Capitalism, The Fed and Economic Policy
mickeyrat
Posts: 38,547
Better thread for this discussion.
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
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If You Must Point Fingers on Inflation, Here’s Where to Point Them
By Christopher Leonard
Mr. Leonard is the author of “The Lords of Easy Money” and “Kochland.”
As the midterm elections draw nearer, a central conservative narrative is coming into sharp focus: President Joe Biden and the Democratic-controlled Congress have a made a mess of the American economy. Republicans see pure political gold in this year’s slow-motion stock market crash, which seems to be accelerating at the perfect time for a party seeking to regain control of Congress in the fall.
The National Republican Congressional Committee in a tweet last month quipped that the Democratic House agenda includes a “tanking stock market.” Conservatives have been highlighting a video clip from 2020 when then-president Donald Trump warned about a Joe Biden presidency: “If he’s elected, the stock market will crash.” Right wing pundit Sean Hannity’s blog featured the clip under the headline: “TRUMP WAS RIGHT.”
But the narrative pinning blame for the economy’s woes squarely on Democrats’ shoulders elides the true culprit: the Federal Reserve. The financial earthquakes of 2022 trace their origin to underground pressures the Fed has been steadily creating for a over a decade.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
WASHINGTON (AP) — The Federal Reserve intensified its fight against high inflation on Wednesday, raising its key interest rate by three-quarters of a point — the largest bump since 1994 — and signaling more rate hikes ahead as it tries to cool off the U.S. economy without causing a recession.
The unusually large rate hike came after data released Friday showed U.S. inflation rose last month to a four-decade high of 8.6% — a surprise jump that made financial markets uneasy about how the Fed would respond. The Fed's benchmark short-term rate, which affects many consumer and business loans, will now be pegged to a range of 1.5% to 1.75% — and Fed policymakers forecast a doubling of that range by year's end.
“We thought strong action was warranted at this meeting, and we delivered that,” Fed Chair Jay Powell said at a press conference in which he stressed the central bank's commitment to do what it takes to bring inflation back down to the Fed's target rate of 2%, even if that resulted in a slightly higher unemployment rate.
Powell said it was imperative to go bigger than the half-point increase the Fed had earlier signaled because inflation was running hotter than anticipated — causing particular hardship on low-income Americans and solidifying the public's view that stubbornly high inflation won't be easily resolved.
Powell said that another three-quarter-point hike is possible at the Fed’s next meeting in late July if inflation pressures remain high, although he said such increases would not be common. He said the economy is strong enough to endure higher rates without tipping into recession, a prospect that many economists are increasingly worried about.
Some financial analysts suggested Powell struck the right balance to reassure markets, which rallied on Wednesday. “He hit it hard that ‘we want to get inflation down’ but also hit hard that ‘we want a soft landing,’ ’’ said Robert Tipp, chief investment strategist at PGIM Fixed Income.
Still, the Fed’s action on Wednesday was an acknowledgment that it’s struggling to curb the pace and persistence of inflation, which is being fueled by a strong labor market, pandemic-related supply disruptions and soaring energy prices that have been aggravated by Russia's invasion of Ukraine.
Some analysts said they welcomed the Fed’s more aggressive posture. “The more the Fed does now, the less they will have to later,’’ said Thomas Garretson, senior portfolio strategist at RCB Wealth Management.
Matthew Luzzetti, chief U.S. economist at Deutsche Bank, said Powell was right to acknowledge that the faster push on rates will cause pain for consumers. “It’s going to be a far bumpier ride to get inflation down than what they had anticipated previously,” Luzzetti said.
Inflation has shot to the top of voter concerns in the months before Congress’ midterm elections, souring the public’s view of the economy, weakening President Joe Biden’s approval ratings and raising the likelihood of Democratic losses in November. Biden has sought to show he recognizes the pain that inflation is causing American households but has struggled to find policy actions that might make a real difference. The president has stressed his belief that the power to curb inflation rests mainly with the Fed.
Yet the Fed’s rate hikes are blunt tools for trying to lower inflation while also sustaining growth. Shortages of oil, gasoline and food are contributing to higher prices. Powell said several times during the news conference that such factors are out of the Fed’s control and may force it to push rates even higher to ultimately bring down inflation.
Borrowing costs have already risen sharply across much of the U.S. economy in response to the Fed’s moves, with the average 30-year fixed mortgage rate topping 5%, its highest level since before the 2008 financial crisis, up from just 3% at the start of the year.
Even if a recession can be avoided, economists say it’s almost inevitable that the Fed will have to inflict some pain — most likely in the form of higher unemployment — as the price of defeating chronically high inflation.
Powell struck a defensive note when asked whether the Fed was now prepared to accept a recession as the price of curbing inflation and bringing it close to the Fed 2% target level.
“We’re not trying to induce a recession now,” he said. “Let’s be clear about that. We’re trying to achieve 2% inflation.”
