In a speech last week, Federal Reserve Board Chair Janet Yellen inadvertently told us why Congress should set a 4 percent unemployment target for the Fed in its conduct of monetary policy, as is proposed in a new bill put forward by Michigan Representative John Conyers. The context was Yellen's dismissal of such a target. Certainly the Federal Reserve Board cannot just pick any number and say it will get the unemployment rate to that level. There are limits posed by the economy that can prevent the Fed from hitting an unemployment rate target despite its best efforts. However, this is also true of the 2.0 percent inflation target that the Fed has chosen for itself as a basis for policy over the last decade. But the fact is that the Fed cannot simply set any inflation rate it likes.
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Wages are rising, finally, and prices are not--a rare confluence in recent decades. American workers need this to continue as long as possible. So do their bosses, in fact, because workers are the consumers that drive economic growth and thus corporate profits.
Couple this with the disappointing jobs growth numbers from September 4, and it is not unreasonable to expect that there is still room to push towards the twin goals of maximum employment and price stability. A premature rate hike could run the risk of halting that process.
Their policies have to maximize the purchasing power of consumers that power most economic growth. If consumers can't or won't spend more, then our economy can't grow as it should.
What America needs is empowered citizens. We need more jobs; we need to pay the hardworking employees a fair wage. We need enough income flowing that adequately rewards the value workers create to help better educate all our children.
You know, Hillary, I know these rules won't work every time. But I believe adopting them will keep your spirits up, and show women voters what they want in their woman POTUS.
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A coalition of California community groups and a local legal aid agency have come up with a novel way to hold a major LA area bank accountable for the devastation it has caused Southern California communities as a result of its risky and predatory practices.
The correct policy for the Fed is to slowly reduce interest paid to banks on their excess reserves and carefully raise interest targets on the federal funds rate if the growth rate of U.S national income continues to follow the IMF predictions of 2.5 percent this year.
I am reading "Daniel Patrick Moynihan, A Portrait in Letters of an American Visionary" edited by Steven Weisman. It is a good title because Moynihan was indeed a visionary.
Social anthropologist Janine Wedel, author, most lately, of Unaccountable: How Elite Power Brokers Corrupt Our Finances, Freedom, and Security, has spent decades getting to the bottom of how powerful people wield influence. Truth and transparency, she warns, have devolved into a performance art.
If the Fed holds interest rates too high for too long, it can slow economic growth and trigger a recession. It did precisely this, intentionally and to good effect, in the early 1980s to tame exceedingly high inflation rates.
U.S. financial markets have been highly volatile but with little to show for investors, as opposed to traders, who make their best livings from pointless volatility, for all the swaying back and forth since the start of 2015.
If America is to shed the title of "Land of Inequality," this is how it is going to happen: by more people becoming aware of how the Fed's monetary policy affects them and demanding that it change.
Have Fed officials, including Chairs Ben Bernanke and Janet Yellen, continued to destroy the source FOMC transcripts following the Greenspan Fed officials who voted to destroy them in 1995?