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(Washington Post)   Federal Reserve Chair Jerome H. Powell: Our God-King has decreed that unemployment under his reign is a good and worthy thing and so we shall therefore no longer consider it when deciding on rate adjustments   (washingtonpost.com) divider line
    More: Facepalm, Monetary policy, Inflation, Unemployment, Central bank, Great Recession, interest rates, Fed leaders, central bank  
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890 clicks; posted to Politics » on 27 Aug 2020 at 2:01 PM (8 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



36 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2020-08-27 11:37:03 AM  
Government policy is being disconnected from real life and tailored to the economy of rich people. Enjoy your MAGA.
 
2020-08-27 1:11:54 PM  
Wouldn't this be bad for him?  He wants rates low to keep juicing the economy, and the economy looks better if you discount the massive unemployment rate. So the rates should go up.
 
2020-08-27 1:20:28 PM  

EvilEgg: Wouldn't this be bad for him?  He wants rates low to keep juicing the economy, and the economy looks better if you discount the massive unemployment rate. So the rates should go up.


That's only if you insist on connecting those two things.  Looking at them separately makes it look so much better.
 
2020-08-27 1:21:22 PM  
he's gonna get a MAGA tattoo on his face in prison
 
2020-08-27 2:02:23 PM  
Federal job guarantee.
 
2020-08-27 2:03:15 PM  

vudukungfu: he's gonna get a MAGA tattoo on his face in prison


So a giant bellend on his cheek?
 
2020-08-27 2:04:50 PM  
He pretty much said the opposite of subby's headline, but OK.
 
2020-08-27 2:05:34 PM  
the Fed is keeping rates low for maximum employment at the risk of higher inflation.  its dual mandate is now a singular mandate until inflation is a problem.  ...or until the next fed chair is placed and that person is a sycophant and Trump is still calling the shots (i really hope this aint the reality).  if that happens then be prepared for a $500 loaf of wonderbread.

Powell is no sycophant.
 
2020-08-27 2:07:17 PM  
We have a federal government right now that is guiding the mega-rich and corporations to lie through a depression by pretending it doesn't exist, even as people lose jobs and homes by the millions with no end in sight.

Basically Wall St. has turned from a delayed reaction of a recession to a tool used to lie about one.
 
2020-08-27 2:07:49 PM  

Manfred J. Hattan: He pretty much said the opposite of subby's headline, but OK.


oh good someone else RTFA.
 
2020-08-27 2:08:05 PM  

edmo: Government policy is being disconnected from real life and tailored to the economy of rich people. Enjoy your MAGA.


Well mainlining sugar to the STONKS is all that mattered.
 
2020-08-27 2:09:59 PM  
Remember stagflation of the 70's?

High unemployment and high inflation is a contradiction of economic terms but yet it happens.

So we have now low inflation but high unemployment.

Inflation is one tool of the Fed can use to ease debt.

And they are signaling that is the course they are going to take.
 
2020-08-27 2:10:56 PM  
Letting inflation take hold in the face of a continuing recession and high unemployment has a name, kids.

Stagflation.

It's an economic nightmare of a Catch-22 and an awful idea to allow it to build.
 
2020-08-27 2:11:00 PM  

severedtoe: the Fed is keeping rates low for maximum employment at the risk of higher inflation.  its dual mandate is now a singular mandate until inflation is a problem.  ...or until the next fed chair is placed and that person is a sycophant and Trump is still calling the shots (i really hope this aint the reality).  if that happens then be prepared for a $500 loaf of wonderbread.

Powell is no sycophant.


AOC was tweeting about the relationship between rates and inflation earlier. I didn't really follow it because LOL bartender. AMIRITE!?
 
2020-08-27 2:11:29 PM  

edmo: Government policy is being disconnected from real life and tailored to the economy of rich people. Enjoy your MAGA.


The only real option the money has at this point is to bomb us. That's where this will wind up. You can't have this kind of unemployment, the kind of pain and suffering that is about to come down the pike, especially if Trump "wins" the election, and not have a direct violent physical conflict with the people who's kids you are starving.

It sounds like hyperbole but it's happened before.
I was watching something on the Blair Mountain thing with the miners
https://en.wikipedia.org/wiki/Battle_​o​f_Blair_Mountain
sure there were labor reforms and the rise of unions. But the miners lost is the takeaway.
I've always said we can fight the power and fight oppression with small arms. I never said our chances were good. Especially if they're willing to bomb us.

And well, they have always proven willing when push comes to shove. That is their economics. There's no economics when it comes to starvation, for the people starving. That conflict is, given things go the same way, inevitable.
Fortunately time is on our side in a low-intensity conflict. Enough people feel the pain, we'll have enough people on our side and we'll be able to change the "piss on our heads and tell us it's just rain" policies.
 
2020-08-27 2:13:48 PM  
This is also explicitly saying that any $ people have saved or in something like T-bills or a money market account is going to lose real value.

This is getting the market hooked on cheap meth because they can't afford the good shiat like coke anymore.
 
