Need to drive up unemployment to get inflation under control (borrow, interest)

[moguldreamer]

Clearly, the labor market is way overheated. Unemployment is a meager 3.4%. We need to drive up unemployment in order to get inflation under control.

[Taggerung]

People productively working does not cause prices to go up. People productively working increases the supply of goods and services, which actually puts downward pressure on prices. Inflation comes from the government, not people working. That is a Keynesian myth.

[oregonwoodsmoke]

No. All we need is for the government to stop spending so much money they don't have.

[redguard57]

Nothing the Fed has done has slowed this job market down.

[MKTwet]

During COVID, it's the retail and low level worker jobs that are hurt by lockdowns. High tech jobs were in demand and operating remotely.

Now that tech job unemployment is high but low level and retail jobs are in demand the unemployment rate isn't showing the correct picture.

There are many high paying workers that are out of work so discretionary spending is low. Low level workers who are trying to put food on the table are getting robbed by inflation while working multiple jobs just to keep up with the bills.

[roadrat]

This is impossible, we have been assured for decades by the UBI fan boi's that robots, AI, space aliens are going to take all our jobs...
Any minute now, any..........minute........now.

[Avondalist]

Originally Posted by moguldreamer

Clearly, the labor market is way overheated. Unemployment is a meager 3.4%. We need to drive up unemployment in order to get inflation under control.

I hope you aren't confusing the tool for the cure. Driving up the unemployment rate is one (brutal) way to reduce inflation, which may be the only tool we have now since the Fed can act somewhat unilaterally and quickly.

We could also reduce public deficit spending but that's slower to change if it can at all. The best cure for inflation is better worker training and management so productivity gains can keep up with the money supply.

[MKTwet]

You can’t fight inflation with forcing jobless. Many greedy wealthy people got rich during the pandemic have a pile of cash to use must hire workers to operate their businesses. The interest rate hikes hasn’t hurt them because they borrowed when rates were low. It will take awhile for consumption and fear to kill businesses then it will start to conflate into other sectors and take all jobs with it.

All the printed money the past few years are keeping things going right now.

[mathjak107]

the fed has to deal with a slowing economy on one end and inflation on the other .

considering the fed always overdoes things it looks like a no win situation for them .

but learning from japan they are more inclined to cut rates to avoid a spiraling deflation then to raise them.

throw the banking crisis in the mix that gets worse and worse with high rates and odds are pretty good their fighting inflation is coming to a halt.

i am positioned for a slowing down and declining rates ahead

[EDS_]

Originally Posted by Taggerung

People productively working does not cause prices to go up. People productively working increases the supply of goods and services, which actually puts downward pressure on prices. Inflation comes from the government, not people working. That is a Keynesian myth.

Years on just stop. No one who has any idea what is going on buys your schtick.