through the combination of coming out of a global pandemic, with this type of policy response. I try to take in a wide range of data. Certainly, the last two months haven’t been as good as the months before that. But we’re continuing to make progress. We’re just not making progress as fast as the progress we were making before.
HEMMER: But you’re standing by this whole “high-class problem” thing? You haven’t backed away from that in this conversation.
FURMAN: I don’t, you know, I’ll tell you what I think. There’s a good side to what’s going on, people are spending more than they’ve ever spent before, and there’s a bad side to what’s going on. When everyone spends more than they’ve ever spent before, that drives prices up.
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