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00:00You've been outspoken on this program and elsewhere saying that you have some concern about the one point nine trillion dollar stimulus package that it might overheat the economy. We're now getting some economic data in from what you're seeing. Are you more concerned or less concerned than you were before. Probably a bit more concerned. The Atlanta Fed this morning said that it's now cast for first quarter. GDP is nine and a half percent growth at an annualized rate. That's higher than most other observers. I guess it's too high but it does say that there's likely to be substantial spending substantial growth in purchasing power. I think a lot of reasons for it. But bond yields have backed up considerably in the last several weeks. You've got a Treasury 10 year treasury in the one point three range. I think there's a growing sense of concern. Well let me pick up on that because Hang Seng thinks uphill may have not fully understood as you say. You haven't said that we don't need a lot of support for the economy and even don't need to spend a lot of money. In fact you've said really good has given interest rates. It makes sense but it's a question of what the money is going for. Is it for consumer spending or is it for investing in the economy. And let's connect that with jobs. Because Jay Polish you know he's been very concerned about jobs has even talked about federal jobs program. What do we need to get jobs. Because we're still almost a 10 million people unemployed today who had jobs before the pandemic. So you raise a couple of very important issues there. David I'd rather see us investing money that expands the economy's capacity than simply making transfer payments. What's remarkable is that the advocates of this program like Paul Krugman when you put to them that it may overheat the economy they say no no it won't. People will save the money and people will use it to pay down debts. And I can't imagine a lower priority use federal resources than improving consumers balance sheets rather than repairing the country's infrastructure making tests available for people to be vaccinated starting investments in a green economy doing things for pre child education. So the defense of the program that claims that what it's going to do is begin a process of consumer balance sheet repair at a moment when by the way consumer credit is extremely strong. I just don't relate to that as a central concern as well. There are plenty of tasks that are vitally important that we can make public investments in. But we give up all of that if we put the focus on transfer payments. We also don't help employment any when we pay people more to not work than they were making to work. And what we are going to legislate is an unemployment insurance program that for the substantial majority of its recipients is getting give them significantly more money when they don't have to commute to work when they have all the time to take care of their kids to do what they need to do because they are not working. They are going to get significantly more take home pay than they did for working. And that's just not a pro employment policy. Larry one of things that struck me this week was the CDC coming out with numbers showing that the life expectancy of the average American has gone down by a full year in 2020 and disproportionately according to race and ethnicity. What do you make of that. Is there a larger story there or is it just the one off of the pandemic. Look the life expectancy is formed from each specific death rates at each age. And they obviously went up this year because of comas and they honestly went up more for people who are more disadvantaged in groups that were more disadvantaged. So this year's statistic is driven by clothing. You know I find it ironic and the fact that the progressive wing of the Democratic Party people like Senator Warren and Senator Sanders are all excited to give fifty thousand dollars or more on debt relief to young people who are working at Wall Street investment banks making six digit sums of money. Rather than focusing on the needs of the high school dropouts the needs of those who are graduating from high school but not going on to college and need specific training. And so I hope that progressives will disconnect from the elite concerns of Ivy League college graduates of those with graduate degrees and focus on the people they should be representing the people who have been left behind. So let's wrap up the way care with a quick round of summer says. Let's start with the Texas energy crisis. We've all been watching it. And really it's been awful what's happened to those people down there. Do you think that that crisis will speed up or slow down President Biden's quest for green energy. Not much either way. Maybe it will encourage more renewable investment. On the other hand solar power wouldn't have been working that well in Texas this month. When do you think the Fed will raise interest rates sooner than they think and sooner than the market thinks. I'd expect rate hikes to be underway by the end. Well under way by the end of 2022. Well it has been forced essentially by inflation. I think a combination of inflation and perhaps and overheating economy and fiscal policy on fire particularly if we actually build back better and look returning to more normal interest rates could be OK. But it's going to be a very challenging transition. And I must say doesn't seem to me from the Fed's comments which are all on the side of resisting deflation all on the side of promoting social equality. I think the Fed is not recognizing the era that they're headed into where they're going to face the kinds of challenges that the Fed faced in the 1970s. The Fed failed in the 1970s. And I think if the Fed wants to not fail they're going to have to start recognizing the reality of those challenges. And that's going to mean a significant change in their tone. And finally we've talked more than once about the great and growing issue of income inequality in this country. Give us a projection one year from today. Will it be better or worse than it is right now. Probably better because of all the transfers that are being made to those with lower incomes. Things like the unemployment insurance payments that are so generous. But whether it will be sustainably better whether a foundation for real progress will have been laid. I think that's less clear.

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"Pathetic" That Progressives Call for $50k in Student Debt Relief: Summers

Former U.S. Treasury Secretary Lawrence H. Summers, a Wall Street Week contributor, says that progressive Democrats should focus on helping those who have been left behind than calling for $50,000 in student debt relief, which would benefit young Wall Street workers. He joins David Westin on "Bloomberg Wall Street Week." (Source: Bloomberg)

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