But raising interest rates will. I foresee a bunch of businesses going out and a massive influx of unemployed workers and former business owners, which sadly, is one of those things that leads to more militant facism.
Raising the interest rate won't contract the demand for real labor. It will simply constrict the supply of treats, as smaller firms tumble into bankruptcy.
It'll also spike domestic debt financing, which will trigger higher deficits and drive up the import/export deficit. Absolutely poisonous for smaller and more rural communities.
I don't doubt we'll see more militant fascism. But the places we'll see it - the rural northwest and the deindustrialized Midwest - are already firmly in the grip of concervative politics. These fascists will become a destabilizing influence on corporate control of smaller territories. It'll be a thousand little Jan 6ths.
Raising the interest rate won’t contract the demand for real labor. It will simply constrict the supply of treats, as smaller firms tumble into bankruptcy.
So those bankrupt firms won't be employing anyone anymore, which will decrease the demand for labor and make unemployment go up.
Smaller firms can get replaced with larger ones. People can change what and how they consume. We saw this shift with Walmarts - one big box would replace an entire downtown's worth of independent retailers. But unemployment didn't rise with the advent of Walmart. You just saw more indie owners become assistant managers and department supervisors, while the retail workers changed hats.
Higher interest rates put firms like Walmart in a bind, because it does nothing to change the man-hours they need to maintain operations. They either give up territory to a rival firm willing to pay higher wage rates or they find somewhere else to cut.
I suspect real estate prices will be what really take a hit in the event of another Volcker shock.
Not if they're fired and their disposable income shrinks. Unemployment is pretty low right now, it's going to rise when interests rates go up. That's the intent: they want to increase the reserve army of labor, so people are content with more miserable working conditions, and large companies can increase their exploitation-rate.
Unemployment is pretty low right now, it’s going to rise when interests rates go up.
I don't think there's enough slack in the market to allow for it. The pinch is going to have to happen in real estate or admin pay, unless you can run a business with zero employees. We might try and pivot to serfdom by way of non-compete contacts. But we don't have enough warm bodies to tolerate layoffs.
At a certain point, the Labor Theory of Value raises its ugly head.
I don’t think there’s enough slack in the market to allow for it (...) But we don’t have enough warm bodies to tolerate layoffs.
I don't really understand what you're trying to say, but but you can't deny that more people will become unemployed as more businesses go bankrupt, which undoubtedly is going to happen when interest rates go up. In 2021 there was a historically low number of bankrupcies , because the low interest rates kept zombie-companies going. When interest goes up, those companies lose their only lifeline. Other companies won't be willing to hire all the newly unemployed workers and thus a bigger reserve army of labor will "discipline" workers in to accepting worse employement-conditions.
you can’t deny that more people will become unemployed as more businesses go bankrupt
Demand for stuff will persist. We already did a huge business consolidation over the 90s/00s. Unemployment didn't fall, people just started working for larger businesses. Hell, the COVID crash failed to produce any long term unemployment. It just accelerated retirements, further contributing to the labor shortage of today.
The real pinch will happen in the real estate market, as the threat of bankruptcy drives down rents.
But raising interest rates will. I foresee a bunch of businesses going out and a massive influx of unemployed workers and former business owners, which sadly, is one of those things that leads to more militant facism.
Raising the interest rate won't contract the demand for real labor. It will simply constrict the supply of treats, as smaller firms tumble into bankruptcy.
It'll also spike domestic debt financing, which will trigger higher deficits and drive up the import/export deficit. Absolutely poisonous for smaller and more rural communities.
I don't doubt we'll see more militant fascism. But the places we'll see it - the rural northwest and the deindustrialized Midwest - are already firmly in the grip of concervative politics. These fascists will become a destabilizing influence on corporate control of smaller territories. It'll be a thousand little Jan 6ths.
I suppose it depends on how lenient the bankruptcy terms are on smaller firms.
:biden-harbinger: 2005 Bankruptcy Abuse Prevention and Consumer Protection Act
So those bankrupt firms won't be employing anyone anymore, which will decrease the demand for labor and make unemployment go up.
Smaller firms can get replaced with larger ones. People can change what and how they consume. We saw this shift with Walmarts - one big box would replace an entire downtown's worth of independent retailers. But unemployment didn't rise with the advent of Walmart. You just saw more indie owners become assistant managers and department supervisors, while the retail workers changed hats.
Higher interest rates put firms like Walmart in a bind, because it does nothing to change the man-hours they need to maintain operations. They either give up territory to a rival firm willing to pay higher wage rates or they find somewhere else to cut.
I suspect real estate prices will be what really take a hit in the event of another Volcker shock.
Not if they're fired and their disposable income shrinks. Unemployment is pretty low right now, it's going to rise when interests rates go up. That's the intent: they want to increase the reserve army of labor, so people are content with more miserable working conditions, and large companies can increase their exploitation-rate.
I don't think there's enough slack in the market to allow for it. The pinch is going to have to happen in real estate or admin pay, unless you can run a business with zero employees. We might try and pivot to serfdom by way of non-compete contacts. But we don't have enough warm bodies to tolerate layoffs.
At a certain point, the Labor Theory of Value raises its ugly head.
I don't really understand what you're trying to say, but but you can't deny that more people will become unemployed as more businesses go bankrupt, which undoubtedly is going to happen when interest rates go up. In 2021 there was a historically low number of bankrupcies , because the low interest rates kept zombie-companies going. When interest goes up, those companies lose their only lifeline. Other companies won't be willing to hire all the newly unemployed workers and thus a bigger reserve army of labor will "discipline" workers in to accepting worse employement-conditions.
Demand for stuff will persist. We already did a huge business consolidation over the 90s/00s. Unemployment didn't fall, people just started working for larger businesses. Hell, the COVID crash failed to produce any long term unemployment. It just accelerated retirements, further contributing to the labor shortage of today.
The real pinch will happen in the real estate market, as the threat of bankruptcy drives down rents.
Because of low interest rates. Unemployment will go op if the fed raises interests.