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What is an absurdity that has been normalized by society?
(midwest.social)
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this post was submitted on 24 Aug 2023
309 points (97.0% liked)
Asklemmy
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My current favorite is the federal reserve making policy to intentionally weaken the labor market. I am currently paying the fuckwads scheming to keep labor weak, docile, and dependent. What a blast.
Can you elaborate?
Raising interest rates to fight inflation works by reducing demand. Jobs get lost so people have less money. So they spend less, so prices drop to be more competitive.
Only poorer people obviously. Rich people are less affected, but still pay more in interest. The increased number of unemployed people means competition for jobs is higher so workers are cheaper to pay, increasing profits again.
High inflation is bad for everyone, but particularly so for the poorer, too. However, measures to fight it should be spread across society. Instead blunt tools like interest rate rises disproportionately affect the poor. They should be combined with higher taxes on business and high earners and high net worth individuals. Worldwide we only really do the first. I wonder who decides?
It mostly works by forcing companies to pay back their loans rather than keeping them indefinitely, which pulls excess money out of the economy instead of it circulating continuously. When interest rates were near zero and the reserve requirement was dropped for banks, a shitload of this lending was done multiple times, so they're hoping to effectively claw that back