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Fed's Jay Powell says about his interest rate increases of five percentage points at consecutive meetings since March 2022- "We've seen the beginnings of disinflation without any real costs in the labor market. That is really a good thing." Greg Ip of the WSJ looks at the 9 year period of most growth cycles in the US economy since 1980 and says a soft landing could be followed by growth till about 2030. Business investment led to 2.4% growth in the second quarter 2023. More investment is in the pipeline under the Biden economic plan. As inflation is going down to about 3% from 9% at its peak in 2022 the US is set for economic growth that would help it grow in a way that would enable America to meet the challenges of today in climate change, worker incomes and the cost of living, and in need to rebuild the nation's infrastructure in the way it was done in the years after 1945 under Truman and Eisenhower.

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Ed Finn, president of Barron's for 19 years from 1998 has observed the economy for decades and comes to the conclusion that the 2007-2008 banking crisis from Reagan style deregulation was the one principal factor the US economy and the people suffered from a lost decade that was extended to 15 years by the pandemic. This has ended under president Biden says Finn, with he says about 10% growth in S&P 500 every year since 2020 and expects growth at that rate for another 4 years under president Biden. What this says about ultra low interest rates is that it was bad for America and a result of the need for tackling the 2009 financial crisis. Interest rates need to be at the moderate level of about 4-5%, the level today, where savers are rewarded, retirees are rewarded, bondholders are rewarded, and excessive risk taking is penalized, says Finn. Moderate interest rates help mortgage holders and new companies start businesses. In short says Finn- this is the way a economy should be run. We were sold the idea of ultra low interest rates because no one wanted to talk about the bad effects of Reagan style deregulation that inevitably lead to lack of the financial oversight of regulatory authorites. Financial oversight by regulatory authorites needed for modern economies to run, whether this is the US, India, China, or any large European economy, it is an essential condition for stable long term growth that serves the needs of the people of every major economy in the world. The idea must be cast aside that economic policy must be determined by the swings in sentiment  every few decades in one direction to too little government from to too much government or reverse, and be determined by essential truths of how a sound and good economy is run. As the US enters 2024 what Powell a Republican, and Biden a Democrat, and the bipartisan group of Senators in the US Congress are saying is that we get it, and are with single minded determination making it happen. ...

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A study by Blanchard and Bernanke shows energy prices and supply chain constraints were key factors in creating the surge in inflation that happened in 2022. The Ukraine war played apart in raising energy prices . How much effect did president Biden's $1.6 trillion American Rescue Plan have on inflation? Bernanke and Blanchard say not what critics had suggested. Once energy prices were brought under control through the president's policies to $75 energy prices played less of a role in inflation. Supply chain effects also eased throughout 2022. The persistent effect remained the mismatch between supply and demand that is called The Great Resignation that came as a response from teachers, nurses, hospitality sector workers with low minimum wage on which it was hard to make a living. President Biden's payments to these workers gave them enough room to make a definite choice that they would not take the risks during the pandemic and the stress and opted for shifting to other jobs. Employers struggled to fill vacancies and raised wages in response. To reduce inflation the Fed opted to raise rates to slow the demand for goods and services in the economy which has led to a moderating of inflation from the high of 7% in 2022 to falling below 5% by April 2023. Fed chairman Powell's aggressive attitude to inflation was based on not letting an inflationary psychology set in, that could damage the interests of workers and families who had already suffered from the pandemic's effects. This is where we are today as the economy adjusts to the fight against climate change, investments in renewable energy and infrastructure, and efforts to reduce the deficit by president Biden in a way that reduces the widening gaps and social divisions in society.   ...

