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> This seems more like an attempt to strangle wage increases. It is that and more. There aren't many levers to pull but one that is available is interest rates

> This seems more like an attempt to strangle wage increases. It is that and more. There aren't many levers to pull but one that is available is interest rates which in a kludgy way allows you to slow down investment in businesses which in turn results in preventing wage increases, hiring, and eventually results in an increase in terminations or eliminating positions. Less money going to workers means less money can be spent in the economy and less demand for goods and services. Inflation then drops or depending on severity bursts some bubbles and enters into a deflationary period. So yes the whole point is to cause painful decreases or elimination of wages.

krageon 4y ago
You're arguing for trickle down economics, which is a hilarious fantasy made up by very rich people so they have an excuse to dodge taxes. Nothing says that less investment in business means preventing wage increases or anything else you've mentioned.
- throwaway4aday 4y ago
  That is not trickle down economics. If you make it harder to do business by making loans more expensive then businesses will slow growth or make cuts. Slowing growth means you hire less and cost cuts usually involve eliminating personnel. Do that on a large scale and you increase unemployment and high unemployment produces an atmosphere in which people become more bearish and spend less thus eventually reducing inflation. This isn't the first time we've done this but since you aren't clear on the definition of trickle down economics I don't expect you to know that.
simonh 4y ago
People are going to get hurt whatever you do. Inflation driving up wages is going to suppress investment and hurt jobs as well. Arguably increasing interest rates suppresses all forms of investment, and thus demand. High wage increases not only directly feedback loops into higher inflation due to higher labour costs, but also specifically hits employment.
- throwaway4aday 4y ago
  Yes, I'm not saying they're doing the wrong thing. I was explaining why the parent comment was wrong to gripe about wages since that's the whole point.

krageon 4y ago

You're arguing for trickle down economics, which is a hilarious fantasy made up by very rich people so they have an excuse to dodge taxes. Nothing says that less investment in business means preventing wage increases or anything else you've mentioned.

throwaway4aday 4y ago
That is not trickle down economics. If you make it harder to do business by making loans more expensive then businesses will slow growth or make cuts. Slowing growth means you hire less and cost cuts usually involve eliminating personnel. Do that on a large scale and you increase unemployment and high unemployment produces an atmosphere in which people become more bearish and spend less thus eventually reducing inflation. This isn't the first time we've done this but since you aren't clear on the definition of trickle down economics I don't expect you to know that.

simonh 4y ago

People are going to get hurt whatever you do. Inflation driving up wages is going to suppress investment and hurt jobs as well. Arguably increasing interest rates suppresses all forms of investment, and thus demand. High wage increases not only directly feedback loops into higher inflation due to higher labour costs, but also specifically hits employment.

throwaway4aday 4y ago
Yes, I'm not saying they're doing the wrong thing. I was explaining why the parent comment was wrong to gripe about wages since that's the whole point.