According to the jobs report released, the US added 375,000 new job well above expectations.
The Fed, which isn’t interested in inflation, sees the job market as too robust and the pressure to increase wages as a concern and therefore will increase the key interest rates another 3/4’s or 75 basis points. There are over 11 million job avaliable above the number of applicants. Fed officials regard the current job market as unsustainably tight https://www.reuters.com/markets/us/jobs-blowout-means-more-p…
The Federal Reserve’s only concern is to dampen wage gains after 20 years of stagnant wage compensation. The Federal Reserve is willing to sink the US economy into years of recession in order to reduce wages.
“The BLS data shows that employee compensation has fallen from an average of over 62% between 1950 and 1975, to 61% between 1976 and 2002 to an all-time low of 57% post 2002.”
Chart at link:https://www.macrobond.com/blog/the-non-decline-of-the-labor-…
Most of you are not in tune with what is happening in this economy.
In October 2020 I spoke with the owners of the largest manufacture in my home town. We were sitting in a clubhouse having lunch at tables that were close together and got to talking. The two of them were brothers. I know two of their kids my generation.
I suggested to them that 1981 to 2020 had been slow real GDP growth. That 1949 to 1980 had been much faster real GDP growth. The brother who is the most outspoken stated, “like 1956 when we were only 134 million people in the country”. To which I replied, “China has 1.4 billion people and has a real GDP growth rate of 6% for a very long time now”. The brothers got it instantly.
Their factory is the largest of its sort on the east coast providing carpentry wood trims for major projects, hospitals, casinos…The factory does over $50 million in business. The factory is a union shop. The brother want the union.
The heart of the industry for their corporation is how fast the US economy is growing.
If you want a slower growing economy over the next three decades keep it up.
If you want a faster growing economy over the next three decades…you opt for demand side economics. The central modification over the last period of demand side economics is reasonable tax rates on the wealthy.
The debate on childcare in congress is honest and centered on cost. Cost is relevant to the nation’s wealth. Coming out of 40 years of supply side econ we have under performed for the entire period. Longer term we will have universal childcare because of the huge economic opportunity it affords our nation. For now in the balance of things it is hard to afford. We were left nearly entirely high and dry by supply side economics.
If you want a faster growing economy over the next three decades…you opt for demand side economics. The central modification over the last period of demand side economics is reasonable tax rates on the wealthy.
California is taxing the wealthy and it has yielded many benefits already. So California is going to do more taxing of the wealthy:
Millionaires paying for electric cars: This measure would impose a new 1.75% tax on any individual’s income of more than $2 million per year to raise between $3 billion to $4.5 billion each year to fund a collection of greenhouse gas reducing initiatives. Most of the money would go toward new incentives for Californians to buy zero-emission vehicles and to build new electric charging or hydrogen fueling stations. A quarter of the new money would go toward wildfire fighting and prevention efforts.
When I say in this period of demand side economics the US is modifying how much it taxes to the wealthy, my comparison is the 1950 top bracket rate of 90% on income.
CA is not anywhere near a 90% rate on the very wealthy.