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Yes, that is exactly the dual mandate at work. Too tight a labor market causes labor price inflation, which quickly causes general price inflation, eroding the
by wpietri 4y ago
Yes, that is exactly the dual mandate at work. Too tight a labor market causes labor price inflation, which quickly causes general price inflation, eroding the value of the higher wages and causing all sorts of other problems. None of that is proof that their goal is to "force savers into riskier assets".
And I'd say the difference is absolutely meaningful, because people have moral agency. People have "incentives" to do all sorts of harmful things. But we can still expect them to make good choices, and to own it when they make bad ones.
As an example, take FTX and Sam Bankman-Fried. He clearly had plenty of incentives to do what he did. That doesn't make what he did any less wrong. Indeed, morals that only applied when one had no incentive to act against them would be meaningless. It's exactly when the incentives favor harmful actions that morals most matter.
- emodendroket 4y agoI can’t really agree that investing in a financially unsound business is “immoral.” I’d also point out that in that story the Fed is fretting about high employment in spite of prices beginning to stabilize, so I think maybe “Political Aspects of Full Employment” would be a more useful tract to read to understand the dynamics at work than “what the Fed does in simple English.”
- wpietri 4y agoYou're welcome to argue that investing one's own money badly is not immoral, just dumb. But there are other people involved here, and it's surprising to me they have escaped your notice.