This Kato, Fed Chair exchange reads like a sketch from SNL. Milton Friedman? Really? Why not find out if any of Pinochet relatives are available to run things.
As I understand it in my non-economic taught way, the point of raising interest rates is to lower spending by making spending more expensive. It raises income of net lenders, and lowers income of net borrowers. The burden falls more on those who are barley getting by on what they make, or are in very interest rate sensitive jobs. Couldn't we remove money used for spending out of the economy by burdening those with the most money? Say by raising the top income tax rate? Somehow this is never discussed.
"CATO: It’s still pretty easy for people to find a job, and wages keep rising. Doesn’t that make your job harder?
POWELL: It does. We are trying to bring the labor market into “better balance.” The recent increase in labor force participation was welcome, and it’s important for society that we have a strong labor market. But we think it’s too strong at the moment. We’re trying to change that."
In other words, the Fed is going to war against workers.
I like the exchange
Thanks so much for posting. I liked the exchange, too, especially the last bit about “be prepared to change your views in light of the evidence.” 😉
"Why did everyone forget their Milton Friedman?"
Umm...because reality intervened?
This Kato, Fed Chair exchange reads like a sketch from SNL. Milton Friedman? Really? Why not find out if any of Pinochet relatives are available to run things.
So in other words, as we already knew, unless they get rates to 20% and create a crash to generate joblessness they won’t be happy.. great news! 🎉🙃
As I understand it in my non-economic taught way, the point of raising interest rates is to lower spending by making spending more expensive. It raises income of net lenders, and lowers income of net borrowers. The burden falls more on those who are barley getting by on what they make, or are in very interest rate sensitive jobs. Couldn't we remove money used for spending out of the economy by burdening those with the most money? Say by raising the top income tax rate? Somehow this is never discussed.
“Ugh, regulation,” paraphrased or not, should be on Cato’s letterhead.
This is so good, thank you. :)
"We're not fans of fiat money . . . ."
"We like cryptocurrencies."
I think I followed a conversation on Twitter that included this guy. Pretty sure he was posting from his parents basement. ;-)
"CATO: It’s still pretty easy for people to find a job, and wages keep rising. Doesn’t that make your job harder?
POWELL: It does. We are trying to bring the labor market into “better balance.” The recent increase in labor force participation was welcome, and it’s important for society that we have a strong labor market. But we think it’s too strong at the moment. We’re trying to change that."
In other words, the Fed is going to war against workers.
It’s amazing this isn’t getting the outrage it deserves in the media 😒
Breaking the expectations of the little guy
https://shar.es/afvNf5
For all of Powell's misgivings, he didn't cave to everything CATO was trying to get him to!
I couldn't help but laugh out loud when I read "what about Milton Friedman?".
Really enjoying this stuff!