ah, how long has m, c. k in doha, the top stories on agile at the u. s. has, again warned, russia could launch an attack against ukraine at any time. president biden will convene a national security meeting on sunday to discuss the crisis. ukraine says russia back separatists have open fire on more than 30 settlements in the east. he f and the separate his forces have accused each other of provocative actions. european monitoring agency, our c says it's recorded almost 2000 cease fire violations on saturday. charles strafford has been speaking to people near the front line in east in ukraine. there are hundreds of villages like these along the front line on the ukrainian controls

side on what's increasingly worrying the amount of civilians that are still here. as we understand this, evacuation continues in the separatist control areas or is increasingly worrying. also is that in villages like these, there are also a lot of ukrainian military. and we've been speaking to some of the civilians here about their fears were soldiers staying and what were once private homes military vehicles pulse by the italian runs, the village shop. she has little hope, a peaceful solution to the crisis can be found. mother was in the military been his 8 years, but we all feel like target. and of course the military in the village makes the risk greater. i'm afraid to even think about an evacuation. if i would have to leave my home suddenly with a bag of documents who's not attending the security conference in munich suggests

he doesn't want a peaceful solution. most of the families of those buried in the graveyard have left the village. people tell us the shelling in the area and the last couple of days has been the worst in years yellow. it's very frightening. i felt the fear rising up through me when the shelling of started. we've been here since the beginning of the war. but where can we go and who can help us? we heard about the evacuation on the other side and it's not a good sign. there is no good that will come out of this is mainly the elderly left here. now they say the shelling has been worse at night. people in villages like this one close to the front line are afraid they are aware of what the russian back separatists on their side of the front line of now calling a mass evacuation of civilians. and they are asking, what about our safety to shawn stripe and al jazeera, eastern ukraine? russia says the president, let me put in,

has started overseas strategic nuclear exercises. comment says it's successfully launched hypersonic missiles during the drills shows in moscow to deny the war games will further inflame tension. ukrainian president volunteer. ms. lansky has vowed not to respond to russian provocations. it's all delicate at the munich security conference. the war with russia would have global consequences. zelinski says his country is committed to peace, but the global security infrastructure is failing ukraine. canadian police say they made progress in clearing protesters opposing pandemic restrictions from streets in the capital also demonstrate to started to leave off the officers moved on those camping outside parliament. hundreds of people have been celebrating on the streets of molly, after the ruling military gentle ordered french troops out of the country. france had already analysis withdrawal after

a 9 year mission fighting against groups linked to al qaeda. and i saw a french modeling agent linked to the late sex offender and finance. the jeffrey epstein has been found dead in paris prison. one of the scenes main accuses virginia you fray, alleges john luke were now procured women for sex with epstein and others were now had denied any wrong doing. 12 truck drivers remain missing as emergency services battle to control a fire on a greek ferry. the blaze broke out on friday as the vessel headed to italy with 288 people on board. those are the headlines were back in half an hour right now it's the bottom line. i me hi, i'm steve clements and i have some questions. how did americans just get sucker

punched with the highest rate of inflation in 40 years when no one was looking? and if your cup of coffee now cost double what it used to? what are the consequences for joe biden? let's get to the bottom line. ah, just about every one in america can feel the pinch, the cost of everything is rising, whether it's essentially like food or gas and rent or other things like travel and services. in one year alone, the consumer price index attract inflation has gone up by $7.00 and a half percent. that's the biggest hike in 40 years while president joe biden has him cause the rising cost of living in america. he sure going to get blamed for it last year, his administration call that transitory but it turns out inflation has some legs and it's going to be around with us for a while. there is no way around the fact that inflation got punches the quality of life for many americans and it breeds discontent. so what should he be doing? what are the forces behind the surgeon prices, and what can be done about things getting more expensive all the time,

or is this just a new normal? today we're talking with jason firm and who was the top economic advisor to the white house under president brock. obama serving as the chairman of the council can amik advisors. he now teaches economic policy at harvard university, jason firm, and it's great to be with you today. i know that you understand inflation and it's writers better than anyone. but you know, i mean it's kind of put up some numbers here that we've just gotten from the u. s. department of labor, food up 7 and a half percent peanut butter is actually something joe mansion put out on his sweeter a 15 and a half percent. gas, 40 percent electricity, 10.7 percent cars, 40 percent. so we have a surge in a lot of these numbers in basic staples that, that people are interacting with. now, wealthy people can get by, but a lot of other people are going to be, you know, in, you know, struggling with all of us. can you give our readers and understanding of what happened between last year and this year that has sent this, this, these prices surging to levels that we're seeing? yes, steve, we're, we're really seeing inflation. at 1st. people thought it was

