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Super low rates are bad all the time. They allow many things to exist that shouldn't, while the viable businesses have to pay higher prices for all their input
by stretchwithme 11y ago
Super low rates are bad all the time. They allow many things to exist that shouldn't, while the viable businesses have to pay higher prices for all their inputs.
When you have cheap money, more people think marginal investments now make a lot of sense. But if you create too many online dog food companies, eventually most of them have to be shut down.
It would have been better to allow an organic recovery.
And remove the impediments to hiring. We seem to ignore the law of supply and demand in the labor markets and then scratch our heads when there is a lot of unemployment.
- roghummal 11y ago>And remove the impediments to hiring. What're those?
- deleted 11y ago[deleted]
- stretchwithme 11y agoAnything that makes labor more expensive than the price the market is willing to pay. Government adds a lot of costs and even fixes the price of unskilled labor in the belief that these workers are benefiting. But if the total cost of labor is higher than employers are able to pay for labor, they won't hire. This is especially true in a downturn. If we want to assist these workers, it would be far better to help them directly instead of forcing employers to do it. We'd avoid distorting the market place and shutting a certain percentage out of it altogether.