Wage & Price Controls
If you can’t treat
someone with dignity and respect, get out.
This year the
shortfall of inflation from 2 per cent, when none of those factors is operative,
is more of a mystery. I
will not say that the committee clearly understands what the causes of that are.
By J.M. Hamilton (9-30-2017)
Ten thousand salutes
to Lt. General Jay Silveria, who reminded the Air Force Academy - and a great
many Americans - that racism is unacceptable in American society. If you
haven’t had an opportunity to watch the General’s speech, please watch it here.
Many Americans –
quite a few w/in Trump’s base – have confused flag waving NFL games, and
peaceful player protest over the abhorrent treatment of minorities in America
with a lack of patriotism. A few Americans – especially establishment
Republicans – have confused unlimited war, and a lack of support for endless
war by a great many Americans, as being disloyal to U.S. troops.
General Silveria
certainly disabused all Americans of the former belief on Thursday. When faced
w/ racism at the Air Force Academy’s preparatory school, he wanted to send an
entirely different message. The message was simple: if you’re racist
or a misogynist, or can’t show respect for others, “get out.”
JMH has always
believed that two to three years of compulsory military service (like that
which exists in Israel) would do this nation a great deal of good. Not
only would it unite all Americans with a common experience and bond, but it would
also make Americans more aware of U.S. foreign policy, our global empire,
endless war, and the cost of our empire. Moreover, compulsory
service would help instill a sense of sacrifice and perhaps unity.
The U.S. military’s
early training – like high-grade psychedelics – has a unique way of atomizing
the ego, crushing the lizard id, and making recruits realize they are apart of
something far greater than themselves. Talk about being born again... this is the place.
Or so I have read.
Wouldn’t it be
wonderful if General Silveria could share his message with the Republican led
House of Representatives, and many of the GOP held state legislatures? Better
still, wouldn’t it be great to see General Silveria in the U.S. Senate or White
House some day?
The nation just might
be well served in seeing such events come to fruition.
If this blog has been
good at nothing else, JMH would like to think this experiment has been good at
exposing the hypocrisy of many of the elites within our society, and upon the
world stage.
Common stories and
themes, pointed out on this site over the years, are:
How capitalism is
good and socialism is bad, until it comes time to bailout the Wall Street banking cartel w/ trillions and trillions of dollars.
How no business in
America could possibly think a revenue loss would be good. And yet,
Republicans like to trot out a tired trickle down tax policy to this very day,
where – magically – cuts in taxes for the rich will create government budget
surpluses (thirty-seven years of evidence to the contrary notwithstanding).
And the manner in
which private equity - which strips businesses of labor, front loads profits
for an elite few, and loads companies up with a debt chokehold – is the
antithesis of capitalism (not capitalism defined, as the Robber Barons would
have us believe). Moreover, the private equity business model kills
jobs, opportunity, innovation, the tax base, businesses, leads to consolidation
& monopoly, and curtails investment options.
Meanwhile, the
Congress and POTUS do nothing.
Today, we touch on
wage and price controls. For free market &
capitalism enthusiasts, nothing could be more abhorrent or sketchy than
government intervening into the market place to set price. President
Nixon was the last politician to attempt wage and price controls on a grand
scale, and it did not end well. But magically and mysteriously,
when major corporations intervene into the market place – collusively, and as
an entire industry – to contain labor’s wages so as to maximize management’s,
ownership’s, and stockholder’s profits…. It’s all good.
Consider the
following:
During the Obama
years, the Justice Department busted the
elite of Silicon Valley for colluding not to compete for labor. Hence
suppressing wages. How many more industries are engaged in these
nefarious practices? We don’t know. The investigations
conveniently ceased.
Noncompete
clauses are pervasive throughout the economy, so that people
attempting to apply their skills at a different company willing to pay a higher
wage, are effectively kidnapped. Capitalism is good when your
employer is engaged in it, but workers shouldn’t dream of making employers
compete for their labor.
And the NY
Times did an outstanding piece this week on how fast food franchises –
who sponge off the government by failing to pay a living wage – are allegedly,
contractually, colluding not
to hire employees from one another. This matter is now before the
courts.
There’s that
hypocrisy again, and yes, the system is rigged, Big Time. If the
government attempts to hold wages in check, say to contain inflation, it’s bad. But
if the private sector shafts employees to maximize returns, and keep the Fed’s
easy money spigot wide open… It’s all good.
In a piece written earlier this
year, JMH pointed out how – despite massive bailouts and exorbitant Fed largesse showered
upon the Wall Street banking cartel, post-crash – mysteriously, the Fed or none
of the Goldman alums w/in government, saw fit to tie caveats & conditions
on the use of bailout money by the major banks. Such caveats &
conditions might have kick-started the economy, helped distressed homeowners,
and reined in derivatives and the collateralization of debt. Who
knows, TBTF institutions might have been required to spinoff as a condition to
the bailout.
(It should come as no
surprise then that POTUS
Obama – with the Democratic Party a smoking wreck - is on his world
vindication tour, and collecting checks of up to $400,000, perhaps higher, from
Wall Street for speaking engagements.)
Meanwhile, through
interest rate suppression and quantitative easing, the Federal Reserve has kept
the cash spigot turned way up, so that the stock market has climbed to record
heights; debt
yields no longer come close to correctly valuing the risks involved;
and many corporations & governments around the globe remain leveraged to the hilt (their bankrupt
balance sheets covered up w/ central bank easy money policies). Retirees,
pension funds, savers, fixed income investors … out of luck.
The Fed likes to say
its mandate is price stability and maximum employment; and the Fed was hoping see
inflation hit two
percent before ending QE and raising interest rates. Per
Ms. Yellen, the lack of inflation is a complete “mystery.”
And yet, once we get
past the structural impact of globalization, AI, automation, and the failure of
a cartels and monopolies to create enough jobs w/in the neoliberal economy… we
are left with the fact that major corporations & multinationals have set up
wage controls throughout broad swaths of the U.S. economy, so as to maximize
management and shareholder returns.
There’s your inflation,
Ms. Yellen, or the lack thereof.
Neatly controlled by
the Oligarchy. To recap, suppressing U.S. wages serves two purposes: one, it
cuts down on a large source of expense, enhancing income statements; and two,
knowing that the Fed’s easy money policies are tied to inflation, corporate
wage controls effectively insure that central bank easy money policies continue
unabated.
(Low inflation aside, Ms. Yellen appears to see though the smoke, and will
begin to end QE in October of this year.)
Where else in history
have we seen labor oppression on this scale?
Oh yes, post- Civil
War, there were sharecroppers. There were company towns and company
stores, in the 19th and 20th centuries. And
there has been indentured servitude and slavery around the globe, since before
Biblical times and up to the present day.
Through its
hyper-accommodative policies, the Fed, itself, has intervened into the market
place and set the price of the greatest commodity of all w/in the financial
economy, the price of money. Yet another, double standard:
capitalism and rugged individualism for the people, and social welfare for
the Oligarchy, courtesy
of central banks.
The Federal Reserve
and central bank policies have had a hand in creating a great many distortions throughout
the financial markets, w/in the global economy, and have created a Neo-Gilded
Age.
The ramifications of
this Neo-Gilded
Age are being felt in elections throughout the West, and via global
political instability.
Just ask our Teutonic friends from across the pond.
Copyright
JM Hamilton Publishing 2017
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