a few specific things. oh, this is what's happening and cars, you know, this is what's happening with the price of something else. but as 2021 went on, those price increases broadened out and started as you just showed in that chart affecting everything. i'm an economist, so for me everything is supply and demand. it's not supply or demand. in this case the supply can't fully react. in part because of cov, it we can't make as much as we'd like. and demand is sky high because we gave households a lot of money and kept interest rates very low. and the collision of those 2 has meant this once in a generation price increase. what with president trump before the bide ministration came in. we already had a lot of injection of money. we also had a tax bill in 2017 that basically put a lot of money out there. so the, because the, the, you know that there's been a lot of money switching around in the u. s. economy, have we overstimulated the economy and put ourselves in a bad position?

no, i think we did too much. i'm glad we did a lot. so don't get that wrong. the u. s. economy has recovered further and faster than most other major economies in the world. we've recovered much faster than we have in previous crises. the unemployment rate is relatively low right now. so big picture. i'm happy, fine tune that big picture. go back in time. you know, give people somewhat smaller checks, make the size of the whole thing a bit smaller probably would have done, you know, even better than we did. had we done that. you know, president biden gets a little irritable when somebody talks about inflation around him. he did this with a fox news reporter peter do see he also did with an n b c journalist, very famous lester hole, where he basically go lesser such a wise guy on this. but isn't not in the purview of the president to make policy choices that could affect the drivers of inflation. or is this just sort of out of his, you know, ability to operate because, you know, we,

it's hard not to pay attention to present biden's mood going sour on this. yeah, i mean, 1st of all, i do think this is a legitimate concern that the american people have. i don't think this problem was invented by the media. i think if anything, the media are reflecting something that families across the country thing, it's tricky for the president because it actually, he doesn't have a lot of tools to bring down inflation. the agency that is the primary agency for dealing with inflation is the federal reserve. the president has been exactly right on them. he's treated them as independent and he's appointed excellent people, nominated excellent people to the fed. they need to be confirmed by the senate. so the main thing he should be doing on inflation is putting people on the fed and getting out of the way. and for the most part, that's what he's done. but of course, when you're president and something goes wrong, you're always going to get more blame than you deserve. now, some years ago i interviewed former federal reserve chairman paul volcker,

i think you were actually there in the same conference. and at this meeting, i asked former chairman bulk or what it was like to try and team inflation, where the prime rate went up to $21.00 and a half percent. and you had this period of time afterward that led to a big recession in 1980 to 82. and we got 10 percent unemployment. is that a pathway that we're going to see coming out of this? that rates has to go up? that you're going to have to have a wall on took to bring demand down, because supply is so limited. i mean, it is that one of the policy responses that you think is serious on the table because that would also be a shocker for a lot of people in this economy. yeah, the goal of the fed is and should be to avoid exactly that problem. and that's part of why you want the fed to do more up front, so they don't have to do a huge amount later on. i mean, some of this is phrased as the hawks want this and the doves want that i think that's the wrong way to think about it. any one like myself who was calling on the

fed to move earlier and to raise rates earlier, was basically saying if you don't do this, you might be in that same position as volker when he had to tackle the inflation. it had been building up for 15 years. now it's more like 9 months. so i, i think this is something we can still deal with it. it won't be anything like milker. but, you know, if you take that attitude and use as an excuse to do nothing, that's when it'll become like the volker situation. you know, here in washington, we're already seeing people trying to scramble to come up with short term fixes. and so one of the items in the news right now is to reduce or get rid of, you know, for some holiday of a gas tax. i've seen you comment on this a bit. you know, i've seen others like senator joe mansion say we're, you know, we're already gonna, you know, mess up the trust funds in the highway trust one, why mess them up more? is there a danger of running to quick fixes that end up undermining and hurting us in ways

of over responding to inflation right now? yeah, i mean, gas prices are just the worst issue economically and politically because people hate it when gas prices go up. they blame the president and of all the prices in the economy. the one the president probably has the least influence over his gas prices. they're set in a global market, and it's just not much you can do. i'm, you always are trying to do things, release oil from the strategic petroleum reserve, for example, you know, gas tax holidays, another one of those. maybe it would lower prices by $0.12, maybe a month later, prices would have made up for all of that. and i'll be up even more so i think it's something that sounds good when you propose it. he actually did, it probably wouldn't be received that well. i hope they don't do it. but, but i get that they're under tremendous political pressure through no fault to their own for the global oil price. you know, i know that these problems are very complex and i read you and i know that i'm and

