Larry Summers got roasted on social media after he said higher unemployment will be necessary to tame inflation in the US economy during a TV broadcast from what looked like a tropical beach resort.
The former Treasury Secretary, now a Harvard University professor as well as a paid contributor to Bloomberg News, appeared on Bloomberg’s “Wall Street Week” wrap-up news show on Friday, appearing relaxed in a white button-down shirt while reclining in a chair.
Summers told Bloomberg TV that the Federal Reserve, which has become much more hawkish by sharply raising interest rates in an effort to cool inflation while attempting to avoid tipping the economy into a recession, “for whatever reason [has] come around to views quite close to mine.”
Summers said that slowing growth in wages was “encouraging” although he cautioned that it was too early to celebrate. Summers added he supported the Fed’s strategy of aggressive interest rate hikes.
“They think inflation is the primary concern,” Summers said. “They explicitly recognize that there’s going to need to be increases in unemployment to contain inflation.”
In the background, a soft breeze rippled through rows of palm trees that dotted the shoreline of a beachfront area.
One Twitter user remarked: “if Larry Summers reclining in a tropical paradise telling the peasants ‘there’s going to need to be increases in unemployment to contain inflation’ doesn’t kick your weekend off right, i donno what will.”
Another Twitter user wrote: “It is great to support unemployment while sitting in exotic seasides mr Summers.”
A Bloomberg News spokesperson told The Post that Summers, who films a weekly segment for the financial news network, was on vacation with his family in Jamaica. Due to a last minute technical issue, the shoot had to move from indoors to outdoors, the spokesperson told The Post.
“We regret the choice of shot,” the spokesperson added.
Summers was asked to appear on the air on Friday to discuss the federal government’s latest jobs report, which found that 223,000 jobs were added to payrolls nationwide in December. The report also found that wage growth also eased somewhat.
The unemployment rate fell to 3.5% — the same level of unemployment that was seen before the onset of the coronavirus pandemic in the spring of 2020. The rate of unemployment is at a decades-high low.
Wall Street reacted positively to the news. The Dow Jones Industrial Average and the S&P 500 both soared by more than 2%.
“Look, these were good numbers,” Summers, who has repeatedly stated his view that higher unemployment was necessary to bring down record levels of inflation, told Bloomberg TV host David Westin when asked about the report.
“But I think the judgment that soft landings are the triumph of hope over experience continues to be the right best guess,” he said. “I’m not sure that continued strength points to a softer landing, rather than pointing to even a harder landing when things re-equilibrate.”
Ryan Grim, a journalist at The Intercept news site, also took issue with Summers.
“Aside from reclining on a beach and calling for more people to be fired — the other thing about this clip is Summers was demonstrably wrong about his inflation argument,” Grim tweeted.
“He said it would take years of high unemployment to tame and it’s already way down and unemployment is 3.5%.”
The consumer price index rose 7.1% in November — the slowest pace in a year that has seen inflation consistently exceed levels not witnessed in some four decades. December inflation data is due to be released by the federal government later this week.
Twitter commentator David Adler opined: “Larry Summers reclining on a tropical island and instructing the proles that ‘there’s going to need to be increases in unemployment to contain inflation’.”
The Post has sought comment from Summers.