Comments for Bad Macroeconomic Policy Disproportionately Hit The Middle Class and Poor at http://www.cepr.net , comment 1 to 8 out of 8 comments http://www.cepr.net Wed, 19 Jun 2013 20:57:42 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18539 Doctors are as highly paid as they are in the US because they have managed to restrain the competition. It is not because they are better educated than most chemists, for instance, or some of the brilliant economists we know. In other countries, where there is less deliberate restriction of medical education, doctors' incomes are more reasonable. This overpricing of medical services is another factor which is making life worse for the middle and lower income people. Can't blame it all on the Fed. - Rachel Sat, 01 Sep 2012 16:38:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18534 I think not. Unemployment was the target for fiscal policy. Bretton Woods was the explicit Fed policy/mandate. When gold started leaving the country in exchange for VWs, the Fed should have responded by printing fewer dollars. This straying from a policy which would have maintained Bretton Woods was the beginning of the Feds destructive activism, the accommodation of the oil shock, which gave us a housing bubble and then Volker's crash...another housing bubble, and then another. Sickening. Now we are likely starting another, with housing prices rising even though prices are still too high relative to incomes, i.e, expectations are (too) high, the germ of the next bubble. - pete Sat, 01 Sep 2012 06:31:49 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18527 Pete, to repeat myself too, the idea that the "unemployment" part of the dual mandate somehow led to inflation post-Bretton Woods is just weird. In the real world, post-Bretton Woods, post-70s is just when the Fed & much worse, everyone else, the Congress, the Treasury & the people decided to ignore unemployment. If anything the interest rate increases (mis)targeting the anti-inflation mandate - and ignoring the unemployment mandate, were inflationary over this long run. In other words, when the unemployment mandate was added was exactly when it was ignored. Before that, under an informal but not ignored unemployment mandate, Fed policy tended to be less activist and less destructive, with low rates as Keynes had argued for. - Calgacus Fri, 31 Aug 2012 14:40:35 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18523 The dual mandate regime has been a disaster for the working class...case is closed. It was a bad idea whose time has come...the main thing that activist monetary policy does is add uncertainty and arbitrary wealth transfers to a complex economy. The information necessary to manage a 300M person economy is simply overwhelming. I picture Bernanke or Krugman as the man at the controls of the universe in Diego Rivera's mural. Sinful arrogance. - pete Fri, 31 Aug 2012 09:50:56 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18517 Look at what has happened in the markets since this morning's QE-friendly speech by Ben Bernanke. Stocks up, which is good for Goldman Sachs bankers. But virtually every commodity across the board is up too, with gasoline, heating oil and crude leading the way. This is exactly what happens EVERY SINGLE TIME Bernanke or another Fed member talks about more easing. Can someone please explain how it's "good" for the Middle Class that the Fed's promises of easy money serve only to juice commodity prices ... while real wages don't go anywhere? What's that? Silence? What we should be asking for is LESS Fed. That would stop the erosion of real incomes that this Fed has engineered. - Mike_in_FL Fri, 31 Aug 2012 07:58:09 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18512 You say that high unemployment leads to lower wages. No, it is the employers who take advantage of the high unemployment to pressure their employees to accept less so as to make higher profits. Later on, you refer to the "ineptitude" of the Fed to "allow" the housing bubble to grow. No, the real role of the Fed is to help the banks achieve greater profits... and the housing bubble was spectacularly profitable. Then, when the bubble burst, the Fed once again helped out the banks by putting trillions of dollars at their disposal. Once again, Dean Baker, like every other economist, ignore what is most obvious: that what drives the economy is profits. - Ellis Fri, 31 Aug 2012 06:27:31 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18504 [quote](Although this downturn may have had some downward effect even on the wages of lawyers.)[/quote] My two favorite examples? The Boston firm Gilbert & O'Bryan put out an ad for an associate. The salary? $10,000 per year. According to SmartMoney, they received at least 35 applications. (http://www.smartmoney.com/plan/careers/10-things-law-schools-wont-tell-you-1338933018704/#articleTabs) Then of course there's the government's hiring freeze, which makes sense given the political climate, but it didn't stop the DOJ from posting ads in various districts (e.g. Western VA) for Special Assistant U.S. Attorneys. The compensation? $0.00. Those who combed the ABA's graduate employment data found that 15% of the class of 2011 were working in "Business and Industry" (non-law jobs) and 17.5% were unemployed or not in the labor force (e.g. doubling-down on LL.M.s). - LSTB Fri, 31 Aug 2012 02:31:43 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/bad-macroeconomic-policy-disproportiionately-hit-the-middle-class-and-poor#comment-18502 The monetary policy only in part created the housing bubble. It was the bad and inadequate regulatory that allowed housing to expand. Monetarists have for years argued that fiscal policy should not be used to manage an economy, that the Fed should "Go it alone". This philosophy and bad fiscal policy that put too much money into tax cuts for the wealthy and not enough money to public goods and services kept employment and wage growth too low. There was no response to the 2001 recession that used Federal dollars to create jobs by increasing infrastructure spending or giving money to the States to keep projects on track. The movement away from job creating fiscal policy is the wrong road. - bakho Fri, 31 Aug 2012 00:39:35 +0100