The FED is about to raise interest rates and shaft American workers – again
Robert Reich — Sun 6 Feb 2022 01.00 EST
- Policymakers fear a labor shortage is pushing up wages and prices. Wrong. Real wages are down and workers are struggling
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Fed policymakers are poised to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices – and that this wage-price spiral could get out of control.
It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage.
There’s no “wage-price spiral” either, even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices. To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.
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It’s a fact of life the at the FED’s 2% inflation target is a joke. The FED has debased the currency of 99% of its value with its “2% target”! But over and above that, the inflation has been robbing poor people, working slobs, and senior citizens on fixed income.
So maybe a good liberal like Reich might be enlisted into the “End The Fed” movement.
IMHO we need to go back to “real money” aka gold and silver.
Under hard money, prices go down and real wages go up naturally.