2020-08-27 2:23:50 PM  

Subtonic: severedtoe: the Fed is keeping rates low for maximum employment at the risk of higher inflation.  its dual mandate is now a singular mandate until inflation is a problem.  ...or until the next fed chair is placed and that person is a sycophant and Trump is still calling the shots (i really hope this aint the reality).  if that happens then be prepared for a $500 loaf of wonderbread.

Powell is no sycophant.

AOC was tweeting about the relationship between rates and inflation earlier. I didn't really follow it because LOL bartender. AMIRITE!?


Economics is called the dismal science for a reason.  Its weird because it doesn't follow its own rules.  i chalk that up to how much we just don't understand how it works..... For example, up until the 1980's it was widely accepted that deficit spending would lead to rampant inflation.  Then, we got into the 21st century and that whole notion has been proven wrong.  we have been running deficits like crazy and have barely met the inflation targets typical for an expanding economy.

the flow of money through the global economy is interesting.  i see equities as being the low ground where money pools and cannot escape unless its pumped back into the economy through artificial means.
 
2020-08-27 2:26:37 PM  
This headline is literally the exact opposite of what he said, which is that they'll tolerate increasing inflation in the medium term if it looks to be reducing unemployment.

This is all based on old macroeconomic trends postulated in the 20s that haven't appeared to function as theorized since the early 70s, so I guess we'll see how well this works.
 
2020-08-27 2:27:43 PM  

severedtoe: Subtonic: severedtoe: the Fed is keeping rates low for maximum employment at the risk of higher inflation.  its dual mandate is now a singular mandate until inflation is a problem.  ...or until the next fed chair is placed and that person is a sycophant and Trump is still calling the shots (i really hope this aint the reality).  if that happens then be prepared for a $500 loaf of wonderbread.

Powell is no sycophant.

AOC was tweeting about the relationship between rates and inflation earlier. I didn't really follow it because LOL bartender. AMIRITE!?

Economics is called the dismal science for a reason.  Its weird because it doesn't follow its own rules.  i chalk that up to how much we just don't understand how it works..... For example, up until the 1980's it was widely accepted that deficit spending would lead to rampant inflation.  Then, we got into the 21st century and that whole notion has been proven wrong.  we have been running deficits like crazy and have barely met the inflation targets typical for an expanding economy.

the flow of money through the global economy is interesting.  i see equities as being the low ground where money pools and cannot escape unless its pumped back into the economy through artificial means.


Pfft. Now you sound like a bartender.
 
2020-08-27 2:29:39 PM  
So what should I do with the 4 grand I've got saved up? Keep it in the bank, or just go "fark it" and commission a shiatload of furry porn.
 
2020-08-27 2:31:21 PM  
Some economists are concerned that keeping rates low and setting the expectation that they will stay that way could undermine the effectiveness of those tools and make it harder for inflation to climb.

I dont follow this.  Setting the expectation that interest rates will stay continually low should accelerate the money flow even further because doing long term planning you can absorb more debt than you normally would (less debt costs) thus borrowing and spending more than you would have.
 
2020-08-27 2:33:06 PM  

severedtoe: Manfred J. Hattan: He pretty much said the opposite of subby's headline, but OK.

oh good someone else RTFA.


Another "false headline" acting like a "joke"
 
2020-08-27 2:35:31 PM  

Scythed: This headline is literally the exact opposite of what he said, which is that they'll tolerate increasing inflation in the medium term if it looks to be reducing unemployment.

This is all based on old macroeconomic trends postulated in the 20s that haven't appeared to function as theorized since the early 70s, so I guess we'll see how well this works.


I'm not seeing anything alarming here, either. Sounds like a competent agency reevaluating their models based on new data. Namely, that one of the longest economic recoveries in American history combined with low interest rates didn't result in high inflation.
 
2020-08-27 2:49:11 PM  

Minor Catastrophe: Remember stagflation of the 70's?

High unemployment and high inflation is a contradiction of economic terms but yet it happens.

So we have now low inflation but high unemployment.

Inflation is one tool of the Fed can use to ease debt.

And they are signaling that is the course they are going to take.


But on the plus side, my old WIN button will be relevant again.
 
2020-08-27 3:02:51 PM  

Mitt Romneys Tax Return: Scythed: This headline is literally the exact opposite of what he said, which is that they'll tolerate increasing inflation in the medium term if it looks to be reducing unemployment.

This is all based on old macroeconomic trends postulated in the 20s that haven't appeared to function as theorized since the early 70s, so I guess we'll see how well this works.

I'm not seeing anything alarming here, either. Sounds like a competent agency reevaluating their models based on new data. Namely, that one of the longest economic recoveries in American history combined with low interest rates didn't result in high inflation.


I agree. Most people are concerned about runaway inflation. My concern is that they're already at 0% and QE historically has not been particularly effective at stoking employment growth and may be exacerbating income inequality.
 
2020-08-27 3:13:06 PM  

Scythed: Mitt Romneys Tax Return: Scythed: This headline is literally the exact opposite of what he said, which is that they'll tolerate increasing inflation in the medium term if it looks to be reducing unemployment.

This is all based on old macroeconomic trends postulated in the 20s that haven't appeared to function as theorized since the early 70s, so I guess we'll see how well this works.