ask a simple minded question though in this because it's something that's been lurking in that, you know, this may be a naive one on my part. but after watching a lot of the hostility towards immigration in the last administration and seeing, you know, the american population growth at its lowest level, you know, in a, you know, very, you know, in a number of generations. you know, you kind of wonder on one hand is, are a combination of, of folks not coming into america through immigration, however, they may come into the nation. and also looking at some of the trade brinkmann ship that we've had were america's come out of the, you know, trans pacific partnership deal that we have had to bring some ship with china. so maybe some of those goods that were coming in that were perhaps undervalued or, or of a lease valued more cheaply than you could make an american economy. is the combination of those factors having in any impact on the costs we're seeing in the, in the surgeon prices and inflation in the united states. yeah, steve, i think both immigration and trade are 2 things that we should be more open about.

i would have thought that regardless of what the inflation rate was, i think that addressing both of them would help to some degree with the inflation as well. i look at the president and he's done a wide range of policies on the supply side related to ports and micro chips and all sorts of things. pretty much though, to levers he hasn't pulled that. i think he could are trade in immigration. i don't think they'd make a huge quantitative difference on inflation, but they'd help and they're worth doing along with everything else is doing it. trade is one of the areas why haven't heard much the by administration. just as you said in just this week, the president just released a new strategy for the indo pacific. and trade is mentioned in there a few times. but when you kind of look at that and compare it to what the obama administration was doing, of the transfer civic partnership, you ask yourself, okay, how is america going to lead more or benefit more than it did during that highly

complex negotiated deal? is there something missing in the biden economic plan in terms of global economic engagement that we need to see if he's really going to begin addressing? now, not only the economic health of this country, but also to lead in the rest of the world. yes, if i'm always for more free trade not less. the truth is it's not a huge difference for the u. s. economy right now g p. p would have been a very good thing. i was for it. it would have done a lot more for growth at the united states, joined it for vietnam and malaysia than it would for the united states. be a small positive for us, but only a small one because we're. busy already pretty open to trade. so i think at this stage when you look at something like t p p, i know i, i'd, i'd ask a bunch of geopolitical questions that you're far better equipped to answer than i would, you know, what does it do for the united states because of a china for other countries, these of each i and i think there probably is a strong geopolitical argument for it and as a decent economic argument,

but not so huge that you know, i find myself pulling my hair out of no one listens to me about it. what do you think about the other side of this? because when president biden has been asked about inflation, his natural, a deflection is to semiconductors. and so we've heard about an intel plant to put in a $20000000000.00 production facility into ohio. that's going to take a long time and you know, you can't, you know, invent that overnight. but he's talking about semiconductors as being a driver of, of the price of cars. but it just seems simple to me. can you tell us where the president is right with that explanation and what the limits of explanation are yet semiconductors, i'm just this phenomenal shortage that's emerged. it spreads itself throughout the economy, especially in cars. cars are disproportionately contributed to inflation, so that presents absolutely right about that. the main solution to it though is the law of supply and demand. the microchips go up in price. more businesses come in to

make them. and i don't know, maybe the policy response is helping speed that a little bit, but i can't imagine it's helping speed that much. so you know, sort of yet another case where yes, that's the problem. not every problem has a solution in the case of semiconductors. the solution is mostly patience and letting the market work its magic well, you know, one of the things about the market i've been trying to, i was thinking about this show and like, you know, if i were to, you know, wanna go out and buy a car you know, and you kind of looking at, should i buy it now? should i buy in the future? you know, used car prices are surging like crazy. the value of my used car is high, but you raise the question, you have jason firm and was going to go out and buy a car now for 30000 dollars this year. but you might go up to 40. and if you made a rational economic choice and say okay, want to buy it sooner because inflation is going to drive those numbers higher than aren't you exacerbating the problem? how do you get out of this escalate? tory cycle of more and more demand because people fear if they don't get it now,

