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The Fed plans to sharply boost unemployment

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181–190 of 227 posts

Re: The Fed plans to sharply boost unemployment

#181
post #87

Earlier quoted context omitted.

Some of those on /r/antiwork seem to expect to build careers from McJobs and Starbucks. Instead of seeing these as part time jobs for high school and college students, their expectations are that these jobs can support an apartment rent in a big city without roommates. These types of complaints seem irrational or misguided. Many of their complaints do seem grounded in truth, however. America's low hanging fruit blue…

Blue collar shortage in a non-US area. Here, you're not getting the big bucks until you have quite a few years underneath your belt. Additionally, you'll have to be self-employed. That's what people are complaining about. The hurdles are higher and more frequent than before. It's still there, but having your first home at 35 is vastly different from having it at 25. My friend group is filled with people privileged en…

> Now imagine what happens when blue collars get saturated again.

The downward pressure on their compensation will see the cost to build new homes come down and thus the market will trend towards affordable again? After all, like all things, the cost of a used home is a function of the cost of a new home.

Re: The Fed plans to sharply boost unemployment

#182
post #118

Earlier quoted context omitted.

> This is deleterious beyond just economics. Put people out of a job and they go sick, die more frequently and have a general unpleasant time. This "people are going die" justification has been behind so much catastrophically unwise policy, because there is no argument against it that matches the visceral alarms-blaring rhetoric. It's a blunt weapon and there's not a matching response, since the honest & sincere resp…

It should be possible to bail out the people without bailing out the companies, and it should be doable without generic QE. What if the government builds its own farms and grocery stores and housing complexes? Would that be bad because of how much control it would give the government or would it be good because of how much control it wrests away from private industry?

It's bad because the ultimate truth that's been proven over the entirety of human history is that a small group of people simply do not possess the knowledge required to operate economies & plan peoples' lives.

That knowledge is often only available to individuals themselves (their preferences!).

Re: The Fed plans to sharply boost unemployment

#183
post #137

Earlier quoted context omitted.

They are psychopaths because they have no concern for the misery they cause. If it were themselves or their families who would have their lives ruined, rather than 1.2 million innocent Americans, they wouldn't be so quick to enact this policy. A policy only supported by very dubious research, mind you. They are no better than the generals that dropped the atomic bombs on Japan, Vladimir Putin, or any other psychopath…

They do this knowing taking no action will be far far worse for everyone. We saw what a decade of stagflation looked like and it’s much worse than limited job losses. Even those who lose jobs will be better off with a short recession rather than costs inflating away their earnings. The actions taken in 2007 and 2008 were largely because of how terrified decision makers were of the Great Depression (Bernanke in partic…

No, they don't know anything. The idea that unemployment and inflation is related comes from a theoretical model called NAIRU and promoted by neoliberal economists. The model has zero empirical evidence. In other words, these psychopaths could as well torture hamsters or dance rain dances and it would have the same impact on inflation as what they are doing now. People blindly believing them, as you do, are no different from Russians who believe that the war in Ukraine is necessary to protect "the Motherland". But when it is your livelihood on the line, you will change your tune, just like Russians who rather not themselves be drafted.

Re: The Fed plans to sharply boost unemployment

#184
post #172

Earlier quoted context omitted.

Another overlooked irresponsible move by the Fed in recent times was when Yellen's Fed was very slow to raise rates coming out of the 2008 recession (the Federal reserve held rates near 0 until 2016 ), which gave certain segments of the market a lot longer to grow with free money than they should have had. That move, in turn, also gave the fed a lot less flexibility during Trump's trade war and the following crisis.…

Yep, I agree. There definitely seems to be a subtext here of "the fed is super antsy about being up against the zero interest rate 'bound' and now that it has a chance it's going to push as far away from it as it can get before the next big thing hits". Controlling inflation is obviously front and center but the Fed needs to get back to a little more historically normal interest rates too. Is it entirely the fault of…

You make a great point about fiscal policy. Around 2010 we saw the beginning of the end of the Fed and Congress being able to work together on monetary and fiscal policy, and that clearly made Yellen (a labor economist with some Keynesian leanings) a lot less confident about raising rates. Powell seemed to substitute this with an uncomfortably close relationship to the Trump white house, which wasn't actually a real replacement for good fiscal policy. I was actually hoping/guessing that Biden in 2020 would replace Powell with someone his party preferred (even if it was Lael Brainard, who is a little too left-leaning for my taste - Raphael Bostic would have been great), but I guess Joe Manchin got in the way of that.