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Much of the inflation reduction actions were taken by the US Federal Reserve as the central bank of the Nation and by president Biden in passing the Inflation Reduction Act and investing in growing the economy. All this may be jeopardized by the action of a Trump administration limiting the independence of the central bank. The support for crypto currency by Trump creates more risks to the economy. Additional risks are posed by the views expressed in Project 2025 on the US central bank. It is stated that the financial stability mandate be removed, that employment stability be removed and its regulatory role be effectively taken out. A commission to be appointed to look at alternatives to the central banking role of the US Fed. There are inflationary episodes and banking crises yet they stem from poor behaviour of banks as private players (2009 financial crisis) and price gouging by companies and firms and are not because of the central bank. There are also episodes of poor management  which reflected the culture of that period such as Libertarian culture under Greenspan. As in management in private industry firms good or poor managers make adifference. The institution created of the central bank around 1910 comes from the crises that happened in the period before that  and how it evolved into its postwar role. This includes the Great Depression when it did not have its regulatory, financial stability and employment role. Tampering with the basic structure that has evolved over 100 years of experience would cause lasting damage to the US economy and expose it to hidden risks. This would put a severe burden on the Nation after the loss of one million lives in the pandemic that just happened, the cost of living crisis, and the severe impact that decades of loss of local manufacturing have placed on communities across America- which both the US Federal Reserve under Jerome Powell and president Biden have fought so hard to tackle. ...

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Sperling shows how Biden's economic plan rescued America and set the stage for America becoming the leader in the G7 economies. Gene Sperling is adviser to president Biden, coordinator of the America Rescue Plan, and had 8 years as adviser in 2000 and 2011 after the financial crisis to previous presidents. Here he says the arguments made that the trillion dollars investment spending Biden and a bipartisan group of senators have supported with legislation in Congress were causing inflation have proved not to be true. Inflation caused by bottlenecks in the supply chain, the pandemic shifts, and the Ukraine war, has come down to 3.4% in Dec 2023. By investing in the US economy, in US manufacturing and US jobs, the US under Biden now has the best economy of the 7 advanced economies with higher growth and unemployment below 4% for 24 straight months, lower inflation apples to apples. Sperling says there were 4 lessons learned during his work with the White House. The first to avoid harm to workers whose lives get scarred by loss of jobs. This happened in 1982 and again in 2008 after the financial crisis. Unemployment took 6 years to recover after 2008. And he says the unemployment rate was 15% for younger workers. For the first time economists like Sperling and Treasury Secretary Yellen have grasped what workers feel and have gone through. Sperling cites the devastation to people's lives - the mental health, the divorce, the loss of earnings and depression. The new policy after 2020 resulted in the fastest drop in longterm unemployment ever with black and hispanic unemployment reaching record lows by 2023. A first ever national eviction prevention policy led to 20% less evictions than prepandemic. Second Sperling says 650,000 jobs were lost by state and local governments in the three years after 2008 financial crisis. State and local budget cuts and mass layoffs seriously hit the economy. This time in after 2020 1.2 million jobs were added with the money in the Rescue Plan and lost jobs recovered in one third the time it took in 2008. Third state and local governments need to deal with the harm coming from the downturn and after 2008 the cupboard was empty. Whereas after 2008 only 154 cities and counties got help to tackle commericial blight, effects on communities, foreclosure and long term joblessness in 2020 Biden was able to send direct funding to all 20,000 local governments and 15,000 school districts. This helped tackle learning loss, crime, and address mental health needs. What a difference it made. Lastly one needed to anticipate something unexpected to happen that flattened projections of recovery. In 2011 3.7% growth projected was flattened when Sperling was senior adviser, and this was flattened by Fukushima nuclear disaster, Arab Spring spike in oil prices, and debt default negotiations. This time there was cushion in the plan so that when covid variants and unexpected Ukraine war happened the rescue could withstand and deliver with resilience. Growth was 3.4% average for the first 3 years of Biden's term and unemployment went down from 8% to 4% for 24 months. Coming from someone who had seen mistakes happen and corrected them, who had served three presidents and the last Biden ,this is a story of how Sperling, Yellen, with the help of Powell at the Federal Reserve, and the bipartisan support put together by a US president in Congress , one who has served the country in the Senate more than any other recent Senator and led the nation with courage, patience and determination. ...

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Paul Krugman describes the situation of slowing inflation in America and the prospects for president Biden in 2024. In just a few months since the midterms inflation is receding. Shoppers are showing resistance to price increases in retail stores. The Fed under Jay Powell has taken a resolute stand against inflation slowing inflation in house sales and rental, in automobile pricing and other sectors of the US economy. New investments under the climate change bill passed in Congress and the CHIPS and Science Act, Inflation Reduction Bill, mean more factory openings and jobs in America. A milder winter in Europe is helping it tackle an energy shortage and bringing oil prices under control.