he’s making the same mistake as all the other tuxedo conservatives<\/a>: he assumes the people at the Fed know what they’re doing and are trying their best in good faith to make things better. I’m not convinced that’s true. <\/p>If the cause of rampant inflation was easy credit causing “too much consumin’ goin’ on,” then tightening interest rates would reduce the credit, reduce consumption thereby and reduce inflation. If the cause of rampant inflation is lack of supply, tightening interest rates does nothing to generate more supply so it won’t bring down inflation.\u00a0<\/p>
Case in point, trailers in the senior citizens mobile home park last year were selling for $80,000 when we bought ours. There were plenty to choose from. After Hurricane Ian there are two for sale, the cheapest is $120,000. Interest rates have nothing to do with it: this is a supply problem. Raising rates won’t put more trailers online.<\/p>
Similarly, strangling American oil production limits supply, causing prices to rise for everything that needs oil, including consumer gasoline, but also higher priced diesel for trucks and trains to haul goods and higher priced electricity made from natural gas.\u00a0 Raising interest rates won’t put more oil online.\u00a0<\/p>
In fact, raising interest rates makes it harder for business to afford the higher priced oil, giving them a double whammy. Hayward’s asks whether the Fed is raising rates too fast. I question whether they should be raising rates at all.<\/p>
Either I’m dumb as a box of rocks, completely failing to understand economics, or the Fed is pushing the rate hike button because it’s the only button they have to push.\u00a0 It’s not going to work and they know it\u00a0 so they need some distraction for the voters. Hence Putin, Ukraine, Trump, slavery…<\/p>
Joe Doakes\u00a0<\/p><\/blockquote>\n\n\n\n
<\/p>\n\n\n\n
Or “Fascists in the bushes”.<\/p>\n","protected":false},"excerpt":{"rendered":"
Joe Doakes from Como Park emails, for the first time in a bit: Hayward is a smart guy but he’s making the same mistake as all the other tuxedo conservatives: he assumes the people at the Fed know what they’re doing and are trying their best in good faith to make things better. I’m not […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-83542","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/83542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=83542"}],"version-history":[{"count":3,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/83542\/revisions"}],"predecessor-version":[{"id":83545,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/83542\/revisions\/83545"}],"wp:attachment":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=83542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=83542"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=83542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}