In their updated forecasts Wednesday, the Fed's policymakers indicated that after this year's rate increases, they foresee two more rate hikes by the end of 2023, at which point they expect inflation to finally fall below 3%, close to their target level. But they expect inflation to still be 5.2% at the end of this year, much higher than they'd estimated in March.
Over the next two years, the officials are forecasting a much weaker economy than was envisioned in March. They expect the unemployment rate to reach 3.7% by year's end and 3.9% by the end of 2023. Those are only slight increases from the current 3.6% jobless rate. But they mark the first time since it began raising rates that the Fed has acknowledged that its actions will weaken the economy.
The central bank has also sharply lowered its projections for economic growth, to 1.7% this year and next. That's below its outlook in March but better than some economists’ expectation for a recession next year.
Even if the Fed manages the delicate trick of curbing inflation without causing a downturn, higher rates will nevertheless inflict pressure on stocks. The S&P 500 has already sunk more than 20% this year, meeting the definition of a bear market.
On Wednesday, the S&P 500 rose 1.5%. The two-year Treasury yield fell to 3.23% from 3.45% late Tuesday, with the biggest move happening after Powell said not to expect 0.75 percentage point rate hikes to be common.
Other central banks are also acting to try to quell inflation, even with their nations at greater risk of recession than the U.S.
The European Central Bank is expected to raise rates by a quarter-point in July, its first increase in 11 years. It could announce a larger hike in September if record-high levels of inflation persist. On Wednesday, the ECB vowed to create a market backstop that could buffer member countries against financial turmoil of the kind that erupted during a debt crisis more than a decade ago.
The Bank of England has raised rates four times since December to a 13-year high, despite predictions that economic growth will be unchanged in the second quarter. The BOE will hold an interest rate meeting on Thursday.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
In his first address to Twitter’s staff, Elon Musk said he is buying Twitter to avoid the “negative lens” of the mainstream media and that Twitter users had to feel safe on the platform or they won’t use the service.
In a companywide town hall Thursday, Musk said that people needed to “like” being on Twitter, and if they were “harassed or uncomfortable," the product would lose so many users that it would turn into a niche service.
His comment appeared to be an attempt to address concerns that Musk, a self-described free speech absolutist whose own followers are known to harass people, would turn Twitter into a free-for-all for misinformation and hate.
https://www.washingtonpost.com/technology/2022/06/16/elon-musk-twitter-employee-meeting/
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It's all in how you set your timeline.
I follow AP, Reuters, PBS, WSJ, WaPo, the Bulwark & several other news organizations. It's a pretty great app for aggregating different news sources if you can stay above all the bullshit.
& not for nothing, but if hate & misinformation is what you're after there's no shortage of that literally everywhere in the world today. That twitter is some big boogey man around here for hate & misinformation as compared to say most Rupert Murdoch owned media outlets is pretty comical. The shit that comes out of Tucker Carlson is infinitely worse than anything I see on my Twitter timeline on any given day.
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Ability to influence media has been a staple of political campaigns from time immemorial. Social media is no different.
Who reads source documents and footnotes on here?
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As is rage baiting, which is the way of the world these days, not just social media.... sports talk radio is a perfect example of this.
I just don't think twitter is any worse than facebook, & with the news coming out about FB selling people's data & influencing the 2016 election... the hate twitter gets here over FB is odd to me.
And I stand by my statement about fox news etc... I don't know too many people in their 60s or 70s spending a ton of time on twitter, but pretty much everyone owns a tv. (& a lot of people in their 60s & 70s ARE on facebook, while we're on the subject)
How did I miss this?
https://www.nytimes.com/2022/06/17/technology/spacex-employees-fired-musk-letter.html?referringSource=articleShare
….
The dewsh strikes again
Tell me again Elon supporters, did he buy twitter for free speech, or to feed his massive ego?
WASHINGTON (AP) — America’s employers shrugged off high inflation and weakening growth to add 372,000 jobs in June, a surprisingly strong gain that will likely spur the Federal Reserve to keep sharply raising interest rates to cool the economy and slow price increases.
The unemployment rate in June remained at 3.6% for a fourth straight month, the Labor Department said Friday, matching a near-50-year low that was reached before the pandemic struck in early 2020.
The past year’s streak of robust hiring has been good for job seekers and has led to higher pay for many employees. But it has also helped fuel the highest inflation in four decades and heightened pressure on the Fed to further slow borrowing and spending.
Many employers are still struggling to fill jobs, especially in the economy’s vast service sector, with Americans now traveling, eating out and attending public events with much greater frequency. The Fed may regard the June job gain as evidence that the rapid pace of hiring is feeding inflation as companies raise pay to attract workers and then increase prices to cover their higher labor costs.
The Fed has already embarked on its fastest series of rate hikes since the 1980s, and further large increases would making borrowing much costlier for consumers and businesses and increase the risk of a recession.
continues.....
