Jerome Powell and the other Fed governors seem determined to wreck the economy in pursuit of their elusive and likely unrealistic 2% inflation rate. They seems stubborn and intransigent and unable to see beyond the ends of their own noses. In addition to the other harms of recklessly raising interest rates, according to some reports, Silicon Valley Bank failed because interest rates rose too quickly and it was unable to adapt.
With regard to Biden's budget, most of the mainstream reporting I saw focused on how much the spending would be, how much taxes would be raised, and how the deficit would be reduced but not eliminated. There was only passing mention of what the spending would be for. I wish prominent people in the news media would spend more time pointing out that Biden is not proposing to spend taxpayer money just because he likes to spend taxpayer money, but because he thinks government should function to improve people's lives. The federal government is not a balance sheet, but exists to provide services to the people.
Our economy is controlled, for the most part, by the influences exerted upon big business by the the Republican party. The co-operation between these two institutions create the ebb and flow of our economy. They coddle to one another in an effort to find a balance where the Democrats look bad and the bulk of the people suffer financially. Trump has poisoned the minds of his followers to the point where they can't tell right from wrong, and in turn they blame their plight on the Democrats for their failed political policies which the economy undermines at every turn.
'Out of touch...' Everywhere you turn - the Fed, SCOTUS, Congress. Frickin' mess.
I'm no economist, but I think the Fed is horribly mis-judging reaction to the situation. The economy is vigorously marching forth, unleashed in the post-pandemic environment. I don't see this demand abating, so Jay will continue to make the rate moves to kill it. Recession is inevitable.
In the face of the rampant monopolization of our economy and where anti-trust is non-existent, time to pull some of the '70s tools out of the toolbox - windfall profits tax, price controls.
The debt and deficits are problems largely manufactured by successive Republican tax cuts for the rich and refusals to increase the contributions to Social Security, again, by the rich to allow them to become richer and more powerful. A long term, clear, focus on this is important to keep the spotlight off the “theater of the absurd.”
There is No Labor Shortage ; However there is a Wage Shortage. Most Jobs that lots of Openings a Need for Labor Don’t Pay a Living Wage-That is a Wage that will pay for Food Clothing Shelter and Transportation. Thank You Ray Crock for Persuading Dick (I Am Not A Crook) Nixon to make the Minimum Wage Low. Wonder how much that cost Him.
You have hit the nail on the head as you usually do, Dr. Reich. What pains me most as I endure the eighth decade of my sojourn through this thing we call life is that so many can not see these same things that you have pointed out and draw the conclusions that you and I do. How is it that this is possible? Is our educational system that flawed?
Seems whenever the US gets into a bind, like covid or the Ukrainian situation, supply chain et al, corp profits go up, along with prices, yet the Haves always bitch about the economy while they're making out like bandits! Sure not the correlation that anyone with a brain sees as making sense!!
The Universal rule is still "them that has, gets!"
The "false view that wages push prices" and "if workers gain, investors lose" are in practicality two ways of saying the same thing; I chose the latter because it reflects where Wall Street's cold heart is in spite of the well-documented truth of the former.
Wonderful Coffee Klatch as always, however it left me wanting to go on my roof and scream "Jerome quit raising interest rates". I held back as it would make me hoarse and anyway it's raining again. Is there any way we folk can lobby the Fed or have some input or can this happen only through the President?
@Robert Reich-- so excited to hear you recite the beginning of the General Prologue of the Canterbury Tales! The chat experiment was really fun, too, and thanks for all your usual insightful takes on the current political and economic news.
Regarding the debt-ceiling matter, it must be pointed out time and again that we currently have a debt-based currency system. “National debt” is essentially the money supply. “Debt ceiling” therefore is a limit on how much money can be in circulation at that point in time. With all the current needs of the country, does anyone (other than Chairman Powell) think our basic problem is too much money?
The real issue is whether the funds are being used to meet the true needs of the country, or are they being squandered on needless or even destructive projects designed primarily to further enrich the already rich?
Jerome Powell and the other Fed governors seem determined to wreck the economy in pursuit of their elusive and likely unrealistic 2% inflation rate. They seems stubborn and intransigent and unable to see beyond the ends of their own noses. In addition to the other harms of recklessly raising interest rates, according to some reports, Silicon Valley Bank failed because interest rates rose too quickly and it was unable to adapt.
