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A BeLabored Point
In his pivotal Jackson Hole address, Jerome Powell said that in his view, it "seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon."
That sentence presaged what quickly became the speech's most oft-cited line: The Fed, Powell went on, does "not seek or welcome further cooling in labor market conditions."
And just like that, the Fed had adopted a de facto single mandate, this time focused on jobs. For two years, the Fed actively sought a softer (
In an alternate universe you might see increasing interest rates to combat inflation as a roundabout way to get win. Inflation can be caused by so many different and varying factors: Supply Chain snarls or snarks take your pick, increasing costs of inputs, lack of competition etc ad infinitum. Increasing wages usually are a follow on effect not a causation. I imagine myself walking into the boss’s office and saying Bro I need a raise. Why? Cause Inflation brah. Haven’t you heard? Someone somewhere had suggested creating an inflation fund for essentials that the average person uses. Groceries for example. You could directly deduct the cost of eggs from 5.99 per dozen to say 2.00 per dozen simply by swiping a “Inflation Card”. The Card could be given based on annual income over the last 2 years as an example. Or you could just helicopter the money directly into bank accounts. The problem with heli money is it might create inflation in unexpected and speculative “assets” like crypto. The Card way to fight inflation implies that wages don’t need to rise or not rise as much. And therefore the Insurance company cannot jack up prices for car insurance and claim they’re doing so because “increasing wages”. Instead think about what we do. We increase interest rates. And the jokes just write themselves.
The American polity’s contradiction is best captured through capitalists pretending to be laborists most notably on the right. This is best represented by the old adage of “pulling yourself up by your bootstraps” that many on the right pretend to espouse to make themselves appear to be middle class. If you look at the background and education of most of the right wing congress their life experience isn’t even close to middle class so instead they embrace these euphemisms to fool people into thinking they are aligned. These bootstrap pullers will espouse labor being a priority and how much they love “small business” (the backbone of America and such). But in reality they vote and write polices that alway favor Capital over Labor and thus reveal what Capitalists truly value (Capital itself). The fact that the Supreme Court, who must have seen an opportunity in the Citizens United ruling for their backchannel favors to themselves, says Capital can be considered “people” makes this whole scenario and easy playbook. While these same people espouse laborist euphemisms they attack the party that most aligns with labor as “socialists” (as if bailing out and giving tax breaks to corporations isn’t socialism). This post has me pondering a new strategy that democrats may want to lean into. Flip the “socialists” slander on its head and instead subscribe themselves to be laborists. Most voters are in fact laborers and the pain that the right plays these voters on are in fact the Labor/Capital divide that has disenfranchised most of them for the past 50 years. Labor really doesn’t have an official party in the US (unlike in the UK) and since the GOP is the party of Capital it only makes sense for Democrats to make themselves the party of Labor.