With inflation uncomfortably high, climate change causing Northern Hemisphere disasters and the Delta variant undermining economies here and abroad, an indecisive Federal Reserve Board scheduled meetings this week to rethink its ultra-low interest rates. Policymakers considered putting the brakes on a $120 billion-a-month bond-buying spree designed to keep long-term lending rates miniscule. As usual, the Fed’s intention was to incentivize borrowing, spending and debt-accumulation during the COVID crisis. This comes at a time experts insist the U.S. economy is gradually recovering from post-pandemic recession and jobs, ostensibly, are on the upswing. But a bold new era has dawned in America’s workplaces. As bosses struggle to attract and retain employees, even workers sans unions are feeling empowered. Necessity, in the form of safety and pandemic-induced austerity, taught us to trim our excesses, stay home and be less, more functionally gregarious. Job searches are becoming more about personal gratification than financial desperation. So long as immunizations stagnate, variants find oases and vaccine-averse deaths and hospitalizations mount, many find businesses and other venues, where shots and mask-wearing aren’t mandated, are minefields. In this “pandemic of the unvaccinated” the “great resignation” continues. Long-dissatisfied workers, trapped in disheartening jobs, are exploring other options. Cubically apportioned office space and service sectors are losing out to at-home parenting, working and completing household projects. A new progressive solidarity has laborers demanding higher pay, improved benefits and European-style, less-exploitative social contracts.
Fed chair Jerome Powell gambled near-zero interest rates, promoting commodity sales until employment stats could rebound, wouldn’t fuel inflation. But prices, pushed by “return-to-abnormal” demands COVID put on hold, shot up 5.4% in June from last year, the biggest increase in 14 years. In fact, June’s surge marked a 4-month period of sustained, unexpectedly high price jumps, some perhaps choreographed by corporations and Wall Street to bulldoze new, more progressively aesthetic landscapes. July numbers will likely erode recoveries further as avaricious businesses gouge to recoup 2020 losses. Inventory shortages brought about by shutdowns, manufacturing cutbacks and pandemic-opportune production retooling (i.e., displacing humans with robots and other automation) also boosted inflation. Despite 1 in 7 of us food insecure, opposition to overdue wage increases, sick leave and other workers’ benefits also contributed. To drive prices down again, citizens must be disciplined enough to buy less by minimizing waste and consumption. Many, however, lacking will and common sense to regulate supply-and -demand, find freedom in the prison of their stubborn, steady habits. Gas prices are stabilizing, but housing, food and auto costs are going through the roof.
For quantitative easing of prices, the Fed must also raise its interest rates. Powell recommends an average inflation target just above 2% to correct years of negligible inflation during which interest paid on savings was chump change. If classrooms refill in a month, despite resurging COVID, more parents may accept jobs forcing them from home. If hiring’s robust, purchasing $120 billion of assets per month is worse than spurious for Powell. By buying corporate and shadow bankers’ debt, bailing out junk bonds and providing zero-interest loans, the Fed’s already impelled excess borrowing and inflation, enabling billionaires to skim $1.3 trillion in 6 months from COVID’s toil-and-trouble. By socializing risk while privatizing profits, the Fed’s created a no-lose casino, rewarding investors for gobbling corporate debt, funneling trillions into financial markets and taking more and more risk, presuming government will bail them out. With housing, auto, bond and other markets simultaneously overpriced, the economy’s susceptible to shocks. Avarice, not pride, precedes that fall.
Scott Deshefy is a biologist, ecologist and two-time Green Party congressional candidate.