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
havent looked for it, but I wonder if any polls or number crunching has been done about women pulling out of the workforce due to altered priorities or circumstances preventing re-entry into the workforce, primarily due to childcare options.... and how this factors in overall
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
1 retirements
2. people aren’t qualified to fill some of these good positions
3. jobs you do qualify for are low skill, low pay
I can’t tell you how many computer engineers are being brought in at my wife’s company from abroad. It’s a lot. Your laid off manufacturing worker has zero qualifications for that and we don’t produce enough. Some of those people just leave the workforce and don’t count against the unemployment numbers
seems like you are left with super high skilled, high paying jobs or jobs with such low skill requirements anyone could do it and people won’t do them if that means going down the job ladder. You are missing the middle
skill mismatches are a big problem
https://www.bls.gov/news.release/pdf/empsit.pdf
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The restaurants and other services, they have it tough nowadays.
Corporate employers have had the upper hand since Reagan, and when you’re a human slasher like Jack, treating employees and families like garbage, pay virtually no tax on profit, the world you left behind is the world you helped create.
ExxonMobil and Chevron both reported massive profit jumps thanks to record gasoline prices during the quarter.
Exxon’s profit, excluding special items, came to $17.6 billion in the second quarter, nearly double what it made in its very profitable first quarter as oil and gas prices started to soar in the wake of Russia’s invasion of Ukraine. Second-quarter profit was up 273% from the same period a year ago.
Chevron earned $11.4 billion excluding special items, up 74% from the first quarter and 247% from a year ago.
Including one-time items, both earned hundreds of millions more: ExxonMobil’s net income reached $17.9 billion, while Chevron brought in $11.6 billion.
ExxonMobil’s net income came to $2,245.62 every second of every day of the 92-day long quarter. On that basis, Chevron earned $1,462.11 per second.
Since it takes about two minutes to pump 20 gallons of gas, that means between them the two oil giants earned more than $400,000 between them in the time it took you to fill you tank.
https://www.cnn.com/2022/07/29/energy/exxonmobil-chevron-earnings/index.html
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There are no kings inside the gates of eden
https://www.commondreams.org/news/2022/07/28/2021-big-oil-has-spent-over-200-million-sabotage-climate-action-analysis
The oil and gas industry, one of the most powerful corporate forces in American politics, has spent more than $200 million over the past year and a half to stop Congress from slashing carbon emissions as evidence of their catastrophic impact—from deadly heatwaves to massive wildfires—continues to accumulate in stunning fashion.
That topline estimate of the fossil fuel industry's lobbying outlays and congressional election spending in the U.S. was calculated by Climate Power, which provided its findings exclusively to Common Dreams.
Nearly 80% of the industry's campaign donations during the time period examined went to Republican candidates, according to Climate Power, whose analysis draws on data from OpenSecrets.
Until Wednesday night, when Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) announced a surprise deal on climate investments, it looked as if the industry's influence campaign had fully paid off, having helped crater the Democrats' sweeping Build Back Better package.
Earlier this month, Manchin—the leading individual recipient of oil and gas industry cash in Congress—informed the Democratic leadership that he would not support moving ahead with renewable energy spending as part of a less ambitious bill, an apparently fatal blow to the hopes of climate action this year and possibly years into the future.
Manchin, for now, appears to have reversed course, striking an agreement with Schumer that contains a historic $369 billion in climate and energy spending, including billions to speed the country's lagging transition away from fossil fuels. If accepted by all 50 members of the Senate Democratic caucus, the reconciliation bill can pass without GOP support.
Schumer, who said the measure would put the country "on a path to roughly 40% emissions reductions by 2030," announced that he expects a vote on the legislation by next week. Sen. Kyrsten Sinema (D-Ariz.), a key swing vote, has not commented on the deal.
Noreen Nielsen, a senior adviser to Climate Power, told Common Dreams that with the new framework, "a strong signal was sent that deep pockets only go so far."
"Democrats took their biggest step ever towards showing that politicians who protect profiteers fleecing Americans at the pump are on the wrong side of history," said Nielsen. "All the money in the world couldn't stand in the way of an agreement to move forward on a bold plan to ramp up American-made clean energy, lower energy bills for families, and take on climate change."
But while climate advocates welcomed the proposal overall as a potential game-changer for the environment, they also stressed that the deal is littered with the fingerprints of the oil and gas industry, which—according to Climate Power's new analysis—has spent $63.5 million on lobbying so far this year.
As part of the agreement, Democratic leaders—including Schumer and President Joe Biden—agreed to reform the regulatory process for pipelines and other fossil fuel infrastructure in the coming months, a victory for Manchin and his industry backers.
Such reforms could clear the way for the Mountain Valley Pipeline, a fracked gas project in West Virginia and Virginia that, if completed, would spew 89,526,651 metric tons of greenhouse gas emissions into the atmosphere each year.
continues....
There are no kings inside the gates of eden
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