I'm not seeing anything alarming here, either. Sounds like a competent agency reevaluating their models based on new data. Namely, that one of the longest economic recoveries in American history combined with low interest rates didn't result in high inflation.

I agree. Most people are concerned about runaway inflation. My concern is that they're already at 0% and QE historically has not been particularly effective at stoking employment growth and may be exacerbating income inequality.


That's because all the Fed can do is supply money. They can't make anyone borrow it, even at low rates, and use it to hire people. The purpose of a businesses is to make money. The problem is that government relies on business to employ people, and that is not actually what business is for.
 
2020-08-27 3:13:37 PM  
Translation: get use to +10% unemployment, 'cause it gonna be here for awhile...
 
2020-08-27 3:21:50 PM  

Minor Catastrophe: Remember stagflation of the 70's?

High unemployment and high inflation is a contradiction of economic terms but yet it happens.

So we have now low inflation but high unemployment.

Inflation is one tool of the Fed can use to ease debt.

And they are signaling that is the course they are going to take.


We've been overdue for an inflation scare for a while now. Policy makers got really scarred by last time, but after enough crying wolf and they are finally starting to relax again. That and it is hard to justify keeping a strong currency as others get into a devaluing war. In some ways, inflation can actually be good if we navigate it right. It wipes out a lot of wealth, which isn't strictly bad when wealth inequality is a big concern.
 
2020-08-27 3:53:02 PM  
When I refinanced my fixed-rate student loans a while back to take advantage of lower interest rates, I was afraid that it would bite me in the ass as rates eventually had to go back up. Looks like I actually chose wisely.
 
2020-08-27 4:10:21 PM  

EvilEgg: Wouldn't this be bad for him?  He wants rates low to keep juicing the economy, and the economy looks better if you discount the massive unemployment rate. So the rates should go up.


Look, Subby was determined to reverse engineer a headline about the Fed doing whatever Trump wants no matter what they actually did, so they do not appreciate your fiscal literacy.
 
2020-08-27 4:36:57 PM  
Fudging the numbers for his own benefit and so he will look better than a failed sack of poop? Probably does his taxes the same way.
 
2020-08-27 5:46:23 PM  

BMulligan: Minor Catastrophe: Remember stagflation of the 70's?

High unemployment and high inflation is a contradiction of economic terms but yet it happens.

So we have now low inflation but high unemployment.

Inflation is one tool of the Fed can use to ease debt.

And they are signaling that is the course they are going to take.

But on the plus side, my old WIN button will be relevant again.


Yep.

And how do you Whip Inflation Now?

Government setting wage and prices like in WW2 and introducing healthcare benefits as a loophole?

Or cranking up interest rates so mortgage rates = credit card rates.
 
2020-08-27 5:54:58 PM  

OptimisticCynicism: Minor Catastrophe: Remember stagflation of the 70's?

High unemployment and high inflation is a contradiction of economic terms but yet it happens.

So we have now low inflation but high unemployment.

Inflation is one tool of the Fed can use to ease debt.

And they are signaling that is the course they are going to take.

We've been overdue for an inflation scare for a while now. Policy makers got really scarred by last time, but after enough crying wolf and they are finally starting to relax again. That and it is hard to justify keeping a strong currency as others get into a devaluing war. In some ways, inflation can actually be good if we navigate it right. It wipes out a lot of wealth, which isn't strictly bad when wealth inequality is a big concern.


Inflation is an incentive for you to be productive in some capacity.

If $1 can buy you a loaf of bread today or 100 years from now, why not bury $1 bill or a flake of gold or 0.00000000^A bitcoin wallet on an IBM 8.25 inch floppy disk in a jar in the backyard?
 
2020-08-27 6:53:43 PM  
FTFA: Markets rallied on Powell's announcement, which spurred a 200-point rise in the Dow Jones industrial average and helped erase the Dow's losses from this year.

So Trump can crow about it at the RNC tonight.  No, this wasn't orchestrated at all..
 
2020-08-27 10:35:58 PM  

Minor Catastrophe: BMulligan: Minor Catastrophe: Remember stagflation of the 70's?

High unemployment and high inflation is a contradiction of economic terms but yet it happens.

So we have now low inflation but high unemployment.

Inflation is one tool of the Fed can use to ease debt.

And they are signaling that is the course they are going to take.

But on the plus side, my old WIN button will be relevant again.

Yep.

And how do you Whip Inflation Now?

Government setting wage and prices like in WW2 and introducing healthcare benefits as a loophole?

Or cranking up interest rates so mortgage rates = credit card rates.


Or, if you're Nixon, both!
 
2020-08-28 12:35:24 AM  

Minor Catastrophe: Inflation is an incentive for you to be productive in some capacity.


I'm not disagreeing with you. However, it isn't hard to sell "why should we incentivize borrowers over savers?" while failing to mention the fact that the "savers" that benefit are mostly the ultra-wealthy(by volume if not raw count). Those ultra-wealthy tend to have a wee bit of lobbying power too so you can see why we would end up prioritizing low inflation so much.
 
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