On Friday’s broadcast of the Fox News Channel’s “America Reports,” economist, President of Queens’ College, Allianz Chief Economic Adviser, and former Obama Global Development Council Chair Dr. Mohamed El-Erian stated that while President Joe Biden’s economic policies have worked in terms of the job market, “Where they’re not working is in giving the average American security.”
Co-host Sandra Smith asked [relevant exchange begins around 2:40] “I hear you talking about the headwinds in the economy and how this isn’t really felt by everyday Americans, this benefits mostly the rich, the very people that this administration says they’re out to help the most aren’t really benefiting from that stock market run. So, would you say this President’s economic policies are working?”
El-Erian answered, “So, where they’re working is in the jobs market, where we’ve had 28 months of unemployment below 4%. That is an incredible record. Where they’re not working is in giving the average American security. And you see that very clearly in the surveys. They are worried about prices, they’re worried about future wages. Their pandemic savings have now gone negative and their credit cards are maxed out in quite a few of the segments of –.”
Smith then cut in to ask, “Do you worry this is the sort of the next shoe to drop? Credit card usage is going up. We haven’t seen a big change in the delinquency rates But, is there –.”
El-Erian cut in to say, “We’re starting to see it. What I worry about — think of a car where you have no spare tires. So, if we hit a bump in the employment market, which I hope we don’t, but, if, for some reason, companies started laying off a lot more people, then we no longer have the spare tire of savings, low-income households have used up their pandemic savings and most of them have maxed out their credit cards.”
He added, “I am worried that the economy’s going to start slowing much faster than most people think.”
Follow Ian Hanchett on Twitter @IanHanchett
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