The Fed plans to sharply boost unemployment
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The Fed plans to sharply boost unemployment
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Re: The Fed plans to sharply boost unemployment
#2"With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices."
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.
Re: The Fed plans to sharply boost unemployment
#3“Whereas my father made your yoke heavy, I will add to your yoke. Whereas my father scourged you with whips, I will scourge you with scorpions.”
Re: The Fed plans to sharply boost unemployment
#4"With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices." That seems like a pretty whacky theory to me because it assumes…
It also doesn’t take into account 300k Boomers retiring per month. The Fed can’t print oil or housing, but it’s going to keep raising the benchmark rate while there’s a labor supply shortage. I am skeptical they can destroy jobs faster than workers take themselves out of the labor pool (through retirement and death), although driving down artificially high asset prices is a welcome result.
Look at a population pyramid for the US, it’s plain as day.
Re: The Fed plans to sharply boost unemployment
#5Wage 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...
Re: The Fed plans to sharply boost unemployment
#6"With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices." That seems like a pretty whacky theory to me because it assumes…
In a free market with healthy competition, a company can't just raise prices and increase its profit margins, because its competitors will keep their prices low and get all the business.
Thus, indeed, companies can only afford to raise prices when all other companies in their space are forced to do the same, for instance due to rising labor costs.
Re: The Fed plans to sharply boost unemployment
#7"With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices." That seems like a pretty whacky theory to me because it assumes…
If companies cannot raise prices due to higher unemployment then it may be an effective, albeit cruel, strategy.
Re: The Fed plans to sharply boost unemployment
#8For basically my entire adult life, at the macro level capital investments have basically been free for corporations.
While I have an idea of will happen based on historical data, it will certainly be ‘interesting’ to experience it first hand. :/
Re: The Fed plans to sharply boost unemployment
#9"With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices." That seems like a pretty whacky theory to me because it assumes…
> 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.
It comes across especially wacky to me as price hikes have outstripped wage hikes. Considering wages and purchasing power has flatlined for workers, but productivity has greatly increased, seems like there's a lot of people getting fleeced.
Re: The Fed plans to sharply boost unemployment
#10"With an additional million or two people out of work, the newly unemployed and their families would sharply cut back on spending, while for most people who are still working, wage growth would flatline. When companies assume their labor costs are unlikely to rise, the theory goes, they will stop hiking prices. That, in turn, slows the growth in prices." That seems like a pretty whacky theory to me because it assumes…
In a free market with healthy competition, a company can't just raise prices and increase its profit margins, because its competitors will keep their prices low and get all the business. Thus, indeed, companies can only afford to raise prices when all other companies in their space are forced to do the same, for instance due to rising labor costs.
What portion of markets lack healthy competition?