then then the, the absolute cost will go up. and the value of everything diminishes. i'm just an inch in how you get out of that cycle. yeah. is not a you know, there's not a clear cut answer to that question. on inflation expectations matter a lot. they fact, you know, are you going to buy something now or wait 6 months? that depends on your inflation expectations. what ways are you going to negotiate depends on your inflation expectations? does a business raise its prices or not? it depends on its inflation expectations. on the problem is this thing is really important, inflation expectations, but we don't know very well how it's set, how it changes or how to influence it. i'd like to think that the fed by talking more seriously about the problems with inflation. it's commitment to tackling inflation steps. it's taking to deal with inflation, will also bring down inflation expectations and change some of that consumer behavior around gaming the timing of inflation and the like. but, you know,

we just don't know exactly once these expectations start to rise. how you get that genie back in the bottle, and the hope is that you can get it back there without causing a recession like paul volcker dead. you know, i talked to a couple of senators recently, i won't name them, they both voted on in favor of the re nomination of j jerome powell, as chairman of the federal reserve board. but at the time they talk to him a lot about the feds role in the economy of buying bonds and you know, the need to begin tapering that and bring it down. and i just saw them the other evening and they were very upset that in their view, and i don't know if it's accurate. the fed has not been tapering off, is not been coming coming out of the economy. so it raises this question. do i like to ask you is what blind spot and what mistakes this is the fed making right now in this, in your view? or is it managing the portfolio of u. s. economy as, as, as well as it can, are,

you know, how would jason fermon council the fed to begin dealing with some of these questions where people begin to feel like this is a rigged economy and not one where they, the market is working as well as it could, yes, it's steve last year, the fed was way behind the curve. it was constantly saying the inflation is about to go away. it's not a problem. you know, implying that it didn't need to do very much. it's changed dramatically in the last several months. the expectations the market has for what the fed is going to do, has changed dramatically. they're identifying inflation, is the number one problem that they're dealing with. they're talking about using their tools, and we're going to start to see them using their tools. it's trickier to know how much they should use that if you go too far, you can cause a counter reaction. they've already tilted pretty far. busy i think they can tilt still further, but it's ok also to let the pressure build up. the expectations travel along

with them. you don't want to wake up one day and make a really, really dramatic move. so they're. busy in a better place now, and if you're going to still need to keep pushing themselves into that place of higher interest rates and letting the portfolio wind down possibly, and selling some of you know, another area that is come under scrutiny. in part because of cove it but because of economic bait behaviorism, we've all had to learn a little bit about the global supply chain. you know, we can't get certain components. we need or lights, or, you know, address certain things because of the global supply chain breakdown we've seen. i'd be interested in your thoughts on that and whether that's at a property at an effective way to begin thinking about supply chain issues in the future, or whether that folly. because it's very hard to get the circumstances, you know, to work in a market economy like ours. down closer to the folly view, mapquest. you know, i think global supply chains in the year after coven hit held up pretty well. there

are issues with p, p e. there were issues with ventilators, but for the vast, vast majority of the products, we all use, just the worst possible thing could imagine to the global economy. and yet, ever this, you know, the shelves are basically stopped. you could die most almost everything that you wanted to buy this year. it's been a little bit choppy or but even this year for most durable goods, there are more of them being introduced than ever before. there are more of them being consumed than ever before. and so for most of them, the problem isn't that there's been some supply chain that froze up. it's that we wanted to spend on making this up 20 percent more and we can only buy 10 percent more. now cars are a big and very notable exception to all of that car production is lower on car number of cars purchased is down, but outside of that important exception, a lot of what we're seeing is actually supply does not increase much as we wanted

it. yeah, let me ask you a question about this because i can give you got an interview, folks in your outside to just around america. they see prices surging, they don't know who to blame, they may blame the white house. they may blame, blame companies. i know a friend who's a regular every day buyer at starbucks and, and this friend is furious because he's a book, you know, basically a year ago at cost like 5 bucks for a muffin and a coffee. and now it's gone up to $8.25. so that's a, that's a pretty big surge. and is this a function of companies in your view that are meeting the price that people will pay as a corporate greed? are there things that companies are doing could be doing to not raise prices as quickly how? i mean, i don't get a price fixing, but how about price restraint? self restraint. right, so 1st i want to be clear. there is a 2 little competition in the u. s. economy. we need more vigorous and active anti

