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The Fed plans to sharply boost unemployment

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Re: The Fed plans to sharply boost unemployment

#31

Post by jmoak3 »

mjhay wrote: post #5

Wage growth has not been keeping up with inflation, and may even be damping it. The steady chorus of claims that wages are too high strikes me as consent-manufacturing by capital. https://www.epi.org/blog/wage-growth-has-been-dampening-infl... https://insurancenewsnet.com/oarticle/inflation-continues-to...

Wages are too high, because our entire economy is built on the backs of available race to the bottom international labor.

Demographics and the security situation is changing this, and the establishment (for better and worse) is absolutely freaking out.

The world as we have lived it the past 30 years cannot exist if people doing labor can command a decent wage by USA standards, we’re going to have to recalibrate for a while

Re: The Fed plans to sharply boost unemployment

#33

Post by mjhay »

mjhay wrote: post #14
refurb wrote: post #11

Earlier quoted context omitted.

Everybody wants to control inflation until it's time to suppress wage growth. The Bank of Canada even came right and out said that employers should definitely not raise wages quickly. https://www.theglobeandmail.com/business/article-wage-negoti...

Weird how government agencies that fall to regulatory capture all keep advocating for things beneficial to the industries they oversee. Sufficient tax increases for the well-off would have the same effect as punishing the working class, but that's never an option for some reason.

replying to californical:

"Sufficient" is the operative word here. There's a tremendous amount of non-productive rent-seeking, such as literal rents. These are a massive drag on our economy, because they shift investments towards non-productive use. More targeted tax increases to discourage the worst rent-seeking would help a lot, in addition to generating revenue and easing price pressures.

Re: The Fed plans to sharply boost unemployment

#34

Post by jibe »

socialismisok wrote: post #16

Reducing power of workers in favor of capital is deeply disappointing to me. The idea that we'd want to increase unemployment rather than have everyone working is frustrating. "But wages are too high!" Shouldn't the folks who believe in markets as a force for good want wages to be set by markets? The most profitable businesses can pay the wages for workers, and the least profitable ones can't hire? Why do we need som…

Labor isn’t gaining power now, or else you’d see wages gains greater than inflation. Labor is losing to inflation.

Re: The Fed plans to sharply boost unemployment

#35

Post by Victerius »

socialismisok wrote: post #16

Reducing power of workers in favor of capital is deeply disappointing to me. The idea that we'd want to increase unemployment rather than have everyone working is frustrating. "But wages are too high!" Shouldn't the folks who believe in markets as a force for good want wages to be set by markets? The most profitable businesses can pay the wages for workers, and the least profitable ones can't hire? Why do we need som…

- Full employment

- Low inflation

- High wages

Pick two.

Re: The Fed plans to sharply boost unemployment

#37

Post by gruez »

hedora wrote: post #20

> Fed Chair Jerome Powell made that amply clear this week when the central bank projected its benchmark rate hitting 4.4% ... ... In plain English, that means unemployment. The Fed forecasts the unemployment rate to rise to 4.4% next year What? The fed is setting benchmark unemployment rates now? That seems unlikely.

Seems like a clueless reporter assuming that "benchmark rate" was referring to unemployment rather than interest. The linked article shortly after that quote confirms this, by explicitly saying that the 4.4% rate was referring to the federal funds rate.

Re: The Fed plans to sharply boost unemployment

#38

Post by AndrewUnmuted »

socialismisok wrote: post #19
econ101time wrote: post #15

Earlier quoted context omitted.

> That seems like a pretty whacky theory to me because it assumes that companies only increase prices when forced to do so, and not just because they can. I see people post things like this, and I'm forced to conclude that you don't understand supply and demand. Edit: Sure, monopoly pricing is real. But blaming monopoly pricing for inflation is dubious. You'd need an account of 1) how the goods in the CPI basket are…

Supply and demand works on a idealized economy, but it's hardly true in the real world where there are cartels, monopolies, and other incentives to keep prices high even if there's supply.

No post body was provided.

Re: The Fed plans to sharply boost unemployment

#39

Post by Retric »

econ101time wrote: post #24
Retric wrote: post #22

Earlier quoted context omitted.

Supply and demand are why companies can raise their prices. Suggesting companies only raise prices when they must is mistaken. Further, increasing the number of workers in the economy increases supply and demand for some things, while the supply of other stuff is like video games is unlimited.

You're forgetting that there's a market at the other end too. Every business has a cost of capital, and if its returns are not in line with other similarly placed businesses, they will have to spend a lot more money to acquire capital.

That’s assuming they need to raise capital. However, most companies are flush with cash and will only become more profitable with increasing demand.
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