Raise your glass to the hard-working people
Let’s drink to the uncounted heads
Let’s think of the wavering millions
Who need leading but get gamblers instead
Spare a thought for the stay-at-home voter
His empty eyes gaze at strange beauty shows
And a parade of the gray-suited grafters
A choice of cancer or polio
– Salt of the Earth, The Rolling Stones
YOUGHAL, IRELAND – So many jackasses. So little time. We don’t know which one to laugh at first.
Labor Day is coming up. So let us continue honoring the laboring man… the salt of the Earth… the rag-taggy people, who make the lattes and drive the trucks.
Upon his sweaty brow, the gray-suited grifters press down their thorny claptrap. And upon his back, they place the whole burden of their goofy plans.
Federal Reserve top dog Jerome Powell is howling for something he calls “maximum employment:”
We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2% inflation on a sustainable basis.
He thinks everybody should be schlepping or toting, bussing… or hod-carrying, helping us dig our way out of the hole he has dug for us. He believes his policies are the key to getting us all on the job.
And then, there’s AOC, who thinks Powell should be replaced… for all the wrong reasons, of course. She thinks she knows what laboring people should be laboring at. MarketWatch reports:
A group of progressive House Democrats, including Rep. Alexandria Ocasio-Cortez of New York, on Monday called for President Joe Biden to replace Fed Chairman Jerome Powell when his term expires in February.
In a joint statement first reported by Politico, the lawmakers urged Biden “to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice.”
We have no trouble imagining a Federal Reserve focused on “eliminating climate risk” (whatever that means) and “advancing racial and economic justice” (whatever that is). But it gives us a shiver.
These old guys and gals had one main duty – protecting the integrity of the U.S. dollar and its financial system. They made a total mess of it – with the country now up to its neck in debt… and headed into deeper water.
Imagine the damage they could do if they were turned loose to improve the world’s weather… its race relations… or its “economic justice.”
And continuing in this delusional direction, perhaps the wackiest of all comes from economists themselves. Business Insider reports:
It’s inequality that dragged interest rates lower, not the other way around, NBER researchers said Friday. […]
The Fed has taken flak for the [low interest rate] trend, with economists warning that near-zero rates worsen inequality. But what if that narrative is wrong, and the wealthy are behind rates’ steady decline instead of the Fed?
The conventional argument should be flipped on its head, according to a study published Friday by the National Bureau for Economic Research. Wealthy Americans’ booming income powered the decades-long decline in interest rates, economists Atif Mian, Ludwig Straub, and Amir Sufi wrote. That downtrend then lifted stocks and most recently powered the market’s rebound from 2020 lows.
“It is a vicious cycle, and we are stuck in it,” Mian wrote in a Tuesday tweet. In other words, it may not be the Fed’s fault, which means it will be much harder to solve.
Huh? Who paid for that “research?”
The Fed has spent $7.5 billion every day for the last 18 months – $4 trillion in total – intentionally pushing down interest rates by buying bonds.
That is, for every dollar the working stiffs created in the real economy (GDP growth), the Fed printed more than three dollars and fed it into the financial industry.
The wavering millions saved their pennies. But they got nothing for their efforts. After inflation, they lost money on their savings accounts.
And how long does this trio – Mian, Straub, and Sufi – think real interest rates would stay below zero if the Fed announced an end to its price-fixing, money-printing, market-meddling policies?
Ten seconds? Two minutes? In a flash, stocks would crash and about $30 trillion of fantasy stock market wealth would disappear. The “inequality” problem – solved.
The rich would be a lot less rich; the salt of the Earth would be, relatively, richer.
And with no open spigot at the Fed, all of a sudden, millions of people would be desperate for money. They would have to line up at the only tap left to them – the real savings of real people, not the fake money of the Fed. Interest rates would go “to the moon.”
It would be like a scene at Kabul airport. Chaos. Confusion. With investors desperately trying to exit their risky speculations… and no buyers on the other side to take them out.
Returning to Mr. Powell…
As we saw yesterday, labor force participation has been going down for 20 years. Apparently, there are a lot of people who aren’t much interested in participating in the workaday world.
But why is that any of Powell’s concern?
(We recall, mischievously, that the “maximum employment” record for modern times is probably held by Nazi Germany. There were no idle hands in that devil’s workshop! Almost everybody was required to contribute to the war effort… including millions of Poles, French, and Jews held in slave-like conditions.)
In today’s world, people seem to be schlepping less than ever before. And the youngest members of the proletariat seem to like labor the least.
More to come…
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