trust. i don't think that problem is closely related to the inflation problem we've been talking about. but there are a number of markets where it is a problem. in general though, you know whether your companies are always trying to maximize their profits, they're trying to do that in 2019. they're trying to do that. now you give people more money and companies are going to both res quantities and raise prices. they're going to do that, whether they're monopolies, or, you know, in, in gauge and heavy competition. well, you know how to be a smart economic advisor in a political system. and i know that you do not have to send your thoughts in to president biden and get, you know, you know, countered for them one way or another, but it does raise the interesting question of what is the president do in this situation, you're facing an election a midterm election this november, it was already going to be tough for the democrats. you have a lot of discontent. i mean, inflation has become one of the top issues of concern for americans today. mart more than russia, ukraine, more than a lot of the other things going on. this is

a big deal. what are the choices that he has in his political season of responding in a way that would be compelling in your view? yeah, i don't know the exact answer to that. i'm part of it is message i'm doing what i can, you know, it's good, you know, it might be bad before it gets better. no, i understand it's a legitimate problem for you. so not being out of touch, part of it is getting the policy right, which is mostly about pointing good people to the fed. that's a nominating good people for the fed. that's what he's done already. part of it is making sure he doesn't get distracted. the not just spend all you can't wake up every day and fight inflation is not a day's worth of activities every day for the president to do on that. he needs to spend his time on other things like getting on child tax credits for american families, dealing with climate change and all the other things that he was elected to deal with. now, i only get a that is fully solves the discontent. i think the only thing that solves the

discontent is inflation being lower. and the only thing that's going to make inflation lower is a combination of time and the federal reserve. you wrote a piece, jason about why so many mainstream economists did not see inflation coming. has there been any kind of revision in, in, in the profession by many of your colleagues on, on how to kind of tool up for the next time. so there's better anticipatory of predictions when it comes to something like this. yeah. you know, and the issue here was, our models were basically telling us this was going to happen. but they were saying such crazy things that people didn't want to believe them. so they must turn the models off and said, you know, we don't know if this we're going to add a fudge factor in. so the biggest lesson to me isn't that economics went wrong. it's to take your economic seriously and to never devalue that when you have powerful tools and use them like fiscal stimulus and monetary stimulus, they actually can make a very big difference. there's

a broader lesson which goes beyond economics, which is it's never a great idea to silence dissenting voices, shout them down and accuse them of being idiots. you know, maybe they're right. take them seriously. let's not have an echo chamber where everyone thinks the same thing. let's be uncertain, debate. ready and have a proliferation of voices, you're always going to get a better answer if you do that than the alternative. so when do you think i'm going to be less frustrated with the price of just peanut butter, which is surging. i happen to be, you know, a great fan of just peanut butter which is searching. good, crazy level. well 1st of all, if i could suggest that you switch over to ice cream, those prices have actually been falling on lately. i think it's the only thing that price where prices are falling on. that doesn't work for you. i don't know. maybe wait a year. well, we'll leave it there. jason firm and former top economic adviser of the white house

and now professor of the practice of economic policy at harvard university. thanks so much as great conversation on inflation everything you needed or wanted to know . thanks jason. thank you. so what's the bottom line? the good news is that there are some jobs out there and some even pay well, but guess what? inflation will eat your higher wages. quick fixes are just hard to find. the wealthy won't have a problem, but the vast majority of americans are going to have to scramble harder than ever to pay their bills. feel their cars with gas, pay their rent by their medicine and just pay more to survive and keep their heads above water. when the american standard of living takes a big hit, folks become really unhappy and unhappy voters punish the party in power, which is the democrats. they should be bracing for a very tough election battle this year, especially if things go from bad to worse, which i think they probably will. and that's the bottom line, ah

right. as a weapon of war leaves the very deepest, scott, scott, so rule that the victims, men and women can barely talk about it. the only witnesses who can help bring about justice al jazeera fall as human rights campaign, as in libya, investigating right since the 2011 recognition libyan unspeakable crime on al jazeera, an artist in washington dc, with a tree making a painting for unity, for people who are struggling out is a world meets a palestinian seeking inspiration for striking new in the heart of the american capital. the bene, finish feed ard is a kind of conference you that will his plan for universal artwork succeed. we're getting the colors of home on al jazeera.

ah, how long has them seeka in doha, that headlines on al jazeera u. s. president joe biden will convene and national security meeting on sunday to discuss the crisis in ukraine. he has says the russia backed separate, just have fired artillery on more than 30 settlements in the east. european monitoring h a c o s c says it's recorded almost 2000 cease fire violations on saturday. russia says hypersonic michelle's have been launched during strategic nuclear drills. i was seen by president vladimir putin.