Wall Street and the Cycle of Crises
Regular readers of the leftish press have recently been presented with a raft of pleas coming from intelligent and occasionally articulate economists that the Federal Reserve not to raise interest rates. The general point being argued is that interest rates are the price of borrowed money, that raising them serves as a regressive tax because poorer borrowers pay a higher percentage of their incomes in interest expense than do rich people, and that the economy is still not fully recovered and higher interest rates risk sending ‘it’ lower again. Aiding the effort is the general loveliness of the people making the pleas versus the pissed-white-guys-in-suits contingent of monetary cranks who hate everything that the Federal Reserve does on the opposing side.
However, a wrinkle in the veil of loveliness can be found in ambiguity around the stated issues from none other than the Federal Reserve. The Federal Reserve is aware of the arguments of loveliness and is now wavering ever-so-slightly in raising rates only because a few stock markets have quite righteously shat the bed. Unless one conflates financial crapola with ‘the economy,’ a conflation the forces of loveliness insist is not warranted, then the Federal Reserve is now ambiguously poised to do the wrong thing for the wrong reasons (says the loveliness choir). The fact that all that the Federal Reserve seems to care about is ever-rising stock prices would seem to beg the question of why the forces of loveliness read so much more into the power of interest rates?
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