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Home Publications Blogs Beat the Press How Many Workers Should Lose Their Jobs To Avoid Upsetting the Dainty Financial Markets?

How Many Workers Should Lose Their Jobs To Avoid Upsetting the Dainty Financial Markets?

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Friday, 06 May 2011 07:05

This is the question that readers of a Washington Post article on the administration's efforts to lower the value of the dollar should be asking. The article tells readers that the Obama administration and Federal Reserve Board Chairman Ben Bernanke probably both want a lower dollar to help correct the U.S. trade imbalance and create jobs, but that they can't say so openly for fear of upsetting financial markets.

Since the delay in lowering the dollar to a more sustainable level is causing millions of workers to be unemployed, it would be worth asking how many workers should be forced to suffer unemployment for long, just to keep the financial markets from being troubled. Economists believe that in the long-run financial markets respond to the fundamentals in the economy, so the worst that is likely to result from a bit of concern is a period of excessive volatility in the financial markets. This can lead to some traders losing or gaining large amounts of money; the long-term impact on the economy is likely to be trivial.

It is a very damning statement about the Fed and the administration if, as this article implies, they care so much about financial markets that they are forcing millions of workers to be out of work just to avoid a short period of uncertainty.

Comments (1)Add Comment
...
written by Jeff Z, May 06, 2011 10:53
Workers? We don't need no stinkin' workers!

Unless they're willing to polish our silver for a ration of gruel!

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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