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Posts Tagged ‘unemployment rate’

The Federal Reserve Wants You Fired

Posted by M. C. on September 6, 2022

written by ron paul

This is because the Fed’s strategy for reducing the historic price inflation now plaguing the economy — caused by the Fed’s unprecedented low or zero interest rate policies — is to increase unemployment in order to decrease consumer spending. In his speech to the annual monetary policy conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated his commitment to increasing unemployment, or, as he puts it, “softening the labor markets.”

http://ronpaulinstitute.org/archives/featured-articles/2022/september/05/the-federal-reserve-wants-you-fired/

The Federal Reserve was no doubt troubled by July’s decline in the US unemployment rate to 4.5 percent and increase in job openings to 11.2 million. This is because the Fed’s strategy for reducing the historic price inflation now plaguing the economy — caused by the Fed’s unprecedented low or zero interest rate policies — is to increase unemployment in order to decrease consumer spending. In his speech to the annual monetary policy conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated his commitment to increasing unemployment, or, as he puts it, “softening the labor markets.”  

Powell is correct that reducing price inflation is urgent. He is also correct that doing so will increase unemployment and slow economic growth. The Fed’s efforts to bring down inflation by increasing interest rates will also make it harder for average Americans to obtain home mortgages, purchase a car, or even pay their utility bills. Those hardest hit by the Fed’s “softening of labor markets” are also the primary victims of the Fed-created price inflation. This demonstrates the insanity and cruelty of the fiat money system, which enriches the elites while improvising the masses.

Well-connected members of the financial elite and crony capitalists benefit from the Federal Reserve’s money creation, as they are the first recipients of the new money. This enables them to increase their purchasing power before the new money has caused general price inflation. By the time the money creation has impacted the middle and working classes, the economy is racked with widespread price inflation. Therefore, a nominal gain in wages is not enough to compensate for the real price increase. So average Americans suffer from both Fed-created inflation and the Fed’s attempts to rein in that inflation. 

It is amazing that more individuals do not question the idea that inflation, recessions, unemployment, and booms and busts are necessary features of a sound monetary system. Even many otherwise staunch defenders of free markets maintain a child-like faith in central banking. Some conservatives support “reforming” the Fed by making it follow a “rules-based” monetary policy. These conservatives do not understand that the problem is the existence of a central bank with the power to manipulate the currency.

Many progressives recognize the damage the Fed does to average Americans when it increases interest rates. However, their “solution” is a cure worse than the disease: make the Fed maintain low interest rates (and thus high inflation) in perpetuity—or until the continued devaluation of the currency via inflation causes a dollar crisis, leading to a major economic calamity. The main victims of this crisis will, of course, be the very Americans progressives claim to care about.

The Federal Reserve’s failure to fulfill its dual mandate of producing stable prices and full employment, combined with the damage it inflicts on the American people, make the best case for changing our monetary policy. A stable currency, safe from manipulation by politicians or central bankers, would provide the basis for long term prosperity that benefits everyone, not just the crony capitalists and the power-hungry politicians. The first steps in this transition are to finally pass audit the Fed legislation and continue the efforts to pass state laws recognizing precious metals as legal tender.


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A Jobless Recovery Is Coming to Europe | Mises Wire

Posted by M. C. on April 21, 2021

Any serious analyst would be appalled at the figures of unemployment and growth shown by the IMF after spending close to €20 trillion in chained stimuli. Furthermore, any serious analyst would be seriously warning about the negative consequences of making central banks and government the lender of first resort, not the last resort. What is the biggest risk? That the 2022 estimates prove to be too optimistic, again, and governments and central banks push to an even higher level of interventionism.

https://mises.org/wire/jobless-recovery-coming-europe

Daniel Lacalle

The International Monetary Fund has published its April outlook for the global economy. It has been hailed by most commentators due to the strong upgrade in GDP recovery. The report states that “global growth is projected at 6% in 2021, moderating to 4.4% in 2022. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility.”

However, there are important warning signs that should be considered because headlines have been predominantly euphoric about this optical upgrade.

Two factors that affect the quality of the recovery should worry us: the upgrade comes mostly from higher government spending and rising debt, and the job recovery is much slower than in previous cycles.

The unemployment rate in the euro area will remain well above 2019 levels even in 2022 (rising from 7.9 percent in 2020 to 8.3 percent in 2022). Only Germany shows a positive employment outlook that leads its unemployment ratio to fall to 3.7 percent. Spain, on the opposite side, will end, according to IMF estimates, with unemployment of 15.8 percent in 2022 from 15.5 percent in 2020. This would make Spain the eurozone economy with the highest unemployment rate even in 2022 and one of the highest in the world.