Re: The Fed plans to sharply boost unemployment

#185

Inflation is high because demand exceeds supply. You have to reduce demand to match the available supply. Interest rates are the main tool to do that. This is true even if the ultimate cause is supply chain issues.

Demand can't exceed supply, they're both functions of price and quantity. They always meet, but nobody ever says "demand meets supply." They meet through black markets if need be, with prison labor if need be, with crime torture murder lobotomy (heh) you name it but they meet.

Re: The Fed plans to sharply boost unemployment

#186
post #89

Zero direct evidence for the title's claim was provided in the article. All the Fed is doing is to normalize interest rates. Deeply negative real yields (5% or more) are aberrations that history has shown to ultimately lead to catastrophe. Yet talking head and Dem Senator alike are treating rate normalization as financial Armageddon. Somebody tell me how at the very least a 0% real yield on cash is going to kill the…

A non-negative real yield on cash means its purchasing power never decreases. Is there an objective reason that the purchasing power of cash should never decrease? Negative yields encourage economic activity and discourage hoarding (use it or lose it).

That’s the economic orthodoxy. The semiconductor industry has been deflationary since its inception and there’s been plenty of economic activity.

Re: The Fed plans to sharply boost unemployment

#187
post #152

Earlier quoted context omitted.

Inflation is high because corporations have increased consumer prices well above their own increases in costs. There's just as much evidence for this claim as "inflation is demand > supply" or "inflation is M2".

The "corporations are just greedy" thing makes zero sense. If it's just greed, then why have they just recently started? It's not like they all got together and decided to raise prices.

Right so a few years's previous it was more about expanding market-share with lower prices. Then they saw employee's not getting their lives ruined when they got fired, like not getting the phone calls from that employee begging for his job back at half the wage, meaning they got told "I quit" way more, in great part because of Trump's unique $1500 check. That was what did it. Allowed a cascade of savings that freed many people. So then they could buy bulk their needs, then they could buy the toy their child truly desired as an iconic gift of their childhood and that wasn't that expensive but made them much more pleasant and resilient (this happened to me with Magic The Gathering), or like a much-needed fix for the car that was always breaking down. That shit. Bosses hate that shit. Fucking hate it, why else would they tell you it's good and not pay any raises ever if they actually wanted you to buy it? Tell you to drink tap water instead of water from bottles, when for every quart of tap water you need to drink a gallon of bottled water. Need. Not an "impulse", not a "craving", need, drinking brine makes you thirsty, it's brine, salty peanuts at the bar so you buy a "refreshing" drink. That's a confession. Advertisements say "Coca-Cola is refreshing". Confession of guilt right on the fucking billboard. Nothing can be more refreshing than pure water, or I'm sorry purified water, like Coca-Cola uses, "purified". Tap water could be purified. It never is. Bottled water is always purified, all of it, 100%. Or nobody will buy it twice! Even the bottled water that is said to come from tap water is in fact--it's true--tap water, but literally always gets filtered for fluorine, that they don't tell you. And it makes sense, refreshing, fresh, tap water, not fresh. Bottles and cans, fresh. Fresh water. Salt water. Brine. It's not relevant the percentage nobody cares, it's different all the time and if you measure it and try to tell anybody they accuse you of accusing them of conspiracy. Question is, is it salty yes or no? Yes. Is Coca-Cola refreshing? How could it be? What could you add to water to make it more refreshing than mountain streams? Literally nothing (well dextrose like I just served up, most refreshing drink bar none, but nobody sells that anywhere). You can't add anything to water to make it refreshing, you must remove something, and if there is nothing to remove, you have no business. That means you're fired. So you gotta eliminate the competition, the ultimate competition for like 20% of America's spending, some crazy amount, so put something salty in the tap water.

