On 2/9/06, Charles Brown <[EMAIL PROTECTED]> wrote: > Let's say a working class' writer on economics like Jim D. or Doug H. were > the Fed chair. Would it be possible to use whatever limited control of > interest rates to keep unemployment down and inflation up in the interst > (pun) of the many rather than for the few ? Would keeping inflation up be > pro-masses in net effect or whole impact ? Or are both inflation and > deflation harmful to the masses in general ? Are there people's interest > rates, theoretically ?
flattery will get you nowhere. It would nice to be a "working class' writer"... The last time the Fed chair differed with the Wall Street/banking bloc, he (William Miller, appointed by J. Carter) was quickly fired and replaced with Paul Volcker... Some called that event a "covert election," though maybe "coup" is a more accurate word. higher inflation only helps the "masses" if it's associated with low unemployment and doesn't get out of hand. Mild inflation is okay, whereas out-of-control inflation or deflation is a disaster. Deflation is worse, but the WS/b bloc is quite upset by inflation. There is currently some room for lowering unemployment further using demand-side (monetary or fiscal) policy, but at some point profits will be squeezed and/or inflation will get worse. This encourages a political and/or an economic reaction (a cut-back in accumulation) which encourages a reversal of the demand-side low unemployment policy. (This is a modern, politicized, version of Marx's volume I, ch. 25 story, in a world with fiat money.) I think that price controls simply shift the problem around rather than solving it, so the best idea within the capitalist system would be active efforts to give jobs to the long-term unemployed via training and direct job creation. Even that will like evoke reaction from the WS/banking bloc (finance capital, if you will). -- Jim Devine Bust Big Brother Bush!