The United States is estimated to end 2022 with a 4.2 percent unemployment rate, a rapid decrease from the current 6 percent, but still above prepandemic levels. China unemployment is expected to remain low at 3.6 percent and advanced Asia will likely show the best improvement in unemployment, reaching nearly record lows in 2022.

Even with these optimistic estimates of recovery, the IMF is showing that the covid-19 crisis is going to leave millions of workers left behind, and that it will be particularly negative in an area that prides itself on social policies and high public spending, the eurozone.

This crisis has proven that being rich and having a very elevated government spending did not help manage the health and economic crisis better.

The biggest loser of this crisis has been the middle class. According to Bloomberg, an estimated 150 million slipped down the economic ladder in 2020, the first pullback in almost three decades. Massive liquidity injections and large government spending programs have not helped the middle class, and we could argue that it created a negative effect. Why? The middle class has been the most negatively affected by the loss of employment while its savings and real wages have been eroded by inflation as central banks pumped trillions into government debt, creating a perverse spiral of rising prices when disposable real income fell dramatically.

We could argue that it would have been worse without central bank intervention and government spending, but there is absolutely no evidence that shows it should have been as massive and indiscriminate as it was in 2020. We have been told to ignore the size of stimulus or its effectiveness and just accept these massive repurchase and spending programs as essential. No one seems to ask how much is too much and even less when the results are a bloated GDP recovery due to debt and public expenditure with a poor job recovery ratio. As time passes, we have grown used to hearing of “trillion dollar stimulus” and thinking it is not enough.

This poor return on capital employed of government and central bank programs would result in layoffs of management in any company. We are not discussing diminishing returns of monetary and fiscal policy, but outright negative effects if we add asset bubbles and high leverage.

Any serious analyst would be appalled at the figures of unemployment and growth shown by the IMF after spending close to €20 trillion in chained stimuli. Furthermore, any serious analyst would be seriously warning about the negative consequences of making central banks and government the lender of first resort, not the last resort. What is the biggest risk? That the 2022 estimates prove to be too optimistic, again, and governments and central banks push to an even higher level of interventionism.

The destruction of the free market, competition, and innovation may seem appealing to some now, but the likely outcome of poor employment, negative real wage growth, and stagnation should be a real cause of concern. Author:

Daniel Lacalle

Daniel Lacalle, PhD, economist and fund manager, is the author of the bestselling books Freedom or Equality (2020),Escape from the Central Bank Trap (2017), The Energy World Is Flat (2015), and Life in the Financial Markets (2014).

He is a professor of global economy at IE Business School in Madrid.

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The Emerging Existential Crisis at the Border – LewRockwell

Posted by M. C. on March 9, 2021

Thus, what’s shaping up on the border is not only a national security crisis but a national survival crisis. For it is impossible to see, given the Biden administration policies adopted, how the invasion of America can be halted. And if 2 million or 3 million migrants reach the U.S. border and cross over each year, and we do not send them back, what stops the invasion and remaking America?

As many illegal migrants do not read, write or speak English, and do not bring a unique set of skills, their immense and growing presence can only deepen our national disunity.

Almost all of these folks are poor or working-class people who would have to rely on government subsidies for their health care, food support, housing and the schooling of their children.

With the unemployment rate rising again in the Black community, which has sustained the heaviest collective hit from the pandemic and economic collapse, the migrants would be competing with them for jobs.

https://www.lewrockwell.com/2021/03/patrick-j-buchanan/the-emerging-existential-crisis-at-the-border/

By Patrick J. Buchanan

During a Democratic debate in 2020, the candidates were asked if their health care plans would cover “undocumented immigrants.”

Each raised his or her hand, including front-runner Joe Biden.

From that stage, the message went forth: If the Democrats win this election, then it is amnesty for all and open borders in America.

The message was reinforced by repeated Democratic praise for sanctuary cities, by calls to “abolish ICE” and end deportations, by pledges to stop work on Donald Trump’s wall, if not to tear it down.

Message sent to Mexico, Central America and the Third World:

If the Democrats win and you make it across the border into the United States, under President Joe Biden, you will not be sent back. After only a brief hassle, the economic opportunities and social welfare benefits of the richest country on earth will be open to you and yours.

Hence, when Biden won, a new and potentially historic surge to the Southern border began, and the number of illegal arrivals and crossings are in the growing thousands every day.

According to a White House domestic policy council document, the number of children who, without a parent or guardian, will arrive at the border in 2021 will be about 117,000 — 50% higher than the record number of children who arrived in the 2019 humanitarian crisis.

In February, some 100,000 immigrants were apprehended by the Border Patrol for illegal border crossing. “I actually think that’s an undercount,” says Victor Manjarrez Jr., ex-Border Patrol agent who teaches at Texas University.

