“There is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation,” wrote Larry Summers in February 2021. A year later, the debate still rages over the first part of that sentence — the extent to which the American Rescue Plan is responsible for rising prices. But the rest of it is no longer in question: We’re currently experiencing the worst inflationary crisis in decades.

Annual inflation was already at its highest rate in decades in January of this year. But there was still a hopeful story you could tell about 2022: As the Covid pandemic eased, spending patterns would normalize, supply chains would strengthen, the labor market would stabilize, and inflation would ease. Then the Russian invasion of Ukraine sent global commodity markets into a tailspin and energy prices to record highs. An Omicron wave hit China, leading to huge lockdowns affecting global supply chains. And while the Fed has responded with the first of many planned interest rate hikes, it looks as though the inflation picture is only going to get worse in the immediate future.

For over a year now, Summers — a former U.S. Treasury secretary and current Harvard economist — has been warning about the economy that we appear to be entering. So I invited him to the show to make his case and paint a picture of what he thinks comes next. We discuss why he thinks we’re almost certainly headed toward a recession, why he believes the Fed is engaged in “wishful and delusional thinking,” whether corporations are using this inflationary period as an excuse to goose profit margins, how to avoid a 1970s-style stagflation crisis, whether interest rates are the right tool to be addressing inflation in the first place, why he thinks much more immigration is one of the best tools we have to bring down prices in the long term and much more.

Mentioned:

Larry Summers’s Mar. 17 Op-Ed in The Washington Post

Book Recommendations:

The Best and The Brightest by David Halberstam

The Price of Peace by Zachary D. Carter

Slouching Towards Utopia by J. Bradford DeLong

Thoughts? Guest suggestions? Email us at [email protected].

You can find transcripts (posted midday) and more episodes of “The Ezra Klein Show” at nytimes.com/ezra-klein-podcast, and you can find Ezra on Twitter @ezraklein. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs.

“The Ezra Klein Show” is produced by Annie Galvin, Jeff Geld and Rogé Karma; fact-checking by Andrea López-Cruzado; original music by Isaac Jones; mixing by Jeff Geld; audience strategy by Shannon Busta. Our executive producer is Irene Noguchi. Special thanks to Kristin Lin and Kristina Samulewski.

Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.