6 ms·

Fed signals higher unemployment rate might be necessary to tame inflation

21 points by donsupreme 4y ago

deleted 4y ago
[deleted]
puffoflogic 4y ago
"The plebs think high prices are bad?! High prices?! Let's see how they like high prices and no job!" The end goal, of course, is serfdom under a government benefits system.
- kory 4y ago
  Have you ever considered that the FED just really doesn't know what it's doing? Their track record clearly shows they are shooting in the dark on every policy decision they make. The economy is an extremely volatile, unpredictable, and sensitive system. I doubt the grand conspiracy theories about the FED. As they say, "never attribute to malice what can be attributed to..."
  - andai 4y ago
    On the other hand, one might just as easily say "Never attribute to incompetence that which can be explained by corruption." In eastern europe this worldview is taken for granted, and is largely accurate. While the west seems less corrupt on many fronts, to a large degree people are just better at hiding it—instead of doing it out in the open, things are revealed years after the fact by whistleblowers.
  - beepbooptheory 4y ago
    Sure but thats not much better! Like either there is grand conspiratorial malice, total incompetence, or the classic 'actually, this is how its supposed to work'. Honestly a toss up to me which of these three is the worst. And I don't think my criticisms or diagnoses would change that much for any of them. I feel in fact that they are all probably true and connected. One person's incompetence probably stems from another's malice, which itself stems from the possible actions and consequences a given system provides and authorizes.
makerofspoons 4y ago
Unemployment is linked with mortality: https://www.weforum.org/agenda/2015/02/the-link-between-unemployment-and-suicide/ https://www.weforum.org/agenda/2015/02/the-link-between-unem... What they're really signaling is that they think people need to die.
- s1artibartfast 4y ago
  Real income is also linked with mortality, so there is obviously a tradeoff here. If prices go up, people will die. If unemployment goes up people will die. Economic wellbeing matters.
belltaco 4y ago
Bad title on HN. The article and it's title don't say anything like that. Current title on HN is 'Fed signals high unemployment rate is now “necessary” to tame inflation'.
- cyb_ 4y ago
  Actual article title is: "Higher Unemployment Rate Looms as the Fed Fights Inflation" Higher != High
- andai 4y ago
  The first sentence sentence of the article: "Federal Reserve officials are beginning to signal that higher unemployment rates might be a necessary consequence of their efforts to damp inflation by raising interest rates."
tootie 4y ago
That is a shamefully edited headline. The word used is "higher" not "high". Unemployment is near all-time lows. Having it creep to something in the 4-5% range is a completely acceptable price for lower inflation.
nawgz 4y ago
This rhetoric is crazy from the Fed; unemployment rate needs to go up, wages need to go down, but never a mention of all the unnecessarily printed money or obscene wealth inequality... How exactly are we in a position where the highest chairs of an ostensibly democratic society can just condemn the vast majority of the populace to a stressful, slave-like existence? It truly feels to me like the end game of the elite is being played out, and capitalism has become a caste system. Socioeconomic mobility is dead, and the flogging of those at the bottom isn't even disguised anymore.
- deleted 4y ago
  [deleted]
sophacles 4y ago
Wait - so unemployment is bad. Unless enough people have jobs, then it's good? I'm not going to claim I understand economics, what sort of voodoo nonsense is this?
- trynumber9 4y ago
  It's a simply consequence of their need to raise interest rates to control inflation. If you make it harder to get loans, businesses will reduce expansion plans which in turn causes an increase in unemployment. The goal is to balance the two and tame inflation without unemploying millions. I'm not sure how much of this was avoidable but it is the current state of the US economy.
  - sophacles 4y ago
    From what I can understand, it seems that this is only true if you consider increased wealth concentration the primary purpose of the economy.
- gruez 4y ago
  > Wait - so unemployment is bad. Unless enough people have jobs, then it's good? Is that surprising? eg. "Wait - so under-eating is bad. Unless you're overweight, then it's good?"
  - sophacles 4y ago
    I guess I'm trying to understand why we need some people to not have jobs, and also why the same people who say this fight so hard against helping folks in bad spots. If having unemployment is so important, why does everyone treat the unemployed as morally inferior - it's clearly a vital economic function. edit: to put it another way - (extending your metaphor) who is doing the eating of us normal workers? Why am I someone's food?
    - s1artibartfast 4y ago
      Nobody is excited about increasing unemployment, and you don't always need more unemployment to tame inflation. The idea is that in the specific current situation of inflation disaster, measures required to tame inflation maybe required. Like a infection, first line of defense is antibiotics, but if you wind up in a bad situation, you may need to take a more harmful response like amputation.
downrightmike 4y ago
If people having money is driving up costs, why not just go after the 600 billionaires rather than the millions of others?
- kqr 4y ago
  Because when you try to increase taxes on income and capital for the rich, the very rich always manage to loophole their way out of it and the middle class gets screwed over. Guess who votes?
  - candiodari 4y ago
    Plus the very rich, the ones meant here, don't represent a decent part of the total. What you will effectivly destroy, going after "income and capital for the rich", first and foremost, are pensions. That's where the majority of FANG (and other) profits go to: paying people's pensions.
    - kqr 4y ago
      I'm not sure I follow. Even if what you say is true, government with sovereign currencies can tax the capital and still pay out just as generous pensions. They just have to tax capital even harder to keep inflation at bay. No? Basically if you look at taxation as a way to destroy money, and then you focus taxation on things you want to discourage (too high concentration of capital, unhealthy habits, environmental impact, etc.) you can incentivise and disincentivise whatever you want.
favflam 4y ago
Instead of making poor people poorer, why not tackle some structural issues. Like, why does a poor person have to go into debt by 15K USD at 15% interest rate to buy a car just to work a job that pays 15-20USD/hr? This is financial lunacy. How can cities afford to service such spread out metro areas? The police have to burn fuel to cover everywhere. Why force stores in denser areas to have so much empty, ugly parking spaces? Why not let stores pick how much parking they want to have? We need a fleet of school buses to shuttle kids to schools. Why can't kids just ride a bicycle, walk, or talk a public bus? This is insane, especially in cities as dense as Miami. China has much better ROI on their people, infrastructure than the US. Density or no density, I don't see how the US stays competitive wasting so much money on fluff like gigantic SUVs and huge green lawns that serve no purpose other than some e-peen contest. I think more than anything, I am seeing a kind of defeatism in people defending this car-centric status quo. "This is the way it is, so it has to stay that way by force of law." Just let go...
- pfortuny 4y ago
  You do not need to go to China. Most of Europe (if not all) is totally different in that sense to the US. There are possibly some exceptions but not so many.
- bitxbitxbitcoin 4y ago
  One answer is that a poor person should not being buying a 15k USD car.
  - favflam 4y ago
    And how do poor people get to work? Most poor people cannot generate cash flow without a car, no? Cities de-prioritized non-car commuters decades ago. Shall the US re-prioritize non-car commuters?
    - bitxbitxbitcoin 4y ago
      A $5k car?
  - 4y ago
e67f70028a46fba 4y ago
HN: right about two of the last twelve rece… three of the last thirteen recessions…

