Top Trump Economic Adviser Heaps Praise On Ocasio-Cortez: ‘Hats Off To Ms. AOC’

Ed Mazza

It’s not often that Rep. Alexandria Ocasio-Cortez (D-N.Y.) receives praise from inside the White House of President Donald Trump. But it happened on Thursday.

Larry Kudlow, director of the National Economic Council, said the freshman lawmaker had “nailed” her line of questioning to Federal Reserve Chair Jerome Powell during a House hearing earlier this week.

Ocasio-Cortez asked Powell about the Phillips curve, an economic model that says inflation is supposed to rise as unemployment drops. CNBC reported that the concept was used by the Fed to guide policy.

However, in recent years, low unemployment hasn’t led to rising inflation. Ocasio-Cortez put Powell on the spot about the issue, and he admitted that the link “was broken at least 20 years ago” and the relationship between the two had “become weaker and weaker and weaker.”

Kudlow applauded Ocasio-Cortez for her queries.

“I got to give her high marks for that,” Kudlow told Fox News. “She got that out of the chairman.”

He added that the White House agreed:

“By the way, that’s been my position. That’s been the president’s position: Strong growth doesn’t cause higher inflation and interest rates. It looks like the Fed is going to cut their rates.”

The agreement likely ends there; the point of Ocasio-Cortez’s questions was to say that if the Phillips curve was wrong about unemployment driving inflation, other assumptions about inflation might also be wrong.

“Do you think that could have implications in terms of policymaking?” she asked Powell. “That there is perhaps room for increased tolerance of policies that have historically been thought to drive inflation?”

Her specific example was increasing the minimum wage, something Kudlow has called “a terrible idea.”

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Most Americans Support Raising The Minimum Wage

Seventy-three percent of Americans support <a href="http://nelp.3cdn.net/0be1c6315f2430afa6_arm6bq9wu.pdf">raising the minimum wage</a> to $10 per hour and indexing it to inflation, according to a recent poll.
Seventy-three percent of Americans support raising the minimum wage to $10 per hour and indexing it to inflation, according to a recent poll.

Raising The Minimum Wage Would Boost The Economy

<a href="http://www.chicagofed.org/digital_assets/publications/working_papers/2007/wp2007_23.pdf">Low-wage workers spend more</a> when the minimum wage is raised, according to a 2011 study by the Federal Reserve Bank of Chicago. <a href="http://www.epi.org/publication/ib341-raising-federal-minimum-wage/">This spending</a> in turn boosts the economy and job growth, according to the Economic Policy Institute.

Raising The Minimum Wage Does Not Hurt Employment

<a href="http://www.cepr.net/documents/publications/min-wage-2013-02.pdf">A number of</a> <a href="http://davidcard.berkeley.edu/papers/njmin-aer.pdf">studies</a> have found that raising the minimum wage does not reduce total employment by a meaningful amount.

Having A Minimum Wage Has Kept More Teens In School

<a href="http://www.nber.org/papers/w16355">The minimum wage</a> has kept teens in high school longer by reducing the number of low-wage jobs available to them, according to one study.
The minimum wage has kept teens in high school longer by reducing the number of low-wage jobs available to them, according to one study.

Prices Don't Always Rise In Response To Minimum Wage Increases

Though Rep. <a href="http://thinkprogress.org/economy/2013/02/13/1587381/top-republicans-oppose-minimum-wage/">Paul Ryan</a> (R-Wis.) recently warned that raising the minimum wage would be "inflationary," prices apparently don't rise in response to minimum wage hikes. For example, <a href="http://www.nber.org/papers/w3997">fast food restaurants in Texas</a> did not raise prices in response to federal minimum wage increases in 1990 and 1991, according to one study.

Letting The Minimum Wage Fall Could Increase Income Inequality

<a href="http://www.nber.org/papers/w16533">The erosion of the minimum wage</a> -- that is, the decline of its purchasing power as prices rise -- contributed to income inequality among poorer Americans in the 1980s, according to one study.

Worker Benefits Don't Get Cut In Response To Minimum Wage Increases

<a href="http://www.nber.org/papers/w3655">Minimum wage increases</a> did not lead to reduced <a href="http://www.nber.org/papers/w9688">worker benefits</a>, according to two studies.

Raising The Minimum Wage Does Not Shorten Workdays

In New Jersey, <a href="http://www.nber.org/papers/w6386"> employers did not cut their workers' hours</a> in response to the state's 1992 minimum wage hike, according to one study.
In New Jersey, employers did not cut their workers' hours in response to the state's 1992 minimum wage hike, according to one study.

Most Minimum-Wage Workers Are Adults

Contrary to popular belief, <a href="http://www.epi.org/blog/affected-president-obamas-proposed-minimum/">84 percent of minimum-wage workers</a> are age 20 or older, according to the Economic Policy Institute.

A Falling Minimum Wage Contributes To Obesity

<a href="http://www.nber.org/papers/w15485">The erosion of the minimum wage</a> has contributed to growth in U.S. obesity by making fast food cheaper and more popular, according to one study. Meanwhile, <a href="http://www.reuters.com/article/2008/01/02/us-healthy-food-idUSPAR27349420080102">healthy food</a> has become more expensive.

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This article originally appeared on HuffPost.