5 ms·

The war on wages is being waged (? is that the same word?) by the Fed. Companies just follow.

by kika 4y ago

MikeTheGreat 4y ago
It is the same spelling of the word, but the first is a noun and the second is a verb. Yay for homonyms :) If you want to avoid repeating that word you could go with "The ware on wages is being conducted by..." I'm sure there's other, equally good ways to phrase this, too.
datavirtue 4y ago
Winner.
bko 4y ago
That's a good point. Few people realize that a big part of fighting inflation is getting wages down. Jerome Powell said as much in an interview in May of last year: > So in principle, it seems as though, by moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially. So there’s a path to that. [0] To be fair, much of the wage inflation (particularly in FAANG) was also led by an easy money policy. I take issue with heavy handed manipulation of the money supply that leads to these weird dynamics. I've written about it before [1] that a big risk is ever growing Fed power in the form of heavier regulation or a digital currency. Imagine someone can flip a switch and decide that everyone earning above $X will take a pay cut to fight inflation, all without any oversight or judicial proceeding. [0] https://www.wsj.com/articles/transcript-fed-chief-powells-postmeeting-press-conference-11651696613 https://www.wsj.com/articles/transcript-fed-chief-powells-po... [1] https://mleverything.substack.com/p/inflation-and-government-digital https://mleverything.substack.com/p/inflation-and-government...
- kika 4y ago
  Not just Powell, every Fed kept talking about "we don't want to repeat history". What they meant is 1970-1979, when they were beating down the economy for a decade and when they decided to let the pressure go, inflation went right back where it was before the beating. Because the wages were still up and with the power of the unions it was very difficult to bring them down. At least that's how it was explained to me by a stock market expert. So until we give up our fat checks from FAANG they will keep beating FAANG down. I dunno, fuck them maybe? But the same expert told me many times: do not play against the Fed.
  - dmix 4y ago
    The top end company stock prices are just like real estate, the money experts always use them to reduce the entire economy to simple terms and over-generalize. If our only two options are the Fed or FAANG winning I choose neither. The macro market (and their truthsayers) are obsessed with reducing things to the [current price] of public companies. Even though there is never ending increasing disconnect between their stock prices and the long term value they generate for the broader markets. The more we gamble on those small sets of metrics being the "truth" from which to guide society the more we (see: gov and media) will adapt to protect and push them higher.
    - ClumsyPilot 4y ago
      > The top end company stock prices are just like real estate, the money experts Anyone celebrating expensive real estate is celebrating destruction of our economy. Real estate is an economic input, same as food and fuel. When those get expensive, it is understood that it will lead to widespread misery and poverty. The people that make money off sitting on real contribute nothong, they should be treated the same way. assomeone who'd make money from hoarding canned tuna.
  - roncesvalles 4y ago
    That implies there's some unspoken understanding among CFOs that the Fed won't ease up until tech salaries go down, and that requires layoffs.

The war on wages is being waged (? is that the same word?) by the Fed. Companies just follow.

by kika 4y ago

The war on wages is being waged (? is that the same word?) by the Fed. Companies just follow.

It is the same spelling of the word, but the first is a noun and the second is a verb. Yay for homonyms :) If you want to avoid repeating that word you could go with "The ware on wages is being conducted by..." I'm sure there's other, equally good ways to phrase this, too.

datavirtue 4y ago

Winner.

bko 4y ago

That's a good point. Few people realize that a big part of fighting inflation is getting wages down. Jerome Powell said as much in an interview in May of last year: > So in principle, it seems as though, by moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially. So there’s a path to that. [0] To be fair, much of the wage inflation (particularly in FAANG) was also led by an easy money policy. I take issue with heavy handed manipulation of the money supply that leads to these weird dynamics. I've written about it before [1] that a big risk is ever growing Fed power in the form of heavier regulation or a digital currency. Imagine someone can flip a switch and decide that everyone earning above $X will take a pay cut to fight inflation, all without any oversight or judicial proceeding. [0] https://www.wsj.com/articles/transcript-fed-chief-powells-postmeeting-press-conference-11651696613 https://www.wsj.com/articles/transcript-fed-chief-powells-po... [1] https://mleverything.substack.com/p/inflation-and-government-digital https://mleverything.substack.com/p/inflation-and-government...

kika 4y ago
Not just Powell, every Fed kept talking about "we don't want to repeat history". What they meant is 1970-1979, when they were beating down the economy for a decade and when they decided to let the pressure go, inflation went right back where it was before the beating. Because the wages were still up and with the power of the unions it was very difficult to bring them down. At least that's how it was explained to me by a stock market expert. So until we give up our fat checks from FAANG they will keep beating FAANG down. I dunno, fuck them maybe? But the same expert told me many times: do not play against the Fed.
- dmix 4y ago
  The top end company stock prices are just like real estate, the money experts always use them to reduce the entire economy to simple terms and over-generalize. If our only two options are the Fed or FAANG winning I choose neither. The macro market (and their truthsayers) are obsessed with reducing things to the [current price] of public companies. Even though there is never ending increasing disconnect between their stock prices and the long term value they generate for the broader markets. The more we gamble on those small sets of metrics being the "truth" from which to guide society the more we (see: gov and media) will adapt to protect and push them higher.
  - ClumsyPilot 4y ago
    > The top end company stock prices are just like real estate, the money experts Anyone celebrating expensive real estate is celebrating destruction of our economy. Real estate is an economic input, same as food and fuel. When those get expensive, it is understood that it will lead to widespread misery and poverty. The people that make money off sitting on real contribute nothong, they should be treated the same way. assomeone who'd make money from hoarding canned tuna.
- roncesvalles 4y ago
  That implies there's some unspoken understanding among CFOs that the Fed won't ease up until tech salaries go down, and that requires layoffs.