The pre-Trump policy of “catch-and-release” has been reinstated.

Children and families who cross illegally from Mexico cannot now be held for more than 72 hours. They are being released into the U.S. to await a court date — potentially years off — to hear their claim to a right to be here. Most never show up.

“We are weeks, maybe even days, away from a crisis on the southern border,” says Rep. Henry Cuellar, a Democrat whose Texas district abuts Mexico. “Our country is currently unprepared to handle a surge in migrants in the middle of the pandemic.”

Congressional Democrats, following Biden’s lead, have proposed a new citizenship act. “Dreamers,” brought here by their parents as children, would be put on a three-year fast-track to U.S. citizenship.

The 11 million to 22 million illegal migrants already in the country — the exact number is unknown — would be put on an eight-year track to citizenship.

The Democratic Party is signing on to the largest mass amnesty for illegal immigrants in history — which would produce millions of new voters for the party.

Among the recent border-crossers, who are transported by bus to detention centers, where they remain for 72 hours and then are released to travel where they wish, many are carrying the coronavirus.

Thus, what’s shaping up on the border is not only a national security crisis but a national survival crisis. For it is impossible to see, given the Biden administration policies adopted, how the invasion of America can be halted. And if 2 million or 3 million migrants reach the U.S. border and cross over each year, and we do not send them back, what stops the invasion and remaking America?

What would blanket amnesty and a renewed invasion portend?

In a decade, Texas, the Southwest and much of the South would take on the political aspect of California where the GOP has become a permanent minority party.

As many illegal migrants do not read, write or speak English, and do not bring a unique set of skills, their immense and growing presence can only deepen our national disunity.

Almost all of these folks are poor or working-class people who would have to rely on government subsidies for their health care, food support, housing and the schooling of their children.

With the unemployment rate rising again in the Black community, which has sustained the heaviest collective hit from the pandemic and economic collapse, the migrants would be competing with them for jobs.

And as the illegal migrants are disproportionately young and male, they would add to the surging crime rates in America’s major cities.

America is headed, seemingly inexorably, to a future where a majority in this country traces its ancestry to Asia, Africa and Latin America, a future where this already fractionated nation is even more multiracial, multiethnic, multilingual and multicultural than today.

With racial conflict as sharp as it has been in decades, with our political parties at swords point, with the culture war raging unabated, as mobs tears down statues and monuments to America’s founders, exactly what national problem will be solved by an unstopping and unrelenting wave of migrants illegally crossing the border into our country year after year?

One wonders: Is this how the Republic ends?

Patrick J. Buchanan is co-founder and editor of The American Conservative. He is also the author of Where the Right Went Wrong, and Churchill, Hitler, and the Unnecessary War. His latest book is Nixon’s White House Wars: The Battles That Made and Broke a President and Divided America Forever See his website.

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Boston University’s Fake-o-Nomics Darling

Posted by M. C. on February 13, 2019

https://www.nationalreview.com/2018/07/alexandria-ocasio-cortez-economics-major-ignorant-of-basic-facts/

By 

It costs a pretty penny to earn a diploma in stupid.

The annual list price to attend Boston University — including tuition, fees, room, and board — currently rounds out to $70,000. To acquire a degree in economics from this tony institution of higher learning, an undergrad must complete courses in calculus, microeconomic and macroeconomic analysis, empirical economics, statistics, and assorted electives.

Four years, 52 credits and nearly $300,000 later, the school promises that BU economics majors will depart “with a firm understanding of core microeconomic and macroeconomic theory” and the “empirical skills that are essential to applying economic reasoning in our increasingly data-driven world.”

How, then, to explain the abject economic illiteracy of meteoric media darling and democratic socialist “political rock star” Alexandria Ocasio-Cortez? The 28-year-old BU alumna graduated with an economics and international relations degree in 2011. She calls herself a “nerd” and bragged about her academic credentials, tweeting earlier this month:

“How many other House Democrats have a degree in Economics like I do? Trying to find who out here is going to be in the Gini Coefficient Appreciation Squad.”

The upstart New York congressional candidate has been hailed by pundits, newspapers, and pols as “sharp,” “smart” and “extraordinary.” BU’s associate provost and dean of students Kenneth Elmore gushed that Ocasio-Cortez is “brilliant — she is boldly curious and always present. She makes me think and could always see multiple sides of any issue. . . . I can’t wait to see what happens when her time truly comes.”

But when the time came to put her BU economics education to work, Ocasio-Cortez flunked. On PBS last week, she asserted that “unemployment is low because everyone has two jobs.” Moreover, the erudite B.A. holder in economics posited, “unemployment is low because people are working 60, 70, 80 hours a week and can barely feed their kids.” Read the rest of this entry »

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