Wednesday, July 13, 2011

Quote of the Day

[I]f you’re interested in labor and working conditions, you’ve got to be interested in full employment. Full employment gives workers meaningful leverage. Mass unemployment gives it all to the bosses. In strict dollars and cents terms, I think everyone is better off with prosperity than with sluggish growth. But in terms of power, mass unemployment is a boon to bosses.

-Matthew Yglesias

Amen. If the market value of a human being's labor is shitty, people will be treated like shit by their employers. If someone can say, "Take this job and shove it!", that's real power for the worker. If an employer can say, "I've got 30 people lined up ready to replace you.", that's real power for the employer. Everything else is fiddling at the margins. I'd take 4% unemployment and free agency over 10% unemployment and labor union backing me up any day of the week.

The Federal Reserve's job is to keep both unemployment and inflation low. Low unemployment benefits workers. Low inflation benefits banks and people who are holding a lot of cash. Guess which group the Federal Reserve seems to be serving better. This is one of the great moral travesties of our time.

(Yes, hyper inflation is bad for everybody. But 4% inflation might help get rid of some of our debt overhang at both the personal and national levels. Of course, as a mortgage holder, I'm not disinterested here: I'd love to have a %0-1% real rate on my home loan!)

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