Powell and Biden Go To War; Workers Need More; Money Guys Head For Florida
Jay Powell and Joe Biden have gone to war. They don’t put it that way, “war” being a word too charged for even Vladimir Putin to use – he prefers “special military operation”. Policy makers at the Federal Reserve Board have decided that the labor market is unhealthily tight, and must reduce the power of workers to insist on higher wages. The Biden administration has adopted policies aimed at raising wages. Powell is directing a hose at the labor market while Biden pours gasoline on the fire.
The Fed is raising interest rates to slow demand for houses, cars, and anything bought on credit cards. That will “destroy demand” for goods and services, to use the jargon of the trade, and therefore for workers. Meanwhile, Biden has launched new spending programs totaling over $600 billion that will pump cash into an economy unable to meet the current demands being made on it.