With regard to Biden's budget, most of the mainstream reporting I saw focused on how much the spending would be, how much taxes would be raised, and how the deficit would be reduced but not eliminated. There was only passing mention of what the spending would be for. I wish prominent people in the news media would spend more time pointing out that Biden is not proposing to spend taxpayer money just because he likes to spend taxpayer money, but because he thinks government should function to improve people's lives. The federal government is not a balance sheet, but exists to provide services to the people.
Our economy is controlled, for the most part, by the influences exerted upon big business by the the Republican party. The co-operation between these two institutions create the ebb and flow of our economy. They coddle to one another in an effort to find a balance where the Democrats look bad and the bulk of the people suffer financially. Trump has poisoned the minds of his followers to the point where they can't tell right from wrong, and in turn they blame their plight on the Democrats for their failed political policies which the economy undermines at every turn.
'Out of touch...' Everywhere you turn - the Fed, SCOTUS, Congress. Frickin' mess.
I'm no economist, but I think the Fed is horribly mis-judging reaction to the situation. The economy is vigorously marching forth, unleashed in the post-pandemic environment. I don't see this demand abating, so Jay will continue to make the rate moves to kill it. Recession is inevitable.
In the face of the rampant monopolization of our economy and where anti-trust is non-existent, time to pull some of the '70s tools out of the toolbox - windfall profits tax, price controls.
The debt and deficits are problems largely manufactured by successive Republican tax cuts for the rich and refusals to increase the contributions to Social Security, again, by the rich to allow them to become richer and more powerful. A long term, clear, focus on this is important to keep the spotlight off the “theater of the absurd.”
There is No Labor Shortage ; However there is a Wage Shortage. Most Jobs that lots of Openings a Need for Labor Don’t Pay a Living Wage-That is a Wage that will pay for Food Clothing Shelter and Transportation. Thank You Ray Crock for Persuading Dick (I Am Not A Crook) Nixon to make the Minimum Wage Low. Wonder how much that cost Him.
J
A depression before the election would be bad for Biden and that is what Trump is engineering.
You have hit the nail on the head as you usually do, Dr. Reich. What pains me most as I endure the eighth decade of my sojourn through this thing we call life is that so many can not see these same things that you have pointed out and draw the conclusions that you and I do. How is it that this is possible? Is our educational system that flawed?
Heather’s ChatGPT robot voice sounds vaguely Russian.🤣
That's pretty cool that Joe Biden (and his team) have figured out how to out-psych the Nazi game. Head 'em off at the pass!
Seems whenever the US gets into a bind, like covid or the Ukrainian situation, supply chain et al, corp profits go up, along with prices, yet the Haves always bitch about the economy while they're making out like bandits! Sure not the correlation that anyone with a brain sees as making sense!!
The Universal rule is still "them that has, gets!"
The "false view that wages push prices" and "if workers gain, investors lose" are in practicality two ways of saying the same thing; I chose the latter because it reflects where Wall Street's cold heart is in spite of the well-documented truth of the former.
Thanks for addressing topics consistent with your expertise
Wonderful Coffee Klatch as always, however it left me wanting to go on my roof and scream "Jerome quit raising interest rates". I held back as it would make me hoarse and anyway it's raining again. Is there any way we folk can lobby the Fed or have some input or can this happen only through the President?
@Robert Reich-- so excited to hear you recite the beginning of the General Prologue of the Canterbury Tales! The chat experiment was really fun, too, and thanks for all your usual insightful takes on the current political and economic news.
Regarding the debt-ceiling matter, it must be pointed out time and again that we currently have a debt-based currency system. “National debt” is essentially the money supply. “Debt ceiling” therefore is a limit on how much money can be in circulation at that point in time. With all the current needs of the country, does anyone (other than Chairman Powell) think our basic problem is too much money?
The real issue is whether the funds are being used to meet the true needs of the country, or are they being squandered on needless or even destructive projects designed primarily to further enrich the already rich?
I didn’t leave it out….it’s implicit in the so-called laws of supply and demand which basically allows increased prices at every opportunity.
There are no ethics in our economic systems. Maybe the time has come but who or what will make that happen?