[Gibbon1]

Reminds me of a comment I think by Nancy Teeters the first female Federal Reserve board member. She said the other board members thought they could savage the US manufacturing industry to kill wage inflation and break the unions and it would come right back once they stopped. And it didn't.

[inopinatus]

From the other side of the Atlantic this sounds like straight Thatcherism, in which Chicago-school monetarism was an ideological anti-union weapon, and the Thatcher cabinet was not coy about it. However I think the US went that way first even if Reaganomics came later.

[scrps]

I think a lot of that in the US got spun up with Nixon, Reagan brought a lot of it to the mainstream though. Both of them hated unions with a passion that is for sure.

[johnebgd]

Unions are the best of all the bad solutions we’ve come up with so far for labor to compete with capital. The worst of course is collectivism through government, though that’s being tried again…

[AnthonyMouse]

The best solution is antitrust enforcement and removal of anti-competitive laws/rules lobbied for by incumbents. When companies have to compete with each other for labor and customers, wages go up and prices go down. Whey they consolidate they can charge monopoly rents.

Unions often even make this worse because they'll latch on to a monopolistic employer and then lobby with them to retain the monopoly at the expense of all the workers who are their customers rather than their employees.

[varispeed]

> removal of anti-competitive laws/rules lobbied for by incumbents.

If even if there are such ideas in new government, they quickly disappear over wine and steak dinners with the lobbyists.

Unfortunately this is not seen as bypass of democratic process. Nobody voted for having less rights and any bargaining power stripped and yet here we are.

That's where security services should come in (in many countries protection of democracy is their main statutory duty) - but they are not doing their job tax payers pay them to do.

[AnthonyMouse]

Arguing that we shouldn't do something because it's hard to enact is defeatism. When it's the thing you need to do you need to do it anyway. It's not like anything else that would actually work would be easier to pass -- the thing you want is the thing they don't want.

[lazide]

Why would Capital want competition?

[thepryz]

Where is collectivism being tried again?

Sure there are a number of Democratic Socialists and other progressives winning elections and driving changes but everything I’ve seen policy-wise has been directly targeted areas where unchecked capitalism has clearly failed their constituents. Even in those cases, there’s no dramatic shift towards government ownership.

[rootusrootus]

> there’s no dramatic shift towards government ownership

Interesting that you mention this. It's not exactly the same thing, but someone in another thread here on HN pointed out that the feds have been acquiring non-trivial stakes in a number of companies. More than just the one or two that I had seen in headlines.

It's funny, because it's a bigger overt push in the direction of actual socialism than the dems have ever tried, by the group of people who most love to use socialism as a boogeyman.

But the argument in favor of it seemed compelling on it's face, at least worthy of debate.

[frankharv]

Unchecked capitalism?

The new NY city mayor wants to convert parks into low income housing.

https://abc7ny.com/post/mayor-adams-makes-elizabeth-street-g...

[trashface]

FWIW Teeters was apparently one of the more dovish from that era and didn't think the high rates were a great idea: “You are pulling the financial fabric of this country so tight that it’s going to rip...once you tear a piece of fabric, it’s very difficult, almost impossible, to put it back together again.” An analogy which she also said none of the men understood because they had never sewn anything

[seg_lol]

Sociopaths. It breaks me to see the Fed use interest rates to cause unemployment as the lever against inflation. It all seems so cruel.

[zahlman]

They use interest rates to protect against inflationary (and deflationary) spirals, which are known to be devastating. The effect on the unemployment rate is a known, and predictable, side effect. But formal unemployment is small compared to labour force dropout anyway, and the latter is not necessarily so sensitive to economic conditions anyway. Besides which, the unemployment rate can't really keep going down forever.

Zoom out; recent levels are actually quite impressive in the USA. Yes, they've climbed since 2023, but they're only just reaching the pre-GFC minimum (https://www.bls.gov/charts/employment-situation/civilian-une...).

Zoom out further: https://fred.stlouisfed.org/series/UNRATE/

Had it not been for COVID you'd be at more than 16 years without a(n NBER-determined) recession, long enough to suggest a fundamental shift vs. how things worked in the several decades before that.

[clcaev]

Yet the average household seems weaker now than 16 years ago. Perhaps policy guided by this metric could use rethinking.

[dragonwriter]

Your observation is about distributional characteristics of the economy which, in terms of policy, are addressed by fiscal policy and not monetary policy; the former remains in the hands of Congress and the President without delegation to the Federal Reserve, which has been given only a narrow set of tools adapted to and a mission related to broad aggregate performance.

[ls612]

The median household income is higher today in real terms than it was in 2008.

[rcxdude]

Unemployement is a necessary part of the economy, what is cruel is making unemployment unlivable.

[ericd]

Have you ever read about people burning piles of German currency because it was better than using it to buy firewood with? Not to say we would get there, but allowing inflation to run is not kinder.

[wqaatwt]

Inflation like that doesn’t just happen. It can only be the outcome of explicit government policy. Like in post WW1 Germany they wanted to wipe the value of all domestic government debt they accumulated during the war.

[ericd]

Eh my understanding was more that they had to cover fiscal deficits with printing, because they had heavy WW1 war reps (only payable in gold, so they couldn’t inflate it away).

There are times when it’s politically infeasible to defend the currency, even if they technically could. See the response in France to trying to raise the retirement age a bit, because their budget is in trouble.

[wqaatwt]

Supposedly Germany was spending around 80% of its tax revenue on interest payments alone. They pretty much had to finance the war through domestic bonds.

So yes, pretty they didn’t have any money to spend on anything else. Of course bonds became worthless well before the peak in inflation.

[ericd]

Eesh thanks for that detail, didn’t realize it was so crushingly high.

[inferiorhuman]

I think these days folks typically use Zimbabwe or Argentina as examples.

[brobdingnagians]

Those are more recent examples, but I think Germany is still a more visceral example for a lot of Western nations because Germany was a high tech, educated industrial nation that was hit with such massive problems from government policy. It's closer to home. Other countries are (wrongfully) easier to dismiss as being just too different from our wealthy and enlightened selves.

[ericd]

Also, Germany was a great power seriously challenging the greatest power of the time, the British Empire. They fell a lot further than those other examples.

[Gibbon1]

People get confused the hyper inflation in Germany was right after the end of WWI when Germany's economy was collapsing. Turns out you can't fix that with monetary policy.

A point. Economists like people to believe that hyper inflation lead to Hitler. When it was austerity policies at the start of the great depression 10 years later that lead to the Nazi's winning in 33. Same austerity policies in the US lead to FDR and the Democrats winning.

[inferiorhuman]

Unfortunately we're looking more like Hogan's Heroes than Germany. Both Zimbabwe and Argentina (and, quite frankly, Venezuela) were well developed before they went down the road of disastrous policies.

[badc0ffee]

Have you ever tried to start a fire with a bunch of paper? It doesn't work great, and what a mess.

[phil21]

Done it plenty of times.

Works great until you run out of paper.

[badc0ffee]

It burns too quickly, and leaves a ton of ash behind that flies everywhere.

Of course it works in a pinch.

[ericd]

Yes, and it was fine, but sure, I typically burn wood.