The Good News and Bad News About 5.9 Percent Unemployment

Dean Baker is saying the same thing that Paul Krugman has been saying for several months regarding the inflation hawks and the potential harm they can inflict on our still fragile economy by raising interest rates to ward of non-existant inflationary concerns. Seeing the unemployment rate dip below 6% is very encouraging, though I am very critical of the Fed for not acting more aggressively with regard to their other mandate, which is full employment; they were gung ho when it came to Wall Street’s concern of liquidity and credit, but when it came to Main Street’s struggles with high unemployment, it was lights out at the Fed. So now to think that several members of the Fed are calling for interest rates to rise just to keep the labor market and its wages suppressed is infuriating. Don’t they realize that with wages already stagnant, the majority of American cannot afford higher interest rates. How are we supposed to continue fueling the economy when we will be ill pressed paying increased mortgage rates, increased car loan rates and even if saving accounts will be yielding higher, it doesn’t quite matter when you can’t afford to put anything in those saving accounts. Corporate America needs to stop hoarding cash; they are taking advantage of our resources, our labor, our roads, bridges and our taxpayer dollars. It is about time that we have our legislators demand that corporations start contributing the way they used to in the 1950’s and 1960’s, before they all colluded together in the 1970’s to influence Washington D.C into writing the corporate tax code in ways that redistributed wealth to the top rungs, cut union strength off at the knees and provided the means for corporate America to out-source jobs and make huge money off that. The Fed should not buy into that mindset as well, because unless these governors are all deaf and blind they have to be aware that Middle America is suffering greatly and this is an unsustainable path for our nation to continue traveling down. The Fed needs to keep interest rates as is and they should be finding ways to pressure employers to raise wages for their workers so that inflation can work its way back to levels that are sustainable and organic to our economic environment.
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