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Reminds me of a comment I think by Nancy Teeters the first female Federal Reserve board member. She said the other board members thought they could savage the U

• seg_lol 11mo ago
  Sociopaths. It breaks me to see the Fed use interest rates to cause unemployment as the lever against inflation. It all seems so cruel.
  • zahlman 11mo ago
    They use interest rates to protect against inflationary (and deflationary) spirals, which are known to be devastating. The effect on the unemployment rate is a known, and predictable, side effect. But formal unemployment is small compared to labour force dropout anyway, and the latter is not necessarily so sensitive to economic conditions anyway. Besides which, the unemployment rate can't really keep going down forever. Zoom out; recent levels are actually quite impressive in the USA. Yes, they've climbed since 2023, but they're only just reaching the pre-GFC minimum (https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm https://www.bls.gov/charts/employment-situation/civilian-une...). Zoom out further: https://fred.stlouisfed.org/series/UNRATE/ https://fred.stlouisfed.org/series/UNRATE/ Had it not been for COVID you'd be at more than 16 years without a(n NBER-determined) recession, long enough to suggest a fundamental shift vs. how things worked in the several decades before that.
    • clcaev 11mo ago
      Yet the average household seems weaker now than 16 years ago. Perhaps policy guided by this metric could use rethinking.
      • dragonwriter 11mo ago
        Your observation is about distributional characteristics of the economy which, in terms of policy, are addressed by fiscal policy and not monetary policy; the former remains in the hands of Congress and the President without delegation to the Federal Reserve, which has been given only a narrow set of tools adapted to and a mission related to broad aggregate performance.
      • ls612 11mo ago
        The median household income is higher today in real terms than it was in 2008.
  • ericd 11mo ago
    Have you ever read about people burning piles of German currency because it was better than using it to buy firewood with? Not to say we would get there, but allowing inflation to run is not kinder.
    • inferiorhuman 11mo ago
      I think these days folks typically use Zimbabwe or Argentina as examples.
      • brobdingnagians 11mo ago
        Those are more recent examples, but I think Germany is still a more visceral example for a lot of Western nations because Germany was a high tech, educated industrial nation that was hit with such massive problems from government policy. It's closer to home. Other countries are (wrongfully) easier to dismiss as being just too different from our wealthy and enlightened selves.
        • ericd 11mo ago
          Also, Germany was a great power seriously challenging the greatest power of the time, the British Empire. They fell a lot further than those other examples.
        • Gibbon1 11mo ago
          People get confused the hyper inflation in Germany was right after the end of WWI when Germany's economy was collapsing. Turns out you can't fix that with monetary policy. A point. Economists like people to believe that hyper inflation lead to Hitler. When it was austerity policies at the start of the great depression 10 years later that lead to the Nazi's winning in 33. Same austerity policies in the US lead to FDR and the Democrats winning.
        • inferiorhuman 11mo ago
          Unfortunately we're looking more like Hogan's Heroes than Germany. Both Zimbabwe and Argentina (and, quite frankly, Venezuela) were well developed before they went down the road of disastrous policies.
  • rcxdude 11mo ago
    Unemployement is a necessary part of the economy, what is cruel is making unemployment unlivable.
• inopinatus 11mo ago
  From the other side of the Atlantic this sounds like straight Thatcherism, in which Chicago-school monetarism was an ideological anti-union weapon, and the Thatcher cabinet was not coy about it. However I think the US went that way first even if Reaganomics came later.
  • scrps 11mo ago
    I think a lot of that in the US got spun up with Nixon, Reagan brought a lot of it to the mainstream though. Both of them hated unions with a passion that is for sure.
    • johnebgd 11mo ago
      Unions are the best of all the bad solutions we’ve come up with so far for labor to compete with capital. The worst of course is collectivism through government, though that’s being tried again…
      • AnthonyMouse 11mo ago
        The best solution is antitrust enforcement and removal of anti-competitive laws/rules lobbied for by incumbents. When companies have to compete with each other for labor and customers, wages go up and prices go down. Whey they consolidate they can charge monopoly rents. Unions often even make this worse because they'll latch on to a monopolistic employer and then lobby with them to retain the monopoly at the expense of all the workers who are their customers rather than their employees.
        • varispeed 11mo ago
          > removal of anti-competitive laws/rules lobbied for by incumbents. If even if there are such ideas in new government, they quickly disappear over wine and steak dinners with the lobbyists. Unfortunately this is not seen as bypass of democratic process. Nobody voted for having less rights and any bargaining power stripped and yet here we are. That's where security services should come in (in many countries protection of democracy is their main statutory duty) - but they are not doing their job tax payers pay them to do.
• trashface 11mo ago
  FWIW Teeters was apparently one of the more dovish from that era and didn't think the high rates were a great idea: “You are pulling the financial fabric of this country so tight that it’s going to rip...once you tear a piece of fabric, it’s very difficult, almost impossible, to put it back together again.” An analogy which she also said none of the men understood because they had never sewn anything