neoliberals not understanding that employment is more important than interest rates
They only have two levers: money supply and interest rates
Source: I took the Econ AP exam 18 years ago
You could just do a Keynes-style thing and start massive projects to provide employment at low interest rates, we all know how shitty all the infrastructure is and how much needs to be done for supply chains. But yeah, if you give up on government actually directing anything then you just get nothing. Feels weird living in the time period future marxists will say "disproved" neoliberalism (same way the 30s disproved classical economics and the 70s disproved a lot of Keynes' assumptions).
we all know how shitty all the infrastructure is
I am literally afraid to drive over bridges and overpasses these days, it's ridiculous
neoliberals not understanding that employment is more important than interest rates
neoliberals keep unemployment high on purpose to maintain a reserve army of labor. this suppresses wages, and creates a bunch of desperate people who will scab in the event of labor unrest.
neoliberals care about interest rates more than unemployment because M - C - M transactions are inherently usurous and how capitalists make their money.
what @MolotovHalfEmpty said, but I'd also add some context
for most people, the purpose of trade is to exchange commodities of equal value. You have shoes you don't need, but you need a new shirt. you sell your shoes, get money (the medium of exchange) and use that money to buy a shirt. money only serves as a medium of exchange rather than an end unto itself. But capitalists wish to profit rather than exchange fairly. so they buy cheap and sell dear. They sit on commodities until there is a shortage. Or they charge interest. For most people, their transactions are C-M-C. They wish to get rid of a commodity they have too many of, and get a commodity of equal value they have need of. But they don't wish to run around all day bartering so they use money as a medium of exchange. The capitalist however starts off with money, and desires to end with more money. The money they end with has to be more than the money they start with so they're always looking to get the upper hand in any exchange. They're not looking for fair exchange but unfair exchange. It would be pointless to buy shoes for $5 and sell them for $5. The point of an MCM exchange is to buy something for X amount of money and sell it for greater than that amount. The capitalist wishes to accumulate money because it represents infinite potential. Its only use value is to buy commodities but because commodities fluctuate in price, it makes sense for the capitalist to throw their money back into circulation over and over again to take advantage of the fluctuating prices of commodities and end up with more money than they started out with.
this is all stuff marx talks about in Das Kapital
to tie it back into the thread this is why capitalists care so much about interest rates. High interest rates means it's easier to profit from investment. People with money make more money by virtue of simply having money. People without money go further into debt by virtue of needing money. They also like high unemployment because it means desperate workers unlikely to strike are in good supply.
on rare occasion capitalists care about CMC more than MCM, for example when hyperinflation happens and it suddenly becomes necessary to get rid of all their money and to instead buy up important commodities (like food, water and fuel) when people are in dire need of them.
Top explainer :marx-ok:
Mine was a bit
lazyconcise as it's dead late here and I need to go to bed. :sleepi:
Money - Commodity - Money
Basically any business transaction where capital buys something and then sells it for more than that. Capital accumulation by that method.
why do you think that? 5 years of 6% unemployment sounds more survivable to me continued 13% inflation.
well I think that because those 6% of people are likely going to be in trouble financially
no doubt but inflation is also doing that.
The thing that maybe makes inflation a different beast is that rates get locked in if people expect it to continue. You sign a lease for a year, mortgages go on for years. You commit to 13%.
I don't know how unemployment is worse than inflation for sure though.
Inflation is felt much more widely than unemployment and puts more pressure on businesses to cooperate with labor. Unemployment localizes discontent to those it immediately affects. Everyone feels inflation. So they’re trading a problem which the affluent experience for one that they don’t
Unemployment localizes discontent to those it immediately affects.
and this also has upsides right? It's a targetable group. There's nothing like unemployment insurance for the entire price level.
Also the great recession lasted a few years of high unemployment but it's not like it was the same 20 million people from 2008-2012. It was higher rates of layoffs so that 20 million had different people in it from one quarter to the next. Still not localized discontent. A recession IS felt broadly, that's what makes it a recession.
I got laid off from covid and it basically derailed me so I get it
If we're talking egalitarianism here, the most marginalized already aren't employed. Employment favoring policies aren't doing much for the disabled, the elderly, the unhoused, the undocumented.
you say "why throw more bodies on the pile?" as though people outside the labor force getting incinerated by inflation for the sake of perpetual full employment and perpetual growth wouldn't also be bodies.
