3 ms·

It says interesting things about democracy that there is a government body with the explicit policy of driving prices up and wages down. Slowly enough that it d

• beaeglebeached 3y ago
  The fed was created in secret on Jekyll Island specifically because it wasn't supposed to be democratically transparent.
• sircastor 3y ago
  I think that’s a little misleading. Wages in this case are an indicator of inflation, and that’s what the federal reserve was trying to manage. It’s the same response presented anytime someone says let’s raise minimum wage to $25/hr. That works briefly, but then inflation pushes everything back up and you’re back to square one. This isn’t the Fed saying they want to slash wages so the average Joe can’t get ahead. They’re trying to make wages affordable for businesses so the economy continues to function. (I’m not advocating for this particular economic approach)
  • beaeglebeached 3y ago
    Sure. First pin interest at zero ensuring the richest can get priority access to nearly free borrowing. Then let housing prices explode and then ratchet them down with 30 year loans with negative real interest that owners will never give up Once the housing is blown away, reverse the policies until wages depress and you're left with serfs. It's the worst nightmare of free market gone wrong at the behest of a doubling down government. They've absolutely fucked us; we would have been better off left alone.
    • xtiansimon 3y ago
      “… nightmare of free market…government. […] …we would have been better off left alone.” Not a function of good government. _It’s just business_.
    • me_me_me 3y ago
      its easier to siphon money from middle class instead of creating something by investing money Except we are at the stage where middle class has no more money to be stole from by the rich. And with middle class living paycheck to paycheck they will soon find out the road is heading towards a cliff for everyone.
• Aunche 3y ago
  Apologies for being blunt, but this attitude is precisely why all central banks are run by unelected elite. Before you criticize monetary policy, you should at the very least read what the Fed has to say with in their entire context if you're not going to invest significant time learning about macroeconomics.
  • roenxi 3y ago
    The closest parallel I can see is inside the USSR or maybe China where obviously foolish policies were destroying wealth on a grand scale. Similarly there, you could make the same argument that the authorities were acting an a large and clever framework and there is a lot of context to understand before it can be critiqued. But that doesn't change the fact that the policies were frequently stupid and destructive, and the framework was - at best - a corrupt misunderstanding of reality that didn't help people get wealthy. It isn't on me to wade into a system that appears to have gone off the rails and find the internal inconsistencies on its terms. When policies are on the face of it stupid the defenders of that policy have to explain it with reference to evidence. In this case, as far as I can tell, they can't. It is just a transparent wealth grab organised by unelected elites.
    • Aunche 3y ago
      What policy at the face of it is stupid? Intentionally suppressing wages? Because that's clearly not what the Federal Reserve is intending if you read their statement with their full context. Since they increased interest rates, inflation adjusted wages went from negative to positive. The basics of monetary policy isn't hard to understand. If the economy contracts, you decrease interest rates. If inflation gets too high, you increase interest rates. This much is entirely uncontroversial.
      • rolling_st 3y ago
        I’d guess massive deficit spending funded in large part by central bank which did not have the cash? Which then artificially sets interest rates, etc. Hot take: Jerome Powell knows the current state is very bad and what he needs to do will be bad. He wants to have the guts to do it. Market/politicians will hate him. We’ll see if he can do it.
• benreesman 3y ago
  It's not quite that. Someone is going to manipulate if not outright control the money supply and the various subsidiaries of that river. And in principle, even quasi-elected and/or quasi-appointed governors of a quasi-public entity are subject to dramatically more scrutiny by full metal jacket elected officials than leaders in the private sector. The kind of tinker-toy reductio absurdum is a pure gold standard with a de Beers-style mineral cartel governance, for which there is ample precedent. In that event, do you want the CEOs of metal mining companies to determine the interest rates or ostensible public servants? The debt-originated, pure fiat, fractional reserve banking system is the highest performing one we know about under uncorrupted and competent leadership. It's got the highest peak output (existential proofs via natural experiment are abundant). But it is more easily corrupted and captured than other systems, which is a kind of hyper-fragility in the current broad-spectrum climate. I don't care if you call it a conspiracy or an emergent phenomenon or an unstable Nash equilibria symmetry group with spontaneous symmetry breaking state space regions: the outcomes at the moment are consistent with our society collectively deciding that its singular goal is to maximize the Gini Coefficient at any cost up to and including arbitrary human life and arbitrary damage to the planet. It tends to polarize people less and bring out less low-signal, one-bit tribalism if we collectivize the agency across everyone as a notational convenience as opposed to addressing the underlying class dynamics, so let's go with that: one way or another all of society is united in the pursuit of maximum wealth inequality, the fungibility of wealth into political capital, that power's use for the inducement of market failures that super-linearly increase this capture in a tight loop. Under that system it doesn't matter if Jerome Powell or Sam Blankman Fried are in charge of the availability of credit: they're going to turn the knobs the same way. The real shame of all this is that it's basically one person's fault and was avoidable. Karl Marx was a deeply insightful scholar in flashes of intuition, but not a rigorously analytical thinker, and he bundled a blindingly accurate forecast of the problems with a disastrously bad set of policy prescriptions, thereby tarnishing the good name of far better analysts who almost always get it right (Graeber comes to mind may he rest). It is in fact that case that in the presence of rapid compound GDP growth and loosely but consistently correlated technological advance that class dynamics become the whole show, but the totally collectivized command economy was never going to work.