Alone Among Prez Candidates, Bernie Blasts Fed Rate Hike, And Other Nuggets From New Hampshire

Alone Among Prez Candidates, Bernie Blasts Fed Rate Hike, And Other Nuggets From New Hampshire
2 days agoby Jonathan Tasini


Fuck those idiots at the Fed. Tools of Wall Street, the bond market and the rest of the pieces of crap that have savaged Americans. You hike interests rates for no economic reason other than some clamor from the very elites who just need to soak regular Americans even more.

Bernie (from his Senate website so this isn’t just campaign-blasted statement):

“When millions of Americans are working longer hours for lower wages, the Federal Reserve’s decision to raise interest rates is bad news for working families. At a time when real unemployment is nearly 10 percent and youth unemployment is off the charts, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people. The Fed should act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago.”

More from Dean Baker, co-director of the Center for Economic and Policy Research (CEPR) (emailed statement into my inbox):

“The Fed’s decision to raise interest rates today is an unfortunate move in the wrong direction. In setting interest rate policy the Fed must decide whether the economy is at risk of having too few or too many jobs, with the latter being determined by the extent to which its current rate of job creation may lead to inflation. It is difficult to see how the evidence would lead the Fed to conclude that the greater risk at the moment is too many jobs.

“While at 5.0 percent, the unemployment rate is not extraordinarily high, most other measures of the labor market are near recession levels. The percentage of the workforce that is involuntarily working part-time is near the highs reached following the 2001 recession. The average and median duration of unemployment spells are also near recession highs. And the percentage of workers who feel confident enough to quit their jobs without another job lined up remains near the low points reached in 2002.

“If we look at employment rates rather than unemployment, the percentage of prime-age workers (ages 25-54) with jobs is still down by almost three full percentage points from the pre-recession peak and by more than four full percentage points from the peak hit in 2000. This does not look like a strong labor market.

“On the other side, there is virtually no basis for concerns about the risk of inflation in the current data. The most recent data show that the core personal consumption expenditure deflator targeted by the Fed increased at just a 1.2 percent annual rate over the last three months, down slightly from the 1.3 percent rate over the last year. This means that the Fed should be concerned about being below its inflation target, not above it. “While wage growth has edged up somewhat in recent months by some measures, it is still well below a rate that is consistent with the Fed’s inflation target. Hourly wages have risen at a 2.7 percent rate over the last year. If there is just 1.5 percent productivity growth, this would be consistent with a rate of inflation of 1.2 percent.

“Furthermore, it is important to recognize that workers took a large hit to their wages in the downturn, with a shift of more than four percentage points of national income from wages to profits. In principle, workers can restore their share of national income (the equivalent of an 8 percent wage gain), but the Fed would have to be prepared to allow wage growth to substantially outpace prices for a period of time. If the Fed acts to prevent workers from getting this bargaining power, it will effectively lock in place this upward redistribution. Needless to say, workers at the middle and bottom of the wage distribution can expect to see the biggest hit in this scenario.

“One positive point in today’s action is the Fed’s commitment in its statement to allow future rate hikes to be guided by the data, rather than locking in a path towards “normalization” as was effectively done in 2004. If it is the case that the economy is not strong enough to justify rate hikes, then the hike today may be the last one for some period of time. It will be important for the Fed to carefully assess the data as it makes its decision on interest rates at future meetings.

“Recent economic data suggest that today’s move was a mistake. Hopefully the Fed will not compound this mistake with more unwarranted rate hikes in the future.”

You won’t hear this from the status quo candidate, awash in Wall Street cash, because, hey, those fuckers want interest rates to go up because they haven’t made enough money fleecing the American public. .....................(more)

http://www.workinglife.org/2015/12/16/alone-among-prez-candidates-bernie-blasts-fed-rate-hike-and-other-nuggets-from-new-hampshire/