Saving up for the future, smart spending, man. Bosses hate that fucking shit. Prefer employees in terrible debt, behind on rent, rape extortion literally. That's the engine of the American economy, the ultimate power. Fedex's president complained about this, said when the checks went out suddenly people couldn't do backbreaking labor. Literally backbreaking now and then--Amazon was accused of this too, the reason for unionization was despite the money being good they broke backs in a week, they were squandering crazy amounts of wealth, $5000000 in treatment that doesn't even work, all to save $5 of labor costs. Bezos, the negative quadrillionaire.

So when they saw employee's not bending their backbone satisfyingly (and there's bosses who actually look out for you, not the previous two but there are, there are) they realized they would get asked for a raise. So as soon as inflation (raises) was predicted, they wanted to outdo and preempt it with higher prices. Like it was an opportunity. And in addition, as collusion, to cause the Fed to raise interest rates meaning debt becomes crazily more expensive, and really also the raising interest rates means "you can get away with anything in the workplace", it's a signal to the whole system.

Re: The Fed plans to sharply boost unemployment

#188

Earlier quoted context omitted.

Blue collar shortage in a non-US area. Here, you're not getting the big bucks until you have quite a few years underneath your belt. Additionally, you'll have to be self-employed. That's what people are complaining about. The hurdles are higher and more frequent than before. It's still there, but having your first home at 35 is vastly different from having it at 25. My friend group is filled with people privileged en…

> Now imagine what happens when blue collars get saturated again. The downward pressure on their compensation will see the cost to build new homes come down and thus the market will trend towards affordable again? After all, like all things, the cost of a used home is a function of the cost of a new home.

Well, in HCOL areas, the land costs more than the labor charges.

Re: The Fed plans to sharply boost unemployment

#189

Earlier quoted context omitted.

Unfortunate (for your case) that you cited the NBER. Their definition of a recession begins as follows: > Q: What is a recession? What is an expansion? A: The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee's view is that while each of the three criteria—depth, diffusion, and du…

That is the NBER's definition, which is inside the US. I said originally that the definition *outside of the US* (and outside of the current time - since the NBER has de facto followed the global definition until 2 months ago) is two consecutive quarters of negative growth. The only reason the definition of "recession" is such a hot button issue in the US is that it looks bad for a political party to preside over a r…

You literally said:

> The NBER has never failed to call a recession on 2 quarters of negative growth in the past,

However, thus far, despite two quarters of GDP decline, they have not (and from their own definition, it is clear why they have not).

Business Insider believes the state of the job market to be the primary reason why.

https://markets.businessinsider.com/news/stocks/economy-nber...

> The NBER, by the way, uses many metrics to declare recessions, and they particularly overweight employment and payroll metrics

You may consider it overweighted, my point was merely that the use of a single metric is mostly a feature of pundits and not civic institutions like NBER, who you mentioned as arbiters of being-in-receession.

Re: The Fed plans to sharply boost unemployment

#190
post #111

Earlier quoted context omitted.

It’s going to kill the economy because the Fed is basically setting up perfect conditions for stagflation. Congress and the Fed caused the M1 money supply to 5X in just a period of two years. Of course there is going to be inflation in such a scenario. And yes, while the money supply isn’t the only factor that determines inflation, it certainly is a part and such a drastic change in the money supply almost certainly…

> Congress and the Fed caused the M1 money supply to 5X in just a period of two years. Oft-repeated, but incorrect. The way M1 is calculated was changed in 2020, and the apples to apples comparison is actually a little bit less than 2X. https://fred.stlouisfed.org/series/M1SL

fucking lol. 2X!!!!!! That's still unfathomable. We're lucky everything didn't double in price.
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