Reason # 56: Anti-social Self Interest
Why do we need to defeat Donald Trump and ensure that a Democrat occupies the White House?
I am not an economist and might get some of this wrong but let me try my best. The Republican Party and its billionaire right wing are enthusiastic capitalists, arguing that the invisible hands upon the steering wheel of our economy need no help from socialist or even Marxist Democrats to regulate the giant market represented by the U.S. economy. Supply and demand will always carry the day. But what if they don’t; what if the invisible hands on the wheel swerve wildly toward a cliff’s edge. Aha, suddenly capitalism can no longer be relied upon and we need the Federal Reserve to swat away the invisible hands and bring the economy back within the guardrails.
What is the Federal Reserve? This is a bit mysterious. They are not mentioned in the Constitution and are not elected by the American people. Even more amazing, POTUS cannot fire their chief. Or at least has not done so to date. This appointed group can intervene in the market by raising or reducing the interest rate which the federal government charges on loans to banks. Why do this?
In recent years, a badly botched viral pandemic stressed the market. It closed businesses, resulted in massive unemployment and steadily increased inflation, which in turn raised prices of essential goods for families already short on income. Decisions by the Federal Reserve to raise loan rates, essentially a form of state-socialism, have gradually brought our failing economy back under control.
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Although raising interest rates generally increases unemployment and lowers inflation, in this instance, inflation was controlled while still allowing a massive increase in new jobs. I personally believe that it is unconscionable for the Fed to act to help the wealthy and middle class by putting workmen on unemployment.
Over the past six months, there have been many indications that the Fed was finally going to cut the loan rate, after a four-year long series of increases. Such a signal is widely expected to provide funding to implement new development and kick start the economy. A win, win, win situation for everyone. Well, everyone but Donald Trump that is.
This week, the Donald has been haranguing his base to pressure the Fed not to take this step. Why do this, if everyone benefits? The problem from Donald’s perspective is that Joe Biden’s economy would benefit. This, on top of millions of new jobs and stubborn post-COVID inflation coming under control. The rich also did very, very well under Biden, with stock prices at historically high levels. Nevertheless, the word has gone out from Mara Lago to order Republican leaders to do everything they can to pressure Jerome Powell and his Fed cronies not to lower the Fed rate.
Even more strangely, Trump invertebrate toadies are showing a little resistance. Terrified with having to defend such a foolish and destructive policy, one that would adversely affect the U.S. economy and its three hundred million constituents, they are standing up to Donald Trump and for once refusing to bend the knee.
https://www.politico.com/news/2024/09/11/republicans-defy-trump-fed-rate-cut-00178758
There should be interesting news from this quarter next week.
Do we really want to elect a man who is so callous as to torpedo the economy and adversely impact the lives of three hundred million Americans, to boost his own sagging political prospects?
Post-Script: The Fed cut the lending rate by 0.5%.
Have a heart; use your mind, search your conscience, and vote for Democratic candidates – across the ballot – on November. 5th.
Please share this message with your friends and please, add your thoughts, to expand upon what are only brief sketches here.
Fred Grannis
September 13, 2024