21 points by donsupreme 4y ago

deleted 4y ago

[deleted]

"The plebs think high prices are bad?! High prices?! Let's see how they like high prices and no job!" The end goal, of course, is serfdom under a government benefits system.

kory 4y ago
Have you ever considered that the FED just really doesn't know what it's doing? Their track record clearly shows they are shooting in the dark on every policy decision they make. The economy is an extremely volatile, unpredictable, and sensitive system. I doubt the grand conspiracy theories about the FED. As they say, "never attribute to malice what can be attributed to..."
- andai 4y ago
  On the other hand, one might just as easily say "Never attribute to incompetence that which can be explained by corruption." In eastern europe this worldview is taken for granted, and is largely accurate. While the west seems less corrupt on many fronts, to a large degree people are just better at hiding it—instead of doing it out in the open, things are revealed years after the fact by whistleblowers.
- beepbooptheory 4y ago
  Sure but thats not much better! Like either there is grand conspiratorial malice, total incompetence, or the classic 'actually, this is how its supposed to work'. Honestly a toss up to me which of these three is the worst. And I don't think my criticisms or diagnoses would change that much for any of them. I feel in fact that they are all probably true and connected. One person's incompetence probably stems from another's malice, which itself stems from the possible actions and consequences a given system provides and authorizes.

makerofspoons 4y ago

Unemployment is linked with mortality: https://www.weforum.org/agenda/2015/02/the-link-between-unemployment-and-suicide/ https://www.weforum.org/agenda/2015/02/the-link-between-unem... What they're really signaling is that they think people need to die.

s1artibartfast 4y ago
Real income is also linked with mortality, so there is obviously a tradeoff here. If prices go up, people will die. If unemployment goes up people will die. Economic wellbeing matters.

belltaco 4y ago

Bad title on HN. The article and it's title don't say anything like that. Current title on HN is 'Fed signals high unemployment rate is now “necessary” to tame inflation'.

cyb_ 4y ago
Actual article title is: "Higher Unemployment Rate Looms as the Fed Fights Inflation" Higher != High
andai 4y ago
The first sentence sentence of the article: "Federal Reserve officials are beginning to signal that higher unemployment rates might be a necessary consequence of their efforts to damp inflation by raising interest rates."

tootie 4y ago

That is a shamefully edited headline. The word used is "higher" not "high". Unemployment is near all-time lows. Having it creep to something in the 4-5% range is a completely acceptable price for lower inflation.

nawgz 4y ago

This rhetoric is crazy from the Fed; unemployment rate needs to go up, wages need to go down, but never a mention of all the unnecessarily printed money or obscene wealth inequality... How exactly are we in a position where the highest chairs of an ostensibly democratic society can just condemn the vast majority of the populace to a stressful, slave-like existence? It truly feels to me like the end game of the elite is being played out, and capitalism has become a caste system. Socioeconomic mobility is dead, and the flogging of those at the bottom isn't even disguised anymore.

deleted 4y ago
[deleted]

sophacles 4y ago

Wait - so unemployment is bad. Unless enough people have jobs, then it's good? I'm not going to claim I understand economics, what sort of voodoo nonsense is this?

trynumber9 4y ago
It's a simply consequence of their need to raise interest rates to control inflation. If you make it harder to get loans, businesses will reduce expansion plans which in turn causes an increase in unemployment. The goal is to balance the two and tame inflation without unemploying millions. I'm not sure how much of this was avoidable but it is the current state of the US economy.
- sophacles 4y ago
  From what I can understand, it seems that this is only true if you consider increased wealth concentration the primary purpose of the economy.
gruez 4y ago
> Wait - so unemployment is bad. Unless enough people have jobs, then it's good? Is that surprising? eg. "Wait - so under-eating is bad. Unless you're overweight, then it's good?"
- sophacles 4y ago
  I guess I'm trying to understand why we need some people to not have jobs, and also why the same people who say this fight so hard against helping folks in bad spots. If having unemployment is so important, why does everyone treat the unemployed as morally inferior - it's clearly a vital economic function. edit: to put it another way - (extending your metaphor) who is doing the eating of us normal workers? Why am I someone's food?
  - s1artibartfast 4y ago
    Nobody is excited about increasing unemployment, and you don't always need more unemployment to tame inflation. The idea is that in the specific current situation of inflation disaster, measures required to tame inflation maybe required. Like a infection, first line of defense is antibiotics, but if you wind up in a bad situation, you may need to take a more harmful response like amputation.

downrightmike 4y ago

If people having money is driving up costs, why not just go after the 600 billionaires rather than the millions of others?

kqr 4y ago
Because when you try to increase taxes on income and capital for the rich, the very rich always manage to loophole their way out of it and the middle class gets screwed over. Guess who votes?
- candiodari 4y ago
  Plus the very rich, the ones meant here, don't represent a decent part of the total. What you will effectivly destroy, going after "income and capital for the rich", first and foremost, are pensions. That's where the majority of FANG (and other) profits go to: paying people's pensions.
  - kqr 4y ago
    I'm not sure I follow. Even if what you say is true, government with sovereign currencies can tax the capital and still pay out just as generous pensions. They just have to tax capital even harder to keep inflation at bay. No? Basically if you look at taxation as a way to destroy money, and then you focus taxation on things you want to discourage (too high concentration of capital, unhealthy habits, environmental impact, etc.) you can incentivise and disincentivise whatever you want.

favflam 4y ago

Instead of making poor people poorer, why not tackle some structural issues. Like, why does a poor person have to go into debt by 15K USD at 15% interest rate to buy a car just to work a job that pays 15-20USD/hr? This is financial lunacy. How can cities afford to service such spread out metro areas? The police have to burn fuel to cover everywhere. Why force stores in denser areas to have so much empty, ugly parking spaces? Why not let stores pick how much parking they want to have? We need a fleet of school buses to shuttle kids to schools. Why can't kids just ride a bicycle, walk, or talk a public bus? This is insane, especially in cities as dense as Miami. China has much better ROI on their people, infrastructure than the US. Density or no density, I don't see how the US stays competitive wasting so much money on fluff like gigantic SUVs and huge green lawns that serve no purpose other than some e-peen contest. I think more than anything, I am seeing a kind of defeatism in people defending this car-centric status quo. "This is the way it is, so it has to stay that way by force of law." Just let go...

pfortuny 4y ago
You do not need to go to China. Most of Europe (if not all) is totally different in that sense to the US. There are possibly some exceptions but not so many.
bitxbitxbitcoin 4y ago
One answer is that a poor person should not being buying a 15k USD car.
- favflam 4y ago
  And how do poor people get to work? Most poor people cannot generate cash flow without a car, no? Cities de-prioritized non-car commuters decades ago. Shall the US re-prioritize non-car commuters?
  - bitxbitxbitcoin 4y ago
    A $5k car?
- 4y ago

e67f70028a46fba 4y ago

HN: right about two of the last twelve rece… three of the last thirteen recessions…