The real culprit here is the diminution of US productive capacity and supply chain disruption caused by four decades of neoliberal policies – disinvestment, deregulation, outsourcing - which have prevented supply-side measures to bring prices down.
It would be irresponsible to create much higher unemployment – and the US economy could be pushed into recession. There is a strong argument for the Fed to take a break from its aggressive monetary-policy tightening.
We need to greatly expand the role of fiscal policy relative to monetary policy and address inflation while also promoting low unemployment, needed new investments, decent wages and a much fairer distribution of income and wealth.
Reports from the Economic Front
While inflation-hawks are quick to highlight the cost of higher prices, they rarely, if ever, mention the costs associated with the higher interest rate policy they recommend, costs that include higher unemployment and lower wages for working people.
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