This doesn't seem like the same site that mocks the line go up business ideology. If you don't think there's a recession to balance out the excess then you're just on that :free-real-estate:
My local chain grocery stores sells a single lime for $1.75 but I can drive down the street and get a lime for $0.25. That is an incredible price difference and I want to know which one they are using to measure inflation. It seems maybe inflation is mostly capturing the fact that grocery stores can charge a ton more and people will pay it e.g. what you are saying about price gouging.
The feds were talking about how labor demand was high, and not in equilibrium with supply, so they can bring it back to equilibrium faster by making it slightly more difficult for businesses to borrow money so wages don't continue to go up. Sure, that makes sense and isn't horribly cruel. But this guy saying that we need to be cruel to people directly because we need to go back to a time where 10% of people are too poor to shop at the expensive grocery stores and go somewhere cheaper. It's completely unnecessary.
The unemployment Summers is talking about would have to be in the middle class since they have the most impact on spending. It’s going to radicalize a lot of people.
Unfortunately the right is so far ahead of the left on organization and political power we should probably be worried.
Yeah. Look which way the radicalization went in Weimar Germany.
Now consider that the American left is even weaker than the German left in the 1920s and 30s.
You can buy ears of corn for $10 at whole foods, of drive 5-10 min and buy them for $2.50 from the farmer
There's a lot of reasons I love my dear sweet mother and one of the trivial ones is that she hates the voice acting and most of the characters on Family Guy. The only 2 she likes are Brian and Stewie. She absolutely despises Peter and Lois. She basically boycotted watching TV after dinner with my dad if he threw on Family Guy and it worked.
Edit: Also, aside from my brother, she's the most lefty of my immediate family. She lets me rant about Capitalism when I visit.
Get rid of the ghouls manufacturing unemployment with this one neat trick :lenin-shining:
I try to be but im not eloquent enough for people to listen to me. I still rail on and on about smashing capitalism and building communism tho!
I like to think that when people fall short compared to Lenin, they focus way too much on his writing and not nearly enough on his ruthless willingness to do crime to fund the revolution
It's "fun" to see even the usual sociopathic economists say that this theory has been proven blatantly wrong over the past year, then see folks like Summers double down on the anti-worker incantations.
The field can't even reign in its own monsters.
Because ultimately it is about capitalist power, not about economics.
Well yes. Summers is just a mouthpiece for the bourgeoisie. But it's funny to watch people that take themselves so seriously fail to institute any peer standards whatsoever, instead shrinking into their little corners where they whitewash some smaller bourgeois monstrosity.
Don’t worry, we’ll also get inflation down by starting student loans up again :)
Nah the recession was already engineered by the money printer being on for 10 years. What their engineering is a soft landing in a recession, such that we dont have a complete collapse and a great depression.
So....they are planning an economy?
What's their problem with Cuba or China again?
Larry Summers gets the wall. Motherfucker did so much damage to the less fortunate with his policies. Also fuck the heavy lifting that saying it was in "London" does. I am not going to damage my brain by reading up on it, but I'd bet dollars to dimes this motherfucker was giving the speech in or at least adjacent to the "City of London" which is a city within a city, like the Vatican, but one where money is worshipped.
Ah yes, lets make 6% of the working population suffer for 5 years, that will help.
If I were to get conspiratorial, they let Biden win for one good reason.
He is the closest the US has to a left-wing leader and now the democratic party gets to do exactly what it is intended for. Whenever enough people seem to think that the right might not be as perfect as they are told, the dems make the perfect fall guys to take the blame and restore the GOP's good reputation.
If they really wanted to do this, they would have let Sanders win. Letting Sanders win and then making him the fall guy for a million different crisis would have done as much damage to the left as Woodrow Wilsons purges after WWI.
From what I can gather, Summers is pretty explicitly on team Democrat, and works as an advisor for them when they are in power, so I don't think he thinks in terms of partisan / party political benefits. I think he makes the same mistake as every other neolib, which is assuming that he is able to transcend ideology and just work directly with the facts in front of him.
Well, the last few recessions were (primarily) brought on by other entities, I suppose we're due for another government designed recession
Once the GOP is back in power, we'll probably see cuts to unemployment benefits as well. Seems like a matter of time after the stink